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Selecting a Market Research Supplier

 
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PostPosted: Thu Jul 07, 2005 12:37 pm    Post subject: Selecting a Market Research Supplier Reply with quote

Selecting a Market Research Supplier

By Holly Edmunds


Why Engage an Outside Marketing Research Supplier?
Outsourcing has proved a valuable resource in many industries for delivering on short-term, specialized projects without stretching internal staff to the breaking point. Marketing research is certainly no exception.

Even companies with internal research staff frequently need to use outside experts to get answers. Reasons vary, but generally revolve around:

Scope of the project (large sample or multi-region research)
Overload of internal staff
Avoiding bias
Requiring expertise beyond what you or your staff can do internally (extensive modeling or specialized methodologies)
While the outsourcing option makes plenty of theoretical sense, the true key to a successful project completion is still a question of staffing. Hiring the wrong outsourced research firm can be as disastrous as hiring the wrong employee – and often more expensive.

With some planning and advance work, however, hiring an outside vendor for certain projects both makes for better research and better business.

Set Expectations First
Even before you send the details of your study out to potential vendors, set some initial guidelines. The suppliers should be:
Familiar: Either from previous professional contacts or through referrals


Have they done prior work for your company?
Do they meet deadlines?
Do they provide quality deliverables?

Able to provide one main point of contact


It can be annoying as well as detrimental to the project if you are passed to three different people every time you call.

Willing to stick to the budget

Willing to disagree


You do not want 'yes-men' who tell you only what you want to hear. The answers you want the research to generate may not be what the results show, and it's better to find that out before the big product launch.
Unless your project is one that is ongoing, such as customer satisfaction or advertising tracking, have several vendors submit bids. This will not only enable you to consider pricing options, but it often can provide you with insights about different methodologies you could use.

The cheapest proposal is not always the best option. Likewise, an expensive one does not always mean that the supplier is a research guru.

You should also bear in mind that some suppliers have strengths in certain areas and not in others. Try to get a picture of their specialty so you can select the vendors that best fit your project.



Writing an Effective Request for Proposal

Written proposals are a must for a successful project.

A written request allows fewer opportunities for misunderstandings about study objectives, your expectations of the vendor, and the specifications related to your target. Revisions to a Request for Proposal should also be confirmed in writing for both parties.

A request for a research proposal should include the following:

A brief background of the study


Who are you (the company)? Why are you planning to conduct this research? It is helpful for the supplier if you provide some insights regarding your overall business or strategic objectives to give a view of where the company is going. Probable uses for study results (product design, increasing customer loyalty, developing marketing strategy)?

Your primary objectives for the study


What are the main things you want to learn from the study? Be very specific about your most critical information requirements. What secondary (if any) items would you also like to find out about?

Your specifications for the research


Who is the target audience (gender, age, job title/responsibility, product usage, etc.)? Where do you want the study conducted (local, regional, national, global, etc.)? What would you like to ask them (sample questions)?

Your timing for the research


When do you expect to start the study? Do any constraints exist that require specific timing (i.e. around advertising campaigns, staff not being available, etc.)? When will the results be required and in what format (i.e. top-line, draft, formal report or presentation)?

Specific contact and RFP response information


Who do the suppliers call if they have questions related to your RFP? Should they call with questions or send them via e-mail? Be sure that you can handle queries quickly otherwise you can’t expect vendors to submit proposals on schedule. Who can they contact if the key contact is not available? What is the deadline for proposals? When do you expect to make your decision once proposals have been submitted?

Required deliverables What type of reporting do you expect from the vendor (database, CD-ROM, executive summary, detailed report, formal presentation)? If you expect electronic copies, what format should they be in? Do you prefer to distribute reports via e-mail or do you expect the vendor to provide hard copies? Does your company expect that you or another employee will participate in the research analysis?
Ethical Considerations in the Proposal Process
Ethics are important in any business deal and research is not an exception.

From your perspective, at a minimum the vendor must be honest, competent and reliable. It is a given that you will argue an invoice if the vendor does not bill according to your contract. Even more likely is the chance that you will take legal action if the vendor “leaks” any of your trade secrets.

However, in an outsourced vendor relationship you have responsibilities as well. Consider the following items when dealing with a market research supplier:

Be forthcoming.


Approach your vendor relationship with professionalism and trust. By all means, ask your vendor to fill out a confidentiality disclosure form. The form should be sent to the vendors prior to having them write a proposal for you. This will protect both you and the vendors involved in the bid process. But once that form is signed, trust them! You may be asked to provide the supplier with specific details and confidential reports and information in order to assist in project design. If you hold back on this information, it could have a negative effect on your project.

Be genuine.


Do not ask a research supplier to draft a proposal that you do not seriously plan to consider. It is not fair to the vendor to be asked to pad your bid list just so you can tell your manager that you got the required three bids on your proposed project.

Negotiate pricing professionally and honestly.


Do not offer to give a vendor your next project in return for a deal on this one. There is no guarantee that there will be a next project, nor can you be sure that this is the right vendor for the next job. If you have a problem with their pricing, tell them so. If they are not willing to lower it, either find the necessary funding or look at other options.

Meet your deadlines.


Be prepared to stick to your end of the deal. If you agree to review and approve survey materials within a four-day period, do so. If you absolutely cannot meet the timeline, you must recognize that your delay is not the fault of the vendor. Be willing to extend project dates accordingly. If you told the supplier that you would provide lists of names for a survey, it is expected that you will provide it. If the list is not available after all, you will need to reimburse the supplier for any sampling efforts not originally agreed to.
Don't Over-Manage the Proposal Process
The point in hiring an outside vendor for a research project is to tap into that firm's expertise. Therefore, it makes little sense to demand that potential vendors conduct a study the same way you would if it were an internal project.

For example, many clients try to specify the type of research (focus groups, phone interviews, online survey, etc.) that they expect to be used in their study. Instead, let the suppliers suggest the methodology best suited to your needs. You may find a methodology that you had not considered.

If vendors send questions about your request for proposal, be sure that you understand their questions. When you provide them with information, if you believe it is information that could substantially affect the focus of your original RFP, send this information to all suppliers bidding on the project.

Also, I do not recommend telling the vendors what other firms you are including in the bid process. Vendors should be providing their best quality recommendation at their best price rather than trying to directly compete with a vendor whose style or pricing they might be familiar with.

Unless there are absolute budget limitations (i.e. you have $75,000 and not a penny more), do not put budget constraints in your RFP. This can limit the opportunities for suppliers to provide you with the best methodology to meet your stated needs.

Most vendors, once you have viewed their recommendations, will be willing to discuss budget issues if you feel their bids are out of range for you. Likewise, you should be willing to tailor your questions, sample sizes, and topics according to your available budget. A tight budget won’t work with a 40-minute global survey. Be realistic in your expectations.

Finally, ask for references, senior staff biographies, and examples of similar projects. These will help confirm your vendor selection decision. While no one is likely to provide you with a poor reference, many times contacts will be open about problems they experience regarding schedules or recruiting.





Presenting the Proposals

In some instances, you should consider having the vendors present their proposals to you and your team.

This, of course, is not as necessary for quick projects or very basic surveys. When moderators are involved, or the study is large-scale, you will breathe easier knowing that your vendor really does know what he is talking about and that you believe that you will be able to work well together.

The following situations usually require face-to-face presentations before selecting a vendor:

You are undecided between one or more vendors. All of the proposals seem appropriate, but they are offering different means of meeting your needs.

When the project is extremely detailed and requires a great deal of expertise both in terms of research methods and in terms of your industry. Such studies would include market segmentation, market share, and studies that provide strategic modeling capabilities.

The project includes several geographic regions or is global in scope.

One or more of the firms bidding on a high profile, large budget project has not worked with you before.
In many cases, companies ask research vendors to come in and present their capabilities even when there is not a project pending. This puts a human face on the vendors you will be talking to when proposals are needed and helps you later when you are faced with selecting vendors to bid on your projects.

Such pre-qualification interviews help narrow the field when it comes time to bid on actual projects. Just be sure to respect the vendor's time. A get-acquainted session is not the same as pitching for a contract.

Evaluating vendor proposals
Evaluating proposals is a two-step process. First is an objective appraisal of whether the vendor can meet the project's requirements. The second is more subjective – can you work with them?

For the objective appraisal, use a simple process to narrow the field such as awarding points for various aspects of the proposal. Just be sure to keep it simple. I generally used a three-point scale: one is poor, two is acceptable and three is excellent.

While the rating scale is simple, the list of items to rate is detailed:

Timeliness of vendor’s response to your request for proposal

Was it a day late or did they respond so quickly it appeared no thought was given to your RFP?

Experience of project team assigned to your project

Have they been with this company long? Are they familiar with your industry and/or have they worked on similar projects? What type of formal research training do they have?

Appropriateness of methodology/sampling plan recommended
Does their recommendation make sense given your information needs?

Past experience of vendor with similar projects
Has this company worked on this type of project? A field service firm may have enough interviewers for a project, but may not be experienced in more advanced methodologies.

Past industry experience of vendor

Does this vendor work with other companies in your industry?

Cost estimates
Is the estimated price tag in line with your budget? Does it seem realistic given the proposed methodology, etc.?

Proposed timeline for the project
Is the timeline realistic? Will it provide you with results within the time frame you specified in the request for proposal?

Vendor’s proposed plan for vendor/client communications over the course of the project
Does the vendor define the frequency of vendor/client contacts? How do they plan to keep you updated on the status of your project? Does this meet your expectations?


How well was the methodology/sampling plan is explained?
Do you understand what the vendor is proposing to do? Will this plan provide the answers you need?
Once you've narrowed the field to those firms that can meet the technical requirements for the project, start sorting through the subjective issues.

Past positive experiences with a specific vendor may outweigh many of the items you rate, but be careful not to let a previous friendship or business relationship hold too much sway in the decision.

Did you have problems working with one of the vendors through the proposal process? For example, if you had a hard time explaining the project criteria to a vendor, you will likely have the same problems during the study itself.

If the communications problems were a simple personality conflict, see if someone else on your staff had a better experience. If not, the potential frustration is probably not worth it. Go with a different vendor.





Before formally making a decision, recheck to make sure you've done all the internal paperwork to get the project started.

Do you have a formal purchasing process in your firm? Check on required forms and procedures to avoid delays in starting your project. If there is a delay on your end, be sure to move the deadlines accordingly to be fair to the vendor.

Also, if you do not have a formal contract, at the very least make a written note to the vendor suggesting that you expect the final version of their proposal to act as the contract for this project. Record any changes to this proposal version in writing and be sure both parties have a copy.

Selecting a research supplier may seem like a daunting task, especially to the uninitiated. On the contrary, it is simply a matter of applying common sense. Think of it as interviewing a prospective employee; what are your expectations and how well does the supplier seem capable of meeting them? That is your final decision factor.
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