By Lou Davis, Vice President, Market Street Research

Hospital marketers and planners know the value of good marketing research. If properly conducted, marketing research can provide a measurement of the efficacy of past consumer-directed marketing efforts, illuminate new market opportunities, and identify how best to take advantage of these opportunities for growth. Good research can pave the way to improving physician relations and increasing referrals, it can provide an assessment of specific healthcare needs within a community, direct the development and introduction of new service lines, and can help organizations realize—and most effectively combat—the effects of negative press coverage, among many other things.

However, conducting high-quality research that results in reliable, actionable results can be expensive. The main drivers of research costs vary from project to project, depending on the methodology or methodologies utilized, the targeting and number of participants or respondents to be included in the study, the length and depth of the instruments being used, and the type of analysis and reporting desired as an outcome of the research. Above and beyond these drivers, the quality-control measures used by the firm conducting the research greatly affect the cost—and the value—of the research, and are most often not thoroughly understood by those not in the research profession.

With research, as with any kind of data collecting and processing, garbage in is garbage out. Therefore, it is essential that every effort is taken to ensure that the information garnered through any market research endeavor is collected in such a way as to be as reliable as possible. Marketing research best practices such as controlling response rates in survey efforts, using highly trained and qualified professional interviewers to conduct telephone-based surveys, and using professionally trained moderators for focus groups, can add significantly to the cost of any research project. The discrepancies in pricing from one research firm’s proposal to another’s for the same study (when truly comparing apples to apples) typically are a result of differences in the quality control measures being employed by the bidding firms.

Marketing research can help prevent mistakes based on assumptions or anecdotal evidence. Many times, research is conducted to build consensus around an organizational decision, with the findings of the research serving to provide all stakeholders with the objective information they need to decide on a course of action. This type of research can be invaluable in providing all interested parties with a common understanding of the nature of the situation, and the clearest path for action to achieve the organization’s goals.

The most important thing one can do when deciding to begin research is to ask two questions: (1) what do we want to find out? and (2) how do we get that information? Answering the first question may be the most difficult step in conducting research for an organization, but once the research goals are determined, a good marketing research firm can help you answer the second question. When budgeting for a research project, it is important that the development of the research is first directed from the perspective of the information needed, and not from a budgetary standpoint.

Research projects are, however, not conducted in an operational vacuum, and cost will always be a significant factor that affects what can ultimately be done. If budget constraints preclude conducting the optimal research design, there are compromises that can be made to effectively balance quality and cost.

This balancing act—crafting a research approach to provide the insight you need while utilizing the resources you have—can be a tricky proposition. Often the instinct is to choose a methodological approach based on the budget available, rather than on what type of research study will garner the most useful and reliable information.

For example, the goal of a research project may be to assess the image and awareness of an organization and its brand among consumers in order to identify opportunities for market share growth. For this type of study, the optimal approach might be to conduct a 15-minute representative telephone survey of 500 area consumers, utilizing multivariate statistical analysis in the synthesis of the data, and having the detailed findings presented in a 75-page report; however, perhaps this approach is too expensive to consider.

In that case, one might be tempted to turn to focus groups with consumers, as this research method is often less expensive and has grown in popularity among organizations. That would be a mistake, however, as a focus group methodology is not the most appropriate way to gather this type of information. A better decision would be to compromise by (a) focusing the questions you need answered, resulting in a shorter questionnaire and survey length; (b) focusing the types of respondents you most need to learn about, which can cut the size of the research population; and (c) decide the level of detail your organization needs vs. the cost associated with each.

This could result in a research design that utilizes a 10-minute survey of 250 respondents, and is presented in a top-line or summary report that trades a degree of granularity and breadth of insight for a dramatic reduction in the cost of the work while still providing specific, targeted insight to effectively and reliably direct decision-making.

Again, all research projects should be driven from the perspective of what you need to know, and it is from this position that budgets should be shaped. The expense associated with any research project can and should be justified by considering the cost of making the wrong decisions.