eMarketer posted an article today on "Why Now is Not a Good Time to Slash Your Market Research Budget."  In it, they indicate that anticipated spending on market research is likely to stay the same or decrease at many organizations, halting the trend of increased spending over the past 20 years.  The article also outlines a few reasons why a budget cut isn't the right path to take...

How will this impact researchers and the way budgets are spent?  Those facing tighters budget may consider turning to online qualitative research methodologies (and specifically online research communities) as a way of spending money more efficiently within the constraints of their new budgets. 

For example, consider a company that sets up a community to evaluate and follow the decision making process their target audience goes through over the course of a typical research and purchase cycle.  That kind of community could help uncover insights into where people are spending their time and money, what they pay attention to, purchase influencers, how they actually make their purchase, concerns they have during the process, etc...  This information could then help a company adapt their marketing strategy accordingly, saving significant money on ineffective methods that prospective customers are less likely to notice.

Of course, research communities and other forms of online qualitative research also help save money through:

• Decreased travel costs
• Lower rental charges and associated fees
• Lower recruiting costs (over time)
• Lower incentive and incentive management costs
  
• Increased geographic reach (leading to a reduced need for multi-city studies)
  

First, the good news…

With budgets shrinking in the face of an economic downturn, client-side research and consumer insight teams are going to be looking for a way to stretch their budgets and get as much research capacity as they can from their budgets. This plays perfectly into an online research community, where a single upfront investment allows for virtually limitless options to explore a wide variety of business and research objectives. Rather than continually paying out-of-pocket expenses for ongoing recruiting, facilities, honorariums, etc., a research community allows for continuous access to members for a wide variety of research initiatives. In that sense, forward-thinking organizations will consider the impact of a research community on their budgets and spend accordingly.

Now for the not-so-good news…

The upfront investment for a custom research community typically runs higher than other methodologies. It can also be a difficult and lengthy “sell” internally, particularly if your organization has no prior experience with an online research community (or related social media initiatives). In an economic downturn, the tendency might be to stick with your more “traditional” research methods, like focus groups and in-depth interviews, rather than exploring unique and innovative ways of continually connecting with your target audiences.

What to do…what to do…?

Here are a few strategies for “selling” online research communities at your company in the face of an economic downturn:

• Pass the hat - We’ve seen some of our clients “pass the hat” a bit to get the budget together for a research community initiative, knowing that many teams from across the organization will benefit from having a research community available 24/7.
• Crunch the numbers to calculate the savings - Also consider taking a look at how much you have spent on qualitative market research in the past year, and guesstimate how much of that could have been asked in a research community setting. I’m willing to bet a fair amount of that research could have been handled in a community, saving you considerable amounts of money over the long-term. If you’re not sure what could have been handled in a research community setting, then give us a call and we’ll help you determine what could have been covered.
• Consider using an established community - If you’re worried about getting a new online research community initiative approved at your organization, you might want to explore a shared community option (like PluggedIN Nation ). That will help you get some of the value of continually connecting with a targeted group of individuals, while minimizing your upfront investment in building a custom community of your own. As the economy starts to improve and budgets are opened up again, you can always transition your members from the shared PluggedIN Nation to a custom community.

The gist…

We think that the economic downturn will most certainly have an impact on companies setting up new research communities (or perhaps even extending their existing research communities), largely due to the upfront investment involved in a custom community initiative. However, with the right approach and a little bit of creativity, it’s possible to work a research community into your researcher toolkit.

What do you think? Will the economic environment change the way you think about using online research communities?