When I worked for an agency, I was once asked to meet in the office of the owners and my bosses. They wanted to discuss pricing for an upcoming research project for a large financial firm. The client wanted to conduct a 7- to 8-minute long online survey (a standard an acceptable length for any audience) among 1,000 respondents. So, after getting a quote for the survey interviews for about $7 per completed interview, I go to the office and I had prepared pricing based on an excel model I have used for years. I break down the time needed for questionnaire development, online programming, statistical software programming, analysis, and reporting. I provide the estimate for each survey respondent, and I am ready to present the hours when I am met with: “Well, the sample company is charging us $7 per respondent (writes on the white board). We need to make at least double that so, $21 per complete and then I would say about… $12K on top. So $33K for this project.” My pricing had come out to around $7,000 for 76 hours of work. The disparity was obvious, and my estimate was never asked for or used.
That experience really had an impact on me. It pissed me off. I couldn’t believe that anyone would charge someone based on a subjective multiplying factor instead of the hours of work that it took to get the job done. I had worked for years cultivating my knowledge of statistics, research, and service and I take my job pretty seriously. I love the work, but I also love it when the client finds value in excess of the cost of the research. That is how it should be all the time. Unfortunately, with the majority of research firms, it just isn’t the case.
Some years later, I started Growth Survey Systems, and take my trusty pricing model to start quoting work for new clients and partners. Everyone says the same thing… “How is it that your pricing is so low?” Well, we charge for how many hours it takes (not what multiplying factor we feel like pulling out of nowhere to cover our overhead). It’s an ethical approach and also one which our clients are really responsive to.
We live in a world today where only the highest earning corporations and businesses make budgets for research, and that is because of an industry-wide stigma that medium and small businesses can’t afford to do research with these larger firms. This is mostly true, but it doesn’t have to be. Businesses of all sizes NEED research. They spend tens of thousands on logos, web design, public relations, advertising, web marketing, and lead generation. If one of those pieces in their plan is not making an impact on their intended audiences, that is money out the window.
So, ask. Ask for a breakdown of services offered. Ask for the hours it takes. Ask for the data files that you own, and demand insight from your research partner. Ask them how much they are being charged per respondent. Ask how much they charge based on tasks. Chances are, you will get a better deal for your research project. Alternatively, you can just give us a call. We do that every day.