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The Real Cost of Market Research

When it comes to evaluating various approaches to market research, many researchers focus on two factors:

• How many people will we speak with?
• What’s our total cost?

In our experience, however, this starting point misses the critical question:

How much time will each participant be speaking?

In other words, if the purpose of fielding a research study — of any type — is to learn what a given population thinks about a given topic, doesn’t it make sense to maximize the amount of time each participant spends talking?

Which is why we pay close attention to a simple, but telling, metric called, Cost Per Participant Minute (CPPM). Here’s how the math works…

Focus Groups

In a standard, eight-person, 90-minute focus group, there are nine people (eight participants plus the moderator) sharing the floor. On average, therefore, each participant is allotted 10 minutes of talk time across those 90 minutes (90 minutes divided by nine people).

The cost of a focus group of this type is at least $6,000, including recruiting, the moderator, participant stipends, food, facility rental, report write-up and the cost of getting you, the client, to the event. Divide 80 minutes of participant talk time (the moderator doesn’t count) into the $6,000 expense, and your CPPM in this case is $75 ($6000 ÷ 80).

Quantitative (Closed-Ended) Interviews

Closed-ended Interviews are known for being “fast and cheap”, and at first glance, that appears to be true. Dig deeper, however, and you’ll see that it isn’t.

A 30-minute quantitative interview will likely cost at least $80 (not including any participant stipend). When you consider, however, that the participant will speak for less than 5 of those 30 minutes (in quantitative interviews, the interviewer does the vast majority of the talking), your CPPM is now $17 ($80 ÷ 4.7).

Qualitative (In-Depth) Interviews (IDIs)

CSR’s typical in-depth interview runs 30 minutes and costs about $325, including recruiting, interviewing, participant stipend, and reporting.

The big difference here, however, is in the amount of time the participant spends talking; typically, about 25 of those 30 minutes. Dividing those 25 minutes into the $325 per session cost, and the CPPM for an in-depth interview is just $13.

The Key Concept to Keep in Mind

When comparing market research approaches, given that the purpose of an interview is to gather information from someone whose opinion is important to you, it’s not the amount of time spent sitting with each participant that matters; it’s the amount of time the participant actually spends responding, and the costs associated with those precious minutes.

To learn more about CSR’s cost-effective approach to market research, see
CSR: A Valuable Alternative to Focus Groups.