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|I tell my students I'd rather spend $5000 and a few months and learn I have a bad idea than spend $150,000 and 18 months and find I have a bad idea.
I just participated in a marketing research activity for a company in Cincinnati, OH.
The researcher gave me some numbers without realizing she was. I am tricky that way.
There were 2 researchers/interviewers and a receptionist.
They were interviewing 150 people in EACH of 2 cities (Sunnyvale, CA and Columbus, OH).
They paid the interviewees $75 for an hour's participation.
Let's do the math?
2 interviewers could do 12 people (6 each) in one day = that's 2 full weeks (I am rounding down) of work for 3 people in EACH city.
40 hrs/week X $20/hr x 3 people x 2 locations = (I need my calculator) $4800 in salary costs.
My interviewer came from Cincinnati (she told me) for this research. She has to be housed and fed. The other guy, too. I reckon the little receptionist was a temp hire.
$150/day x 15 days x 2 people x 2 locations = $9,000.
They interviewed 150 people at $75/hr in 2 locations.
150 people x $75 x 2 locations = $22,500.
I suppose the paid Target for the use of the prime location where the product was displayed for those 2 weeks in both locations. No idea how much that would cost. Let's go low - $5K x 2 locations = $10K.
$4800 + 9000 + 22,500 + 10,000 = $46,300.
That's how much the company doing the research paid the people to do the research.
How much did the company NEEDING the research pay the company to set this all up. Let's go 3-4x the cost of actually doing the research.
$46,300 x 3-4 = $138,900 - $185,200 to get initial feedback (1st run) on a new product idea.
Suppose you could spend $10K to get the feedback you need while getting the emails of your prospective clients ... would you think that was worth it? I would.
How do you do market research?
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