Question

Topic: Research/Metrics

Negotiating A Discount On Market Research

Posted by Anonymous on 8/2/2010 at 1:24 PM ET 250 Points
I am currently considering the purchase of a market research report from a company that I haven't used before. The summary tables appear to cover the topic I am interested in, however, not having worked with this company before, I am concerned as to the quality of the analysis given the price of the research. The research appears to be about 20% more expensive per topic than competitive research.

My question is : Is there a rule of thumb in the market research industry for giving discounts to new customers, say 20%? How might I go about negotiating with the market research firm? How do market research firms determine their pricing relative to their competitors?
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  • Posted by norton on 8/2/2010 at 1:53 PM Member
    You ask:
    Is there a rule of thumb in the industry about discounting to new clients? I don't know of one. Individual firms may have such standing policies, but they'd be ill-advised to publicize the fact, as it would likely anger their current clients.

    How might I go about negotiating? Are you negotiating for price, given that you think the information is good, or are you trying to find out if the information is good? If the former, just make an offer; the worst that can happen is they say no. If the latter, ask for a sample of the report that demonstrates the quality of the analysis you are looking for. If you conclude the material is worth $X, and no more, then that's the most you should pay for it.

    How do market research firms price relative to competitors? I am not sure one individual can answer for the whole crowd. Most of the time, if firms find they aren't getting (enough) business because of price, they lower price a little until they do. Price is a way to ration demand, right?
  • Posted by koen.h.pauwels on 8/2/2010 at 2:37 PM Accepted
    Hi Tim,

    Your key question is why they are charging 20% more than competitors for similar information. Simply ask them that question: how do they justify it? This will show that you are a knowledgeable buyer, and will either leave them surprised (if they were trying to get away with it) or happy to motivate the higher quality of their research with specific arguments.

    Once you are informed, you can ask for specific discount, eg give me 20% discount now to get me as a customer, and I will give it back to you after I have experienced your superior quality myself. It seems rather irrelevant to me whether there is a general first-customer discount in the industry; you get what you negotiate. However, your key objective is not just to buy at the lowest price: what are you using the market research information for and to what extent will its better quality improve your decision making process?
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