How do you define budget and KPIs for a market research project?

First, I think you need to start at a broader level and look at the overall company and product priorities. If you have a yearly roadmap, marketing themes, then it should inform the types of research you are doing. After that, I think you can break down your research a bit more granularly...

• Does this research tie to a theme, or major product launch/priority for the business this year?

            If not, then pause and consider whether you should be investing in the research. To be clear, there are very
valid cases to do this research, but generally speaking they should not command as much budget or time as
others. 

• What is the goal or intended outcome for your research?

            If you're conducting research for a major upcoming launch, then maybe you're looking to understand themes
for positioning and the launch campaign. Whatever the case -- define this upfront to help set expectations.

With that said, I would dedicated a a good chunk of the budget to research for major launches or campaigns. Let's say you have a $50,000 research budget for the year, with 2 major launches. This is an overly simplified example, but I'd break it down something like this...

• $15,000 - Dedicated to each launch for positioning, campaign support, and data. 
• $10,000 - Overall persona/theme research. If you don't have personas I would increase this number, but especially with the state of the economy now (as of December 2022) and changes to how enterprises are buying software, most PMM teams should be thinking about changes to their buying journey and doing some research along those lines. If you already have all of this figured out, then this money could go to other research, or data for content.
• $7,500 - Vision research. This is important, especially as you plan for next year or changes happen in the market that you want to stay on top of this part of your budget can be leveraged for that. It's ideal if you have a great relationship with executives and your product leader so this research can tie into that.
• $2,500 - Ad hoc research. This is for priorities as they come-up, or research needs throughout the year. This can also be used if one of the above categories slightly overspends can take from this part of the budget a bit.

Again, this is just a simplistic example and every business will be different but it's key to get cross-functional alignment and deeply understand the business priorities and themes before you start defining what your overall research budget is, and the breakdown of individual research projects.

I love mixing a short term win with long term gain. For example, maybe I’m writing a blog or prepping a presentation—I’ll ask for budget to do a quick industry or customer survey to create some good punch points. That’s a short term win. But I’ll add questions into the survey that I know I won’t have time to fully absorb for months when I can do a much broader analysis. Then I’ll update the ICP, help the SDRs with new sequences, reconsider my content roadmap.. etc.

For the analyst firms—I think you need to show you have a proven tactic for success, but let your managers know that it’s an unavoidably long play for most.

For example you can brief Gartner for free, but to really get mindshare—to get them to rethink a solution—you’ll need to initiate lots of inquiries and content reviews—something only customers have access to.

Market research shouldn't be about throwing money at surveys or analysts (which can be easy to do!). It's about acquiring strategic insights that inform key decisions.

Learn from my mistakes! I've broken them down into some DO's and DONT's:

DO's

• DO align with a broader (exec level) company goal. This helps you get more budget approved faster, but also helps prove the value of your market research project -- which can be hard in Product Marketing!

• DO define clear objectives and outline the scope: Before diving in, clearly define what you want to learn and how the research will benefit your business.

  • What questions are you trying to answer? Who are your target respondents? The scope directly impacts your budget by determining the research methods (surveys, interviews, focus groups) and sample size needed.

    • What are your specific questions? Are you trying to understand customer needs, validate product ideas, or gauge market trends? And what are you going to do with that information? Help inform the product roadmap? Help create marketing themes for the year? Help build pillars for all of your products? Help create a new GTM plan? etc.

• DO estimate the cost of each element within your scope. This includes:

  • Sample Size: More participants generally translate to higher costs for recruitment and analysis.

    • IMO, your sample size should be at least 30.

  • Research Methods: Online surveys are typically more cost-effective than in-person sessions.

  • Data Analysis: Factor in the cost of data analysis tools or outsourcing to specialists.

  • Reporting and Presentation: Consider the resources needed to create compelling reports and presentations.

    • If you are going to use this for an external webinar and/or research paper/whitepaper/eBook, factor in who will write it and how much that will cost

• DO target the right audience: Identify the most relevant group of people to answer your research questions. This could be potential customers, existing customers, industry experts, or even competitors. Getting this wrong can waste a ton of money!

• DO choose the right research method: Select a research method that best suits your objectives and target audience such as surveys, interviews, focus groups, customer observation, and competitor analysis.

  • A lot of this you can actually do for free!

• DO be clear with the questions you ask. Know WHY you are asking, and what you plan to do with the responses. If you don't it will likely lead to inaccurate data and poor results - because you don't know what you're looking for, the results are often not useful. Not keying in on the right questions initially to test the hypothesis leads to results that are then bland and general. So make sure you take the question side seriously! If you're looking to gather data or ROI, key in and narrow your question around a metric vs a general "How much time have you saved" sort of question that I see far too often.

• DO ask questions about competitors and pricing.

  • Some questions you can ask related to competitors:

    • Who do you consider the main competitors to [our product]?

    • What are the key differences between [our product] and those of our competitors?

    • What features do you find most valuable in our competitors' products?

    • What do you think are the strengths and weaknesses of our competitors' products?

    • What factors influence your decision to choose a competitor's product over ours?

  • Questions you can ask related to pricing:

    • What pricing models do you prefer (e.g., subscription, one-time purchase, tiered pricing) when considering our competitors' products?

    • What do you think about the price points of our competitors' products?

    • How do you perceive the value for money of our competitors' products?

    • Would you be willing to pay more for certain features or benefits offered by our competitors? If so, which ones?

    • What price range do you consider acceptable for products like ours and those of our competitors?

• ALWAYS validate your findings. Gotta love a good GUT CHECK! Is that what your internal teams are hearing? You can also check Gong for "pain points" or "challenges" to see what comes up during prospect calls.

DONT's

• DONT conduct research without a plan: Don't just jump into surveys or interviews without a well-defined research plan. A clear plan ensures you collect the right data to answer your questions.

  • Also have a plan for how you are going to consolidate and analyze the findings.

• DONT ignore negative feedback: Don't shy away from negative feedback. It can be just as valuable as positive feedback in identifying areas for improvement.

• DONT generalize from a small sample size: Ensure your sample size is large enough to provide statistically significant results.

• DONT let data sit on a shelf: Don't let your research gather dust. Share the findings with key stakeholders and use them to inform product development, marketing strategies, and business decisions.

  • Pro tip: Share findings throughout the research process. I recommend a Slack channel for #CustomerFeedback for example.

• DONT give into confirmation bias. Market research should always be exploratory. And while I recommend always going into a market research project with a hypothesis, you should stay opened minded for what the results might show--not only look at feedback/data that confirms your original hypothesis.

  • DONT assume you know what your target audience is thinking or feeling.

    • You know what they say when you "assume..."

• DONT overspend on market research. It is easy to throw $50k at market research. Ask your colleagues what is ACTUALLY worth the investment.

And because I personally don't have a budget for market research right now, here are some free options to consider:

• CAB: In my opinion, this is the best way to get feedback directly from your most valued customers that does not require paid incentives.

• LinkedIn: Post surveys on your company's LinkedIn page and/or send surveys to target individuals.

• Email Surveys: Reach out to your existing customer base via email.

• Phone Interviews: Conduct interviews with current clients for in-depth insights. You can also search for keywords on Gong if you have issues getting access to your customers.

• In-Person Surveys: Offer instant incentives (my favorite is a $5 Starbucks gift card) at conferences to gather survey responses.

• User Testing: Conduct user testing on your website to gather feedback.

• Google Trends: Utilize search trend data to identify rising key terms.

• Review Sites: Check G2 and Capterra for feedback (pros and cons). Take screenshots and use for sales slides if helpful!

• User Forums and Communities: Reddit, Stack Overflow, and various industry-specific and persona-specific communities like Databeats are super helpful. While these forums can sometimes represent vocal minorities, they often contain valuable nuggets of wisdom. You can also make connections with people who have used your competitors' products and can speak to that!

KPIs to consider (again, this depends on your objective):

• CSAT, NPS, CAC, CLV, Conversion Rate (my favorite), Customer Retention Rate, Product Adoption (usage based i.e. number and frequency of logins)