The inside scoop on buying market research reports

Whether you're a marketer, product manager or investor, you can't help but see articles about newly-released market research reports in the trade press, on websites and in blogs. These reports could be a gold mine of information about your customers, vendors, competition or the market in general. However, there are lots of reports and publishers to choose from. Should you consider them at all, and if you do, how do you choose?

I earned my living for a few years writing these market research reports (sometimes called "syndicated" reports, because they're not sponsored by or paid for by a single company.) In that time, I learned a lot about how the business works, what to look for and what to avoid.

The first rule is that syndicated research will never replace talking to your current and potential customers directly. You can often learn more from your customers, for less money, by talking to them yourself. However, if you need research that would be too expensive or too impractical to gather yourself, or if you're starting a new business and you don't have a customer base to talk to, syndicated research may make sense.

You may be able to find the information you need for free. If you're looking for demographic and economic data and forecasts, national and state governments publish a wealth of information that's almost always available for free, online or at a local library. For U.S. statistics, USA.gov is a great place to start.

Just about every research company sends out press releases with valuable statistics and findings when they release a new report. A table of contents is also usually available from the company's website, which will give you a good idea of what the report actually covers.

If the report is newsworthy enough that the researcher who wrote it is interviewed or quoted in an article, they usually reveal additional facts not included in the press release. By starting with the press release (which you can get from the research company's website, PR Newswire, Business Wire, Google, Bing and many other sources,) and then searching for other mentions of the researcher/analyst or research company, you can start fitting together a picture of the report like pieces of a puzzle. Even if you can't get all the answers you need this way, this technique is a great way to narrow down the list of reports that might give you what you're looking for.

Let's assume that you've now got a list of two or three potential reports that might serve your needs. How do you choose? Here are a few guidelines:

• It's common to look at the size and price of the report, and go for the "best value": A 300-page report priced at $1,500 costs $5 per page, while a 60-page report priced at $600 costs $10 per page. What matters is the quality of the information and how applicable it is to your needs, not the page count or the cost per page. Many reports are padded out with duplicate information, boilerplate tables and data that you could find by yourself with a few hours of work.
  
  
• Most research publishers list biographies of their analysts and managers on their website. Some research firms hire freelancers to write reports, and their information may not be as readily available. Try to find out who actually wrote the report you're interested in. Search for them on Google, Bing, LinkedIn and other sites, and see how much experience they actually have in the area they're researching. It's not uncommon for reports to be written by researchers fresh out of college, or who came from a completely different market area. That doesn't necessarily disqualify either the researcher or the report, but it should definitely be a question mark.
  
  
• The age of a report is very important. Research reports generally have short shelf lives, especially in industries and markets that are changing rapidly. Even in markets where change historically has happened much more slowly, it only takes one major disruption to invalidate a shelf of reports. A  report written in 2007 forecasting the U.S.automobile market for the next five years would look like a description of an alternate universe today. I'd be skeptical of the accuracy and relevance of any market research report that's more than two years old.
  
  
• If the report that you're interested in is part of a series, see if the publisher will send you a back copy for evaluation before you buy. A report that's a few years old shouldn't be used for planning, but it will tell you a lot about the kinds of information that you can expect from the current edition. Ask the publisher if the researcher/analyst, methodology or organization of the current report has changed since the old version was released. High turnover of researchers and analysts can be a red flag.
  
  
• Ask the research company for a current list of clients. Most companies pad their lists with clients they had a few years ago, but have since left. Compare the current client list with the list on their website. If there are a lot of names that are on the website list but not on the current client list, that's another question mark--why did those clients stop buying reports or services?
  
  
• Are the research company's clients mainly product/service vendors or end users? Research publishers target their reports to their primary customer base. End users generally demand greater accuracy and impartiality, while vendors are interested in making their products look better, and both their sales and the overall market opportunity look larger, than they may actually be.
  
  
• If the report you're interested in includes forecasts, it's important to get previous years' forecasts from the publisher and compare them with what actually happened. If a research company primarily sells to vendors, their forecasts are likely to be higher than what actually happened. Optimistic research reports sell; pessimistic ones (generally) don't.
  
  
• The market research company should be willing to share its methodology with you. How many end users or vendors did they interview, how did they conduct the interviews and gather the data, and how did they compile the data? They may not be willing to share everything with you for proprietary reasons, but they should be able to answer the questions above.
  
  
• The size of the research firm is not a good indicator of the quality of the report. Bigger firms don't necessarily do better work. One major firm recently released a study that purported to tell end users which "white box" video content management services vendor would be right for their needs, but they cherry-picked six vendors for comparison, then were forced to issue clarifications and explanations as to why they limited their report to those six vendors. A few weeks later, the vendor who was picked as number one in the report did a webinar with the research company to sell its services. Whether or not there was a business relationship between the winning vendor and the research company before the report was released is immaterial; by partnering up to promote the findings of a clearly flawed study, both the research company and the vendor were tainted. (By the way, the report is still on sale for $1,750. Caveat emptor.)
  

In an economy where every dollar counts, don't waste your money on outdated or inaccurate syndicated research. Do your homework, and you might find what you need for free. When you need to purchase a report, spend your money wisely.