This is a series which I have started to help budding entrepreneurs interested in building their own panel company. Like all businesses – Panel Business needs a thorough preparation before jumping into the fray. The current article illustrates the basic evaluation parameters to create an effective BUSINESS PLAN. It is not easy to open a successful panel business but in the same vein I would suggest that if done properly you can create something to be proud of!!!
PARAMETER 1: TYPE OF PANEL YOU WOULD LIKE TO BUILD.
It is easier to recruit a gen pop panel as they are the most active people on the internet and willing to participate in online surveys. The drawback being established companies has a huge numbers of such panels – which they are willing to provide at a very cheap price (as they have already made substantial profits from such a panel).
So my suggestion would be instead of just a generic panel create a sub-group within gen pop base – for e.g. you can create a TEENS PANEL or a MOM PANEL (would be good strategy for attracting potential clients).
You can also build a specialist panel like Doctor’s panel – the only hitch being that it is very costly to recruit and maintain such a panel base. Nevertheless as such a panel would fetch great dividends for your company I would suggest to create one if you have the expertise and budget for the same.
Once you have shortlisted what kind of panel you are going to create and sell – start preparing as to what type of vendors you would be using for such recruitment.
PARAMETER 2: PANEL AGGREGATION V/S. PROPREITARY PANEL.
It is highly debatable as to the merit or demerit of aggregation or proprietary panel. I would like to take this topic more objectively here.
Aggregation is a great way to start a panel company because it doesn’t cost you a dime!! You pay for panels whenever you have a project.
So in a way it is great if you don’t have a substantial budget. But the problem with this methodology is that you are too much dependent on your vendors. Internet has shortened the gap between clients & vendors – so everybody knows everybody else, therefore you end up being too costly in pricing and will obviously loose projects.
5 years ago I would have definitely suggested you to go for panel aggregation but today it’s a NO NO!
Owning a proprietary panel is the best way to do a panel business but the problem is that you need a huge budget for the same. Also even if you have the cash to build a panel if you don’t have enough projects to give to your respondents they would become DORMANT soon!!
My humble suggestion would be to have MIX of the both i.e. build a small panel to which you can provide a good number of surveys but also search for newer vendors and supplement your panel strength as and when required.
PARAMETER 3: BUDGETARY CONSTRAIN YOU MIGHT FACE.
I have build panels for few companies and therefore I do get asked a lot of time as to what budget we are looking at if we want to build our own panel.
Well…if you run a banner ad on a property like Yahoo it will cost you around USD 1.5. So if to start with you want to build a panel of 10,000 respondents you are looking at a budget of USD 15,000. Now there is another problem here most of the ad networks won’t provide leads on a double opt-in basis – a good panel recruiter will be able to give only 75%-80% double opted-in respondents.
So the chances that remaining 25% who are only single opt-in are not going to be active respondents – is VERY HIGH.
Another problem which is normally overlooked is the DORMANCY RATE which I guess rarely panel companies take into account.
If you are not being able to provide regular supply of surveys to your respondent base than there are very high chances that after sometime they would stop responding to survey requests.
So a word of CAUTION – even if you have a budget do consider what is your current sales funnel i.e. how many surveys you are expecting in coming few months after having build a panel. It is very easy to lose money here as respondents are a perishable commodity!!!
PARAMETER 4: CREATING THE USP OF YOUR COMPANY.
Every day when I check my LinkedIn account I see someone has opened a panel company. I mean it is easy to do so as the entry-level barrier is very low for this industry.
But as I have mentioned above in point 2 today clients know which vendor has got proprietary panel therefore your company won’t be able to match pricing especially if you are aggregating panels.
But the situation is not that bleak as it looks – most of the companies have not fully utilized the immense leverage social media provides.
My humble suggestion would be to first create a USP for your company and then utilize the social media platform to distinguish yourself from others.
PARAMETER 5: FORMULATING AN EFFECTIVE MARKETING PLAN.
As mentioned in above point 4 – panel companies are not fully utilizing the power of social media. If you are SMART ENOUGH use the social media as one of the central base for your marketing activities.
Understand your brand fully before embarking upon creating a marketing plan for your company.
All your branding exercise should be non-intrusive in nature as the target client audience i.e. market researchers are a busy lot.
My humble suggestion would be to contribute interesting & relevant articles on Online MR – it has 2 major benefits – one you would be looked upon as a subject matter expert in the panel industry and secondly it doesn’t costs a dime!!! For more you can CLICK HERE.
Always remember – OUT OF SIGHT OUT OF MIND!!!
Now you have a choice. You can comment, share, or implement. I prefer if you implement, but I’ll appreciate all three - Akshay Kanyal