Why is market research so expensive and so slow?

Market research is nearly always sold as customised to your needs

Because it is assumed that every situation is a bit different and customising the study is therefore essential. But is this really necessary and is this that the best way? It certainly keeps it high cost. It also slows things down as the survey has to be designed and the results need custom analysis.


Image from www.techiemania.com

If you ask for a custom study then the market research provider will offer it.
Agencies do this because they believe it is what their clients want. And we all like to feel our unique circumstances are being attended to. So studies are presented as customised and custom flexibility is provided.


This is most obviously true of high end market research firms. This is not surprising it is in their interests to provide a good service and charge accordingly. But surprisingly it is also true of self-survey software like survey gizmo and survey monkey. They present their product as something that you can customise to your needs. The whole emphasis is on flexibility and customisation.

But is customisation the best way?

Yes it is easier to flex it to your market situation. bUt it also leads to market research forms and their clients endlessly reinventing the wheel and learning from mistakes that others made before them.

Maybe it would be better to stick with proven best practice

This has learned from the mistakes of others in the past. This means using fixed formats of research recruitment, survey design, data collection, analysis and reporting. So this is not just in how you manage the study and the analytical tools but also extends to exactly how the study is delivered, analysed and reported. Fixed survey formats also have the potential to reduce the human error factor (dodgy presentations!) and create more reliable insight and decision making.

Now in reality many research studies use proven methodology and repeat it many times. But a lot of customisation is allowed in how it is done and delivered. Is this wise?
How many formats should there be. Maybe not very many.

The only point of market research is help you make a decision

Thus you reduce the risk you make the wrong decision. The goal is not to gain an insight (often stated as a goal) but to make a decision that transforms your business performance. When you examine all the research that is done for business organisations. It all boils down to three decisions. Maybe there are only a few formats needed.

  1. Ask what should the business be doing e.g. change the product, message, service, packaging, media to meet customer needs (e.g. U&A, trend data, exploratory research).
  2. Ask how well the business is doing what it should be doing? Know how to do a better job to delight customers. (e.g. tracking studies, retail audit, customer satisfaction).
  3. Decide which product customers will buy more of or pay more for? (e.g. concept test, market test).

There are lots of different ways of tackling these questions.

Discovering which is the best , standardizing the method and making it even better offers the prospect of much better research at much lower cost and with much greater speed.

This would benefit existing market research users. But it would also enable smaller businesses to access tools that were previously kept back for large firms. Presently smaller firms are left to build their own surveys in self survey tools and make all the mistakes that a novice will stumble across.

Web technology makes this feasible. It enables standardisation, it reduces cost, it opens up new ways to collect data, it makes things quicker.

So far the market research industry has struggled in its use of the web. It has not sought to change the business model which remains based around high cost personal service. Market research has treated the web as a replacement for face to face quantitative fieldwork. Other industries have been more ambitious. Maybe market research can go much further than it has.

At Differentiate we are working on how to make a contribution to this kind of breakthrough change.  Any comments or thoughts would be really helpful.

How well connected are we with the real world?

When I listen to the great and good in the news, there does seem to be mounting evidence of a surreal detachment from the real world. We are facing a harsh reality that the nation and businesses have some big debts to pay back. However, people who cannot pay it back, might want to check out the write off bounce back loans
Royalty:  Prince Andrew hiring private planes at tax payers expense to go to Davos to the world economic forum  .

Civil servants:  Mark Thompson’s private flights courtesy of the Licence payer, because it was terribly important he dashed home from his holiday to sort out a staff problem.

Stephen Hester’s  £9.6m package for managing a business wholly underwritten by the tax payer and is guaranteed it cannot fail.

Politicians:  Duck houses moat cleaning, phantom mortgages etc. But now I have heard MP’s arguing that their bullet proof pensions are perfectly reasonable and the problem is not that their pensions are too generous but that the private sector is at fault and is too mean for withdrawing final salary pensions.

Ministers and opposition politicians talking as if they can continue to spend money and not realising that the electorate knows an adjustment is needed.  Gordon Brown’s slip up that we face zero percent growth in spending is an illustration of the psychological dilemma.
Business Leaders:  I heard three eminent business leaders on Evan Davis Radio 4 slot profess, without blinking or stuttering, that when they meet staff (sorry colleagues!) they have perfectly normal discussion with them. They argued that they always find out exactly what the staff thinks because staff (sorry colleagues) do not tailor the response to impress the boss. (You would never think of doing such a thing!)
How can we stay in touch with reality? .
You know this is important for you to make the right decisions for your business. If you do not, you will lose touch with customers and they will drift away and the business will flounder. This is about more than being customer driven, it is about being realistic regarding what you try to accomplish and about the kind of role and relationship you have with your customers.

The most successful leaders manage to keep in touch with this, they do it through good instincts (Margaret Thatcher), good research (Tony Blair), talking with people (David Cameron).

Less successful leaders miss the beat, (Gordon Brown) start paying too much attention to what their immediate direct reports are telling them (Neil Kinnock, John Major, Ian Duncan Smith) and do not reach out to the wider market or audience.

This is not just about market research and talking to customers it is about having wider antennae by using multiple sources.

We need to find the same thing for our businesses and to understand customers. What is available to us to ensure we stay realistic? Here are 3 thoughts to get started.

1. Seek to understand what customers have done and why Do not take too much notice of they say they will do. Future behaviour is hard to predict. Funnily enough customers cannot predict their own behaviour. But it is possible to ask them and understand their current needs and frustrations.

2. Find ways to track what people are saying about your business. Get away from the bubble in your head office. Find out what they say behind your back (being British we are too polite to tell you to your face). If you are high profile enough then social media networks provide feedback on this. It is time consuming and expensive to track but it is real and â€oewith the beat”. This seems a more practical use of social media than trying to insert ads into conversations between friends.

A good example of how customers do not want to say things to your face comes to me from conversations with John Yates Smith a Val d’Isere chalet operator (YSE). He is amazed at how often when something goes wrong in the chalet (lights, fridge hot water etc), that customers keep quiet about it all week, then go home, moan to their friends, then even write a letter of complaint. But they do not tell him whilst they are there when he could fix it.

Any more thoughts on how to stay in touch with customers and keep our antennae switched on would be very welcome.  Please post comments on this blog.

Online research offers exciting new possibilities

LogoinsightStacey and I went to the Insight Show at Earls court yesterday to have a look around and see what new methodologies and developments are on offer today.   We were focused on online research since we have been moving our own tools into the online area as it seems to save cost, allow us to reach new audiences and creates speedier delivery.

But we found consistent with our own recent experiences, the online tools are now moving from being cheaper and quicker to being better and more effective.

One of the presenters, powerfully made the point that the research business has itself to blame for the slow development of online work.  He showed an image of the Amazon website in 1996 and contrasted this with the tools and capabilities of the 2006 version.  Whereas a look at a survey in 1996 showed not much difference from one in 2006.  We are all still putting face to face techniques and paper questionnaires onto a screen.

But things seem to be changing.  We noticed three powerful trends (of which we have used one and are developing the second)

  1. Introduction of flash tools to create much more intuitive survey formats that allow respondents to interact with the packs, the brands the images and the films in a way to creates a better and more useful response than can be obtained in traditional ways.
  2. Significant developments in the scope and penetration of online panels allowing recruitment of previously difficult to reach markets such as wealthier consumers and business decision makers. 
  3. The creation of virtual panels to allow you to have continuous and direct feedback from customers.  This is less structured and might have the purist screaming "unreliable" and "not validated" but the directness can be very powerful.  See Virtual Surveys
  4. New possibilities to do qualitative in ways that are quicker easier to view and analyse.