I’m hoping that some day soon we’ll be able to stop doing these “impact of the recession on research” stories. But after reading a recent Forrester Research report, I knew we had to revisit the subject.
Rather than further depress me, “Predictions 2010: What Will Happen In Market Research” actually provided some hope. I came away feeling that the silver lining around this dark recession cloud could be that the in-house research function emerges from 2010 with a new identity, one forced by economic circumstances to become more relevant and more efficient.
Based on the Forrester opinions, in an ideal world, research departments will look internally and discover hidden talents and abilities, glean fresh insights from old studies, harness and exploit Web-based data streams, and make their input a valued part of marketers’ decision-making.
Sounds simple, right?
I know we don’t live in an ideal world. And it’s all easy for me to say, since I’m not faced with soul-crushing realities like risk-averse coworkers, research-phobic upper management, parsimonious procurement departments or any of the other bugaboos that plague the in-house marketing researcher.
But the Forrester report makes me feel that rather than stagnating and fossilizing into irrelevance, researchers seemingly have the chance, thanks to the recession, to reinvent their function.
Exciting times
The report, which retails for $499, was written by Reineke Reitsma, with Jackie Anderson, Tamara Barber and Rebecca Smith, and draws from Forrester’s own research and other sources. (Forrester also maintains an interesting blog for researchers at http://blogs.forrester.com/consumer_market_research/.)
In an e-mail interview, the Netherlands-based Reitsma, who is vice president, research director at Forrester, agreed with my view that these are exciting times for research professionals. “There are many developments going on that make it easier for market researchers to focus on adding value, instead of just sharing the numbers. Innovative research methodologies like [market research online communities], mobile research or online ethnography make it easier to get closer to respondents, and, in the case of mobile, track their behavior anytime, anywhere.”
Still, Reitsma says, the pressure on market research departments is increasing. “Executives expect high-quality insights even faster than they did before. There aren’t many companies who will see MR as a needless expense, however a real threat is the large uptake of listening software like BuzzMetrics or TNS Cymfony within companies. This software helps companies understand what’s being said about their brands online - in blogs, discussion boards, Twitter, etc. - and in publications. The reports coming from these tools give companies insight into the consumers’ emotions and engagement with their brands. The pitfall lies in the fact that as these insights travel across the organization, less research-savvy colleagues will use them without understanding their bias - that they reflect only the opinions of those customers most willing to share. The most successful firms will be those that always analyze community insights in the context of other research.”
The report argues that increasing numbers of large companies will create departments to manage, track and measure these external information streams and combine them with internal sources to generate insights and reports. Thus researchers will have to collaborate with these departments to understand just what they are tracking and measuring and also determine how to package and present the data internally.
Insourcing like never before
In-house research functions are insourcing like never before, trying to find ways to do more with less, which may be a boon to firms like Confirmit, MarketSight and Vovici, Forrester says. Reitsma expects the insourcing trend to accelerate, with online tool vendors seeing 15 percent to 20 percent growth. “The beachheads the tool vendors have gained will allow them to continue to enhance their capabilities with customer-driven insights. This insourcing will include routine studies of customers, some qualitative research that shifts to self-service market research online communities and the continued growth of comprehensive enterprise feedback management research tool capabilities.”
In addition, the recession has forced in-house departments to take inventory of previously-conducted research. This not only saves money by maximizing already-spent budget and decreasing current spend but it also helps improve institutional memory by exposing analysts to historical data and insights.
Consolidating vendor lists
The report also posits that research buyers will continue consolidating their vendor lists, constantly reviewing contracts to see which ones can be eliminated, amended or terminated. So where does this leave the research vendors? How can they keep themselves off the chopping block when those contracts are up for review? “Based on the conversations I’ve had with research buyers, it’s clear that the key lies in the contribution a vendor has to the company,” Reitsma says. “Market research vendors need to focus more on what makes them unique, and invest in the relationship with their clients. This means understanding the industry they’re in, tracking developments within that industry and not only reporting research results but making sure to put them into perspective. Especially when a vendor/client relationship is longstanding, or if the vendor does a lot of projects for the client, companies expect more from their vendors.
“Something else that came up in these conversations is that most client-side researchers have a strong need for benchmarks. They not only want to know how their brands are performing but they’d like to understand how this relates to other brands within their industry. Vendors that can offer this type of benchmark are perceived as more valuable.”
An excess of work
I asked Reitsma about the likelihood of MR budgets being restored once the economy improves and she says that an excess of work, not a lack of funding, has been the problem. “To better understand how the recession has changed market researchers’ lives in the past year, we’ve conducted a survey of Forrester’s Research Panel For Market Research Professionals about workload, the recession and prioritization. Contrary to expectations, the majority of respondents haven’t experienced a reduction in force or a budget cut, but the number of projects and the workload have increased in the past year.”
Further, she says, researchers have had to justify their spending more so than in the past and it has taken longer to get approval - realities that won’t soon go away. This also means that research vendors, who have felt compelled to lower pricing to remain competitive during the downturn, won’t be able to raise prices any time soon. “I do think that research buyers want to stick to the project costs they’ve been paying in the past year. They still are under severe scrutiny to justify all the costs made, which makes it hard for them to accept any price increase. If vendors want to increase their price it links back to one of my earlier comments: market research vendors have to add more value to make sure they can’t easily be replaced or end up in a price war.”