Mals Musings: The Death of Market Research
It is that time of the year again. We will go out into the market to gather insights that will eventually guide us to new competitive strategies. So we draft a brief and engage an agency to lead us to insights about our market, environment and customers.
By on Apr 2, 2010It is that time of the year again. We will go out into the market to gather insights that will eventually guide us to new competitive strategies. So we draft a brief and engage an agency to lead us to insights about our market, environment and customers.
Unfortunately, this has more in common with wish than reality. Most of our efforts to gain insight are doomed to fail. Market research as we know it is dead, thanks to increased fragmentation, customer sophistication, and poor strategists.
Like many of the functions of our organizations, market research has benefited from the decades of success that we have had. Budgets and headcounts have been increased in similar manner without question. The function has also been moulded around the need of the marketing teams. Sample sizes and coverage have increased exponentially, and in the end we are no wiser.
Somewhere along the journey, the aim, purpose and impact have been lost. Often the problem is right at the start of the process: Why are we conducting the research? What do we want to know? What are we going to do as a result of the research?
A problem well defined is 90% solved. So a problem poorly defined will be 90% wrong. If we had the discipline of getting basics right, we would quibble less about sample sizes and spend more effort on how we will convert insights into profitable actions. Instead of beginning with the end in mind, often it has ended before we begin.
We are in love with quantitative research because it is apparently objective with hard numbers. Right? NO.
Most insights come from difficult-to-do, qualitative approaches and the synthesis of data and information. And by insight I mean VRIO: Valuable, Rare, Inimitable and Organizationally aligned.
Unfortunately, part of the problem is often what we mean by insight. Insights by their very nature are actionable and unusual. Making a maximum of five calls a year to generate maximum sales was general knowledge not insight. Insights are more meaningful and specific to your organization.
In the end, research is a tool for guiding not to provide definitive answers, so we need leaders who can make decisions in a not-so-perfect world of knowledge and information. Increasing sample sizes and coverage is not the answer, since even if we conducted a census the data is out of date before the collation process is over.
Today, the amount and quality of the secondary data available is vast. We do not have a data problem but a problem of analysis and synthesis the crux of insight generation.
Most organizations are sitting on the answers to their problems but their inability to put the pieces of the jigsaw together ensures they continue to fight in the dark. It is a pity that this is also one of the scenarios where outsourcing does not help, since a thorough understanding of the organization is one of the key tenets to teasing out insights that can unleash latent potential.
We need research managers for the 21st century who are business savvy and outcome-focused instead of those who specialize in throwing random pieces of information over the fence to their marketing partners
Why will the market research agencies not tell us that trying to predict customers behaviour from research is difficult work that often leads to confusion rather than clarity? Every product message is tested with numerous fancy research techniques, yet so many fail to meet expectations.
Marketers need insight like accountants need financial information. But we need a proactive research function that is as focused on business outcomes as the rest of us. Insights or nothing. We are dying in the current data overload. Today, the research function is dying but it can be resuscitated.