Market research agencies are having to come to terms with significant changes in the way they do business. As clients consolidate, forming larger international groups, they are increasingly demanding that their suppliers are able to service them in all the countries in which they operate.
While this process has impacted every company which has a supplier relationship with a trans-national group, it is having a particular effect on market research agencies because of the way the industry has traditionally marketed itself – on a person-to-person basis, through individual contacts, dealing with projects ad hoc.
Now, market research companies are having to form pan-European and even global networks (either by mergers and takeovers, or by forming alliances with companies in other countries) in order to be able to offer their biggest clients consistent levels of service.
Medium-sized companies are facing a stark choice: merge with other similar sized agencies so that together they can afford to invest in the people, training and equipment they need – or lose their clients to agencies that have the necessary critical mass.
But it is not just service levels that have to be consistent across borders: the actual research processes, and the way in which information is presented to clients, has to be standardised.
Bob Qureshi, managing director of Harris Research, part of the Taylor Nelson Sofres group, observes: “If you want to work with the Coca-Colas or the Procter & Gambles of this world, who operate on a multinational level, you need to have an international reach yourself.”
Dave Phillips, client services director at Research International, adds: “Personal relationships are always going to have some value – but in the longer term, research agencies need to market themselves professionally and be able to provide full support. Larger clients are looking more and more for partnerships with research agencies, rather than hiring them on an ad hoc basis.”
But Teresa Dance, business development director at BMRB International, stresses that size alone is not the main deciding factor in winning business from an international client. “It’s not just size – it’s also about the strengths of international networks that market research agencies have. There are very few agencies which are truly global themselves, so most of them have to form alliances with similar-sized companies in other countries.”
Qureshi adds that while there will always be a demand for small, specialist one man bands and consultancies, “medium-sized companies without a global presence will be hit hardest”.
His observation is echoed by Gordon Pincott, client services director at Millward Brown, the ninth biggest research agency in the world.
Pincott says: “The bulk of the research buying power is increasingly being concentrated with global client companies. There is still plenty of ad hoc work for the small consultancy, but the big clients are looking for approaches that they can apply across a number of national markets.”
And being able to service such multinational cross-border contracts is no longer just a matter of market research experience and expertise. Increasingly, clients are demanding that agencies have minimum standards for handling paperwork and other back-office systems – usually provable by qualification for ISO4750 – and that computer systems are compatible.
As Pincott points out, “clients are looking for you to be able to deliver everything electronically. And that doesn’t just mean having ISDN or Internet links: they are increasingly looking to be able to take the information you supply and absorb it directly into their databases along with data from other sources.
“You need to be able to cope in terms of the technology used, and also in terms of formatting your data so that it meshes with their database structures.”
It is this need to invest in developing administrative expertise in IT systems that lies behind much of the consolidation which is gathering pace in the market research industry.
But the spread of IT is having another effect on relationships between market research agencies and their clients – or at least, their bigger clients.
BMRB’s Dance observes that “more and more clients have their own intranets, and we are being asked to supply information and analysis along with the data we provide”.
Client-side intranets mean that research is being made immediately accessible to anyone within the client company with access to the intranet, and is no longer likely to be filtered through a specialist market research or planning department. That in turn means research agencies have to think more about how they present their information and how they can add value to it.
It also means that market research companies can no longer afford to be too precious about their work. Phillips says, “agencies sometimes get offended if clients don’t use the research exactly in the format they deliver it in. That’s ridiculous.”
Researchers have to be aware of how their clients will want to use the information they are providing. If they are worried about clients misinterpreting results, then it is up to them to present those results in a way that reduces or eliminates that risk – which is all part of the added value package clients are looking for.
Richard Windle, a director of market research agency IPSOS-RSL, believes “all of the large agencies can tackle most research problems. Where they can add value by means of special analysis techniques or comparisons with other data, this can be a selling point.”
The rewards, for those agencies which are of the right size, can be substantial. As Phillips points out, many international clients are in a very real sense looking to larger research agencies to take on some if not all of the functions that would once have been performed by in-house researchers.
While those clients may also be looking to cut costs, suppliers can usually offset any shaving in margins against the guarantee of set levels of business over long periods of time.
In some cases, the relationship can be an extremely formal one. For example, BMRB International has a specialist 18-strong research unit working full-time on projects for BT’s market research department, which presents its findings on a weekly basis to BT and also to BT’s clients.
But researchers who do not want to see themselves as cogs in some greater machine can take heart from the widespread belief that personal relationships will always have a part to play in the market research industry.
As Windle observes: “In practice, what guides the choice of a research agency is familiarity with their work and the personal relationships that have been built. Clients want to work with people they know and trust. When a client moves to a different company, the agencies he or she has used previously are likely to get a look in. On the other hand, those agencies who may have built up a relationship with a previous contact should start worrying about whether they will keep the business.”
Grounds for divorce?
Market researchers talk too much, they can be commercially naive and they spend too much time sitting on the fence. Harsh words: but then, if researchers will insist on asking their own clients what they think about the researchers, they only have themselves to blame.
These comments are drawn from a paper presented to the Association of Qualitative Research Practitioners by Anne Ward, managing director of qualitative research agency IPSOS Insight, and Donald Osborne of Osborne Market Intelligence. They conducted a two-phase study, with in-depth personal interviews with 12 major buyers of qualitative research followed by a questionnaire sent out by post.
Clients want to work with people they know, trust and like, the survey found. While buyers are interested in meeting new researchers, they are not swayed by cold-calling, preferring an introduction or recommendation from someone they know.
Ward says: “People tend to be very loyal to their quantitative researchers and are reluctant to change them”. In many ways, she suggests, the relationship between the client and the researcher is like a marriage – and like a marriage, the biggest danger is over-familiarity and boredom.
Researchers can get too close to the client, to the extent that they are no longer able to see things objectively – or recognise that the client is becoming unhappy. “People get so entrenched in the relationship that they don’t hear what the client is saying any more,” Ward says.
Clients value strength of mind and independence, so long as researchers are diplomatic when they present their findings. As Ward says, “remember when you give bad news, you are killing someone’s baby”.
Clients are also looking for sensitivity to their marketing needs, and an understanding of the political landscape they have to function within. Above all, though, they want real contributions that help their own thinking about whatever the problem is.
What clients like the least about researchers – in addition to the three peeves mentioned above – include arrogance (although sycophancy is worse); an inability to listen to clients; and a habit of bending the present problem to fit the researchers experience of favourite techniques.
For those market researchers who are looking to win business from new clients, Ward says: “Expect the courtship to be a long one – and make sure you keep your business friendships in good repair”.