Fully staffed internal market research departments have been going out of favour. During the recession in the early Nineties their demise was mourned by industry pundits who feared, often rightly, that a lack of internal investment in research know-how would be accompanied by an industry-wide loss of skills and understanding.
In the past few years agencies have begun to seize opportunities resulting from the clients’ skills shortage and the renewed interest in research as a marketing tool. Many see the lack of a full client research resource as a positive development.
John O’Brien, chairman of research agency BMRB, says: “The model of a fully staffed internal department is going out of style. Apart from anything else it can be costly for clients.”
O’Brien suggests that partnership-based relationships between clients and suppliers are replacing in-house facilities and ad hoc arrangements. This new approach benefits clients. He says: “Developing partnerships with a small roster of agencies still allows for a degree of competitiveness, but you don’t always have to go to competitive tendering when a project comes up. The more you do business with one agency, the less you need to brief it. They spend less time looking for new business Â and therefore more time on yours Â and with a partnership you can engineer a corporate memory. “
The client perspective seems to echo O’Brien’s viewpoint. At Royal Mail, research agencies appointed to handle continuous work are given three-year contracts after tendering. But, for projects worth less than £106,000, an unofficial group of about 20 agencies have call-off contracts with the organisation. These agencies can be appointed for projects without having to go through a competitive pitch.
Diana Brown, head of marketing and sales information at Royal Mail, says: “Most agencies we deal with we have worked with for years and we value their understanding of our business. We don’t often have time to see presentations from new agencies Â and while a new agency may impress us, it is rare that we do try it out.
“Our roster agencies understand what we do. They build on their knowledge of us, and we trust their potential performance and don’t check everything they do. Often a long-standing agency will come up with something we have overlooked, perhaps remembering a finding from previous research. When treated as part of the team, they feel more involved.”
Another way in which client/ agency relationships are changing is in terms of information and advice offered. Bill Pegram, chairman of Pegram Walters, says: “Chief executives and marketing directors don’t lack data but they may lack understanding of what it means and how to apply it.
“Basic data collecting operations will be superseded as more clients collect data themselves and look for diagnostic understanding and analysis from suppliers.”
O’Brien says: “Clients take research agencies’ ability to number-crunch for granted. But everything I read on the subject suggests that great design, excellent implementation and superb production of results is not enough. Clients are looking for more than answers; they want analysis, interpretation and recommendations too.”
This drive for greater interpretation of results is particularly important when it comes to qualitative data, which means that the relationship held with qualitative agencies is key.
Trevor Richards, managing director of RSGB, a division of research giant Taylor Nelson Sofres, says: “We have an informal arrangement with a number of clients. About six companies have approached us recently, which would like us to be on their limited roster of agencies. For quantitative work these rosters tend to include five to ten agencies; where qualitative agencies are involved there may be more than 20.
“More agencies are held on qualitative work rosters because clients want the same person to interpret data and do the fieldwork. Qualitative agencies are often small, so they only take on a few projects at a time if senior people are to be involved in the fieldwork. With quantitative, most fieldwork will not involve senior people.”
For partnerships to work clients must be prepared both to make a commitment to the agency concerned and to listen to feedback.
O’Brien says: “Agencies have to know they will get repeat work from a client before they concentrate staff on that business. Then dedicated staff can build up knowledge of that client to give the full service.
“It is vital that opportunities to express dissatisfaction and improve performance Â on both sides Â are built into the process. This has to be a frank exchange based on mutual respect so the partnership can develop.”
Once the relationship is established, it still needs to be reviewed.
Russ Nathan is chairman and managing director of Romtech and chairman of trade body the BMRA until February. He says: “The reality is that while a long-term relationship is the best way to handle research done on a regular basis, when the contract comes up for renewal, perhaps every two or three years, it is a good idea to check whether the incumbent still has the best techniques, best ideas and best approach.”
Most practitioners agree that agency/client partnerships are the way forward for UK research. However, the prospect is not entirely rosy. Nathan warns: “I can only see one factor which might change the evolution of research relationships, and that is Internet-based data collection technology. When companies find they can collect data from the Internet using their own resources they may not feel they need agencies so much.”
Royal Mail’s Brown also sounds a warning note: “More agencies are trying to offer themselves as consultants, though few genuinely have the breadth of experience to do that job properly.
“I think they are feeling threatened that management consultants are taking business away from them, though in my experience Â and this is a generalisation Â management consultants are not that good at research.
“I would rather agencies found better ways of disseminating information and controlling fieldwork, than trying to take on the consultancy role when they don’t really have the expertise for it.”
What does seem clear is that through the process of being asked to interpret and recommend, and to be part of the discussions and the decisions of market research, some agencies will develop more advertising agency-style relationships with clients.
Others will stick to their number-crunching guns and carry on doing what they do best. As the two sides become increasingly polarised, we may see a brave new world of market research with more agencies offering a greater breadth of expertise Â and that can only be a good thing for the clients.