Tailor your approach for bespoke fit

Worth over £2bn a year in the UK alone, the market research industry is well placed to overcome the challenges it faces, not least the emergence of social media.

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“The nature of market research has changed,” claims Rowland Lloyd, chair of The Market Research Society. “These days, research companies’ data is no longer in isolation from client data. And it means that clients get so much more from research agencies than just data delivery.”

It appears that the market research industry in 2009 is not simply about crunching numbers and handing over the statistics to clients. It’s about developing relationships that allow market researchers to act as insight and information partners to brands, rather than simply suppliers.

Consultancy approach

Marketers commissioning agencies for market research should not be afraid to ask for more than spreadsheets full of data, says Lloyd.

“There is a greater expectation from clients, not just of delivering the summary of data but making recommendations,” he says. Across the industry, companies are asking their research agencies to develop a more “consultative approach”, he adds.

Claire O’Connor, director of EMEA research and head of insights at TV brand Discovery Channel, adds that she is collaborating with “complementary” brands to add depth to existing research material.

“We think the trends we have identified have impact beyond our own brand,” she says. “There’s potential for so many companies to tap into these insights.”

This is just one facet of how the nature of market research has been changing in the last few years. Whether talking about in-house teams, large agencies or boutique shops, the industry has been forced to adapt to a climate with fewer projects available, more conservative clients and rapidly evolving new technologies.

Jan Shury, joint managing director at IFF Research says: “Making recommendations to clients is partly about a trend that started before the recession where market research agencies are trying to move themselves up the supplier ‘food chain’. They can do that by adding value through recommendations.”

He adds that this is set to continue as agencies seek ways to persuade clients that it’s worth investing in research while they are busy cutting back. But he warns that to keep research costs low, some clients may start demanding that agencies drop any recommendations and just give them the basic data.

“The public sector is a major research client at the moment,” says Mark Speed, also joint managing director at IFF. “And to prevent jobs being slashed from its research departments, one of our public sector clients – who will remain nameless – always asks us not to recommend anything in our reports as that is their job.”

Nick Bonney, market insight director at Orange UK, adds: “There is not one simple answer. Sometimes you just need a number; other times you need deeper insight.”

O’Connor says she too remains realistic about how much consultancy can be provided by agencies. “It’s a very big ask to say ‘how will your data impact our business?’ I think that’s pushing it a bit. Companies and agencies both just need to work harder on collaborating.”

Client/agency relationships

The collaborative nature of brands and their agencies is another important trend at the moment, says Lloyd. He claims research is integrating far more heavily into the work that brands are carrying out on an ongoing basis. Because companies tend to have such large customer data programmes in-house, they

want their research to fit into this.

“That changes the relationship,” he says. “Some clients have specialist skills and knowledge about their sector. This is good for the industry as you get more from a market research agency than just data delivery.”

Nick Corston, managing director of consumer insight consultancy Sense Worldwide, adds that he is seeing a big rise in clients asking for his “master planning” service, which does not simply provide statistics but interprets consumer insights for brands and their agencies.

For example, when working for Johnson & Johnson, the agency created a “book of insights” for all those working on the brand to understand. At Diageo, Corston says Sense helped define the company’s challenges in creating brand experiences for consumers, which helped the business work out its forward-looking strategy.

The growth of online research

Another area that is having a serious impact on how brands use research is the move by research companies to online collection. The share of total research spend on internet-based quantitative data methods now exceeds spend on both face-to-face and telephone, according to the Market Research Society.

“The cost is important to clients, along with the speed,” admits Lloyd. But IFF’s Speed doubts just how much of an effect online collection will have on the industry and brands as a whole.

“Back in the Eighties, everyone said that telephone surveys were going to kill off face-to-face. Now everyone says that everything will be done online. But there’s still room for other methods,” he says.

For Discovery’s O’Connor, online quantitative research is not just a cost-cutting method, it’s a manageable way of making sure that her insights are still up to date, even a year or two after a major report has been published.

“We have created an algorithm so we can update our information on a regular basis,” she says. “So many people are guilty of carrying out major studies and then putting them on the shelf. Using online panels is a good way for us of making sure we keep our research alive.”

Changing face-to-face approach

For Lloyd, as online has grown as a research discipline, the relevance of brands using face-to-face methods has moved into an area he calls “the more complex premium end of the work”.

He says that while marketers still ask for projects to be carried out in-home or talking directly to consumers, these tend to be for projects that require some detailed feedback or when working on briefs where the volume of responses is less important than what is said.

At IFF, Shury says that while many researchers have seen more demand for online services, this is mainly in private sector work. In the company’s public sector work, it still uses a lot of offline methods to reach consumers, who don’t have access to computers.

“Or we will work with high-level stakeholders,” says Shury. “These people prefer face-to-face contact. You really have to be careful to fit the right method to the respondents.”

New ways of reaching respondents

Reaching respondents in a manner that makes them respond as effectively as possible is always a key concern for marketers. Alistair Leathwood, managing director of FreshMinds Research, claims that communities are becoming much more important to researchers.

Rather than just polling people one at a time on a standard form, tapping into specialist communities for their opinions can really pay dividends. Just last month, consultancy Added Value launched its AV-id tool, which allows clients to send out ideas to a large community and receive almost instant responses.

“As market conditions ease, more and more clients will realise the value of using communities to conduct continuous research,” says Leathwood.

Lloyd at the MRS adds that reaching respondents in the manner they desire at the time they wish will also become important. He sees hand-held devices as a usual weapon for clients or agencies carrying out research.

“Hand-helds are very accessible. You get polls where people want to reply via quick devices. There is a place for them, but they have to be used carefully or you could end up without a reflective picture of people’s views,” he says.

Bonney at Orange is also excited by the potential of hand-held offering more “location-based” research in future.

Not all brands need to get carried away with new technology. IFF warns that clients need to avoid getting bamboozled by every fad in research. Instead, according to Speed and Shury, it is vital to think first about those you are researching.

Government research, says Shury, is one of the areas holding up relatively well in the recession. But many people who are the targets of central or regional government marketing drives are those who do not participate in the type of middle class, relatively wealthy circles that can afford Blackberries or iPhones.

He thinks that the research industry needs to avoid getting too carried away with being available on hand-held devices unless the respondents are keen to participate in research this way. Shury says that it’s better to call it “multimode research”.

Real time

But while research agencies are busy debating whether people should be able to respond to surveys through their smartphones or online, many consumers are already offering up their opinions on brands, customer service and cultural trends on real-time social networks such as Twitter.

Lloyd at the MRS is cagey about what effect real-time networks like Twitter will have on researchers. If brands can find out what people think of a new product by subscribing to Twitter streams, why should they hire professional companies to do the same thing?

Lloyd says: “I’m sure this is an area that the industry is interested in.” But he warns that real-time media is in quite an experimental phase and to make this a more rigorous discipline, research companies would need to “differentiate between anecdotal evidence and rigorous managed research”.

O’Connor adds that while Twitter may be important to some of the younger audience for her brand, research has not so far revealed it to be of major importance. Similarly, mass use of real-time research isn’t something that has yet affected IFF’s public sector clients.

But with so many new media businesses moving into assessing consumer sentiments through online media, research businesses will need to ensure they don’t fall behind on innovations that offer clients instant results. The market research industry has largely weathered the recession but with client budgets likely to be lower over the next few years, only new products will help keep the traditional research industry ahead of the curve.

IFF’s Shury sums up: “There are some areas that are still pretty robust. But I think it’s clear that this is not a recession proof industry like people were saying before the downturn.”

fact focus

What is market research?

Market research is a process that aims to discover what people do, think, need, believe or how they act.

How is market research carried out?

Market research is split into a number of methodologies. Quantitative research uses scientific facts and results in statistical, numerical data. Qualitative research, by contrast, is the examination, analysis and interpretations of observations to undercover underlying meanings.

The main quantitative market research methodologies in the UK are internet-based research, telephone, face-to-face and postal research, non-internet-based continuous panel or access panel research and observational research.

Qualitative research has multiple methodologies, including ethnographic research – which aims to understand cultures – and focus groups, where people talk about their feelings and impressions of objects, brands or ideas.

figure focus

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Market research in numbers

The total UK market research industry is worth £2.164bn in revenues, which increased 6.22% in 2008.

The UK is the world’s second-largest market for market research.

lThe ratio of UK domestic research to international work has been relatively constant over the last decade at 3:1.

In 2008, UK domestic research expanded by 3.8% while international research grew

by 12.5%.

The majority of UK market research spend is allocated to quantitative methodologies, with less than 10% going to qualitative.

The share of total research spend on internet-based quantitative data collection methods now exceeds spend on both face-to-face and telephone.

Internet-based quantitative data collection methods receive more than a quarter of total spend, compared with slightly less for face-to-face. Telephone research receives just under a fifth, while postal research has witnessed a slight increase in spend during recent times.

Source: Market Research Society

in practice

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Top tips

Ask the right questions. It’s no good asking customers if they like a new product when they’re more concerned about the service you offer.

Use the right media to ask the questions. Make sure you have the capacity to

find respondents wherever they are comfortable – online, offline or on the move.

Don’t use research simply to confirm your strategy. Make sure you design your research to be open in its results, rather than using it to support suppositions.

Stay up to date with new technologies. Real-time research may be making an impact sooner than you think.

10 suppliers you need to know

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TNS

– Claims to be largest custom research business in the world, owned by WPP.  www.tnsglobal.com

Ipsos MORI – Specialists in advertising, loyalty, marketing, media, social & political and reputation research. www.ipsos-mori.com

Millward Brown – Has 77 offices in 50 countries, also owned by WPP. www.millwardbrown.com

GfK – Has more than 10,000 employees in more than 100 operating countries. www.gfknop.com

AC Nielsen – Headquartered in New York, its services include media and market measurement. www.nielsen.com

BMRB – Runs consumer confidence research and brand owner insight studies. www.bmrb.co.uk

Mintel – Services include a global new product database to record product innovations. www.mintel.com

YouGov – Operates a panel of 250,000 respondents in the UK who answer tailored questions. www.yougov.co.uk

Forrester Research – Had revenues of $240.9m in 2008 with profits of $29.2m. www.Forrester.com

Datamonitor – Claims to have 6000 clients around the world, specialising in markets such as automotive and consumer goods.

www.datamonitor.com

2010 predictions

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Alistair Leathwood, managing director of FreshMinds

“The next 12 months will see the way that communities are being used for research undergo a transformation. Instead of being mainly used for gathering qualitative data and answering some occasional quantitative questions, we’ll see co-creation becoming more mainstream as brands use research communities to engage customers in new product development initiatives.”

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