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Change - The Future of Market Research

I'm a regular reader of the Market Research Heretic Blog . The banner above his blog posts reads "Market Research Death Watch". Many great points are made about how we take respondents for granted and how many survey instruments simultaneously gather useless data and reduce the chances of that respondent ever doing another survey again. Most important, the point is made that the market research industry is resistant to change and ultimately that will lead to its demise.

The arrival today of the latest Honomichl 50 list certainly supports the notion that the industry is in trouble. The numbers are the most brutal I've ever seen. Revenue has declined and when you focus only on straight research firms (those doing primary qualitative and quantitative research) that decline is even larger. Employment has dropped even faster (and this is measuring research firm employment, I suspect client side researchers were hit even harder). Jack Honomichl is certainly dour in his column, but I think if anything he is understanding how bad a hit research took this year.

The question is, were the results of this year and last (2008 also showed declines) just related to the recession or do they reflect a trend that will continue long after the recession is officially over? My guess is, we will see some recovery with the better economy this year, but the heretic's warnings should not be ignored.

Economists say we are headed for at least a decade of spotty growth and more frequent recessions than the last near 30 years of solid growth has prepared us for. Thus, clients will keep looking for ways to cut budgets to drive margins and stay competitive. In a world where clients have access to massive amounts of data from sources other than surveys and where they can gather survey data themselves using their own customer panels, it isn't hard to see that research companies will continue to see their budgets cut.

I fully agree that if we don't change, we will indeed cease to be relevant. There is no question that our roots in social science research (with strict rules on sampling and data handling) have made the industry resistant to change. Every change and innovation was met with skepticism and deep resistance.

Despite that, we have indeed changed quite a lot. We routinely accept results today that would have been scoffed at 30 years ago. Many statistical techniques that were handled exclusively by the stat gods are now routine. New techniques allow research data to drive decisions in ways that were hard to conceive of in the past. So, while the industry is averse to change, the pressures of the free market do force it to change.

I think the pace of change is about to pick up. Researchers today are not as married to social science research as they were in the past and so they are more open to find research applications that work, even if they are not in textbooks. In the past we worried about respondent cooperation rates, but the "tragedy of the commons" more or less ensured everyone saw it as someone else's problem. Now panel companies have good reason to protect their panelists from bad survey experiences and good researchers recognize that you have to truly engage a respondent to gather data that has value.

In the end, the insidiousness of the free market will indeed bring about the death of many research companies. Those that remain will evolve in ways we can't fully conceive of, other than to say that they will bear no resemblance to what we see today.

I'm hopeful that TRC will be one of those firms. Next time I'd like to give a specific example of how we are engaging respondents, staying true to our philosophy of choice, and applying advances in analytics and technology to aid our clients in driving results.

President, TRC

Rich brings a passion for quantitative data and the use of choice to understand consumer behavior to his blog entries. His unique perspective has allowed him to muse on subjects as far afield as Dinosaurs and advanced technology with insight into what each can teach us about doing better research.  


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Guest Sunday, 23 February 2020

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