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Effective Or Efficient? Which Market Research Business Are You in?

Each of us has to figure out which business we want to be in - the one that works in the efficiency business, focusing on marginal improvements, or the one that strives for effectiveness, impact.

Hands holding traditional and energy efficent lightbulbs

 

By Edward Appleton

One question that I constantly come back to in the day-to-day business of Market Research is: if what we do is so powerful, helping companies get in touch with their consumers’ needs, wants, desires, why is it that we aren’t on a more exciting roll?

Many possible answers to that question, but here’s my take: we don’t really understand the importance of being not just efficient but being effective.

This is a critical, but not often stated difference – efficiency is all about doing something better, effectiveness is about doing things differently.

Efficiency improvements are important, no doubt – but often lead to incremental improvements. Marginal gains. This isn’t the sort of climate we live in. Capital flows to where the big wins are, where whole new markets are likely to emerge, disrupting current ways of doing things.

Where are we in MR? I’d say we’re just about at the moment where we believe we can take a whole huge chunk out of the cost of executing insights work. Maybe the quality aspect will remain a constant (perhaps an aspiration); speed of project turnaround, data collection, is certainly hugely quicker.

Is this – and this is a big question – going to make a difference? I have my doubts. We’re fighting the battles we think are what the market needs, but maybe we’re becoming myopic. My take.

1. Tactical Research adds Minimal Value

How many of the research projects you’re working on are actually evaluating something – a pack revamp, a branding option, a concept idea – that is more tactical than strategic?

I’d fear the answer is more than 50%.

If that’s true, then we have cause to worry, simply because significant value is seldom added at this stage of any project. Critical decisions have already been made. MR needs to see these projects are perhaps bread-and-butter, but the real thinking work and added value is elsewhere.

2. Methodology is Not a Goal

Many Agencies – understandably – are keen to promote methodological advances. It gives a competitive advantage, leads to (hopefully) door-opening conversations. Makes sense.

But how much actual impact are these improvements likely to make? Even disruptive propositions – lowering cost radically – are arguably more of the same, methodological changes. Do they actually make things better?

This is a shibboleth, but as long as we continue to believe that the future of MR is in methodological advancement, I fear we will be forever pushing the incremental gain line, not making any significant progress in terms of capturing more influence and value

3. Strategy is where MR belongs – but how?

An ongoing challenge of any MR project is the management of the strategic impact and perceived value. If you are working on projects that simply measure something – stakeholder satisfaction, say – adding real value with your recommended actions means being part of a strategic team that has operational responsibility, KPIs, year-end and strategic goals.

The perspective is a broader one – encompassing sales, supply chain, finance, customer service. Market research isn’t automatically involved – but in my view it should be.

We need to re-engineer our involvement levels, ditch a MR legacy positioning as peripheral, periodical. Our voice is potentially immensely powerful – but only if it’s heard by the right people (senior management) at the right time (early), and resonates because sufficiently well informed by broader business issues.

So often companies state they’re driven by the voice of the consumer, but how often is the reality different, where companies are more operationally driven, with the MR department periodically involved, plugging in data as called for? Maybe it’s this behavioral pattern, often organizationally embedded and driven by external forces, that drives part of our collective DNA (if such a thing exists) – delivering great data, but seldom capturing the full value of our activity.

The model has worked reasonably well historically, we’ve avoided the big bumps caused by economic cycles that other services industries such as advertising has gone through. However, when the data river can and does flow around the MR department, it may not be a good model for the future. We live in an age of disruption.

Each of us has to figure out which business we want to be in – the one that works in the efficiency business, focusing on marginal improvements, or the one that strives for effectiveness, impact. There may well be no middle ground.

Whichever camp you’re in, I’d suggest we’d all benefit from shouting louder, not just within the MR community, but in areas we’re hardly known. Pushing for more strategic involvement, documenting the impact.

The MR future could be bright, but it’s not a foregone conclusion. I remain optimistic.

Curious, as ever, as to others’ views.

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7 Responses to “Effective Or Efficient? Which Market Research Business Are You in?”

  1. john griffiths says:

    May 7th, 2014 at 8:14 am

    well perhaps the best way is to grade every piece of reasearch with an S for strategic and a T for tactical and to keep score. I have been in enough meetings where some budget holder says “I believe in the brand but” and then goes tactical. There’s nothing like pointing out that 80% of the budget or the research projects are in fact tactical to make the commissioners self conscious about the absence of strategic support. You may lose the battle but you might win the war. I’d codename this treating an STD: Strategy Tactics Disorder!

  2. John Winger says:

    May 7th, 2014 at 8:50 am

    This seems to be drawing a line where there need not be one. In the current climate, I believe that we must be both efficient and effective. Efficiency should probably follow effectiveness, but without efficient and timely execution and delivery, our brilliant insights will not be as effective. Clients expect both.

  3. Gil Major says:

    May 8th, 2014 at 7:46 am

    I’m new to market research. My company sells MR, but they are finding that customers buy it one year, and then disappear the next.

    Any reason why they do not continue?
    They say they don’t have budget, but perhaps they don’t see enough value to continue the next year?

    Any thoughts or similar experiences?

    thankyou in advance

    Gil

  4. Edward04 says:

    May 8th, 2014 at 9:23 am

    @jon / thanks for chipping in, like the STD re-think. The temptation with the annotation of S versus T is to upgrade one’s own perceived self-worth and give projects an S that others might give a T. More the challenge is how you make that shift from T to S work outside of your own mind, in the real world.

    @john – not sure that the effectiveness/ efficiency thing is an artificial dichotomy. It’s not about saying – sure, we as an Agency do both, we’re effective and efficient. It’s more overarching if less precise – that in my experience many MR projects are about efficiency, no more. Still there are two many decks full of data, the examples of “brilliant insights” are rarer. The challenge I see is that efficiency will become a price-issue, machine intelligence a key competitor – and MR agencies would need to reach different audiences to execute projects about “effectiveness”, essentially strategic, where the default belief set might be: give that to an MR Agency? Are they sufficiently savvy business advisers? Glad to sense your confidence though – hope it is widely shared in an industry where the word Disruption is writ large.

  5. Steve Needel says:

    May 8th, 2014 at 9:28 am

    I’m with Mr. Winger, in that I don’t think it’s either/or, it’s both and more. The point that you make, Edward, that most resonates with me, is the timing of input. As a supplier, I’m often at the end of a chain of decisions, testing whether those decisions are a good idea or not. When I’m more effective with my clients, it’s when they involve me earlier in the process and I can hear the strategy and the rationale for the tactics that execute the strategy (what we’re testing).

    I also draw less of a distinction between strategic research and tactical research than you might be suggesting. To me, good tactical research comes from a good strategy and a lot of times, a good strategy is a marketing decision, not a research decision, in the same way that good creative is not always amenable, in the development stage, to research input. Of course there is tactical research for the sake of tactical which will be seen for what it is and calls for efficiency. But a lot of tactical research is testing how to execute the elements of a strategy, and I don’t have a problem with that.

    And, as ever, a well-thought out piece.

  6. Michael Hollon says:

    May 8th, 2014 at 12:28 pm

    As Mr. Winger pointed out – clients expect both. A research should be able to do both and be able to know when tactical findings are needed and when strategic findings are needed. The closer one is to the ultimate decision makers (execs at client firms) the easier it is know when each type is needed.

  7. Judy Bernstein says:

    May 13th, 2014 at 2:33 pm

    Effective vs. efficient, strategic vs. tactical, disruptive vs. incremental – all of the above are appropriate arenas for marketing research. Since, however, it is innovation that seems the mandate of the moment, perhaps one way MR might better position itself, make itself more relevant to where “Capital flows” as Edward Appleton says in this thoughtful blog, may be by detailing all the ways Insights can contribute to Innovation?

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