Market Research & Self-Service

Brad Bortner from Forrester put out a report earlier this year on the state of the online market research business and Forrester’s predictions for 2009. Of course we were a little miffed that he did not include us in his report (maybe it had to do with us not paying Forrester 23K for analyst access?) However, the report was not simply about vendors but more about the industry and where he thinks its headed in 2009, given the current economic conditions.
One of the things he riffed on was how smaller and even mid-size market research companies will be under severe price pressure over the coming year. There are two factors that will be influencing a lot of pressure on MR consulting and MR execution companies:

  • Obvious budget-cuts on MR spend because of the recession and depleted resources
  • Self-Service tools will continue to undercut and put severe pressure on MR firms

As I have stated in earlier blog posts, market research constitute about 30-40% of our usage. Within that, over the last few years, we’ve seen an increase in the balance of MR companies vs. internal departments conducting self-service research. A few years ago the split was 70-30 in favor of the MR companies and today it’s almost reversed.

We also recently attended the CASRO conference and one of the top issues of the conference was about how “DIY Survey Software” is undercutting MR firms. What was ironic about that presentation is that the presenter actually used a self-service tool to gather data for the presentation!

As an aside, I have talked to the owners of many MR companies like PowerFeedback, Edge Research, Clarity etc. They all echo the same sentiment: the obvious scrutiny on “value” and budget justification and the current economic conditions have put a freeze on “pulling the trigger” on many projects. We all know, in a recessive economic climate, value becomes the deciding factor on many projects and deals.

One approach for MR firms would be to actually leverage the low-cost tools to start cutting their own cost models as well as being creative in solution structuring when dealing with clients that are under severe price pressure. By definition self-service tools will always cost exponentially lower than full-service projects due to the obvious human capital investment. Now, the question becomes what do I mean when I say “leveraging” self-service tools for MR companies? Here are some examples – and there are just some ways I can think off the top of my head:

  1. Provide best-practice and training services to clients who want to do their own research on self-service tools. Software vendors typically do not want to be in the training and consulting business. While some vendors may offer such services, its always an afterthought and is generally not high up in the priority list. Just like how it does not make sense for MR companies to reinvent the wheel and develop in-house data-collection solutions, it does not make sense for software vendors to be in the consulting and services business and most of the successful vendors in this space actually are not (this is why we promote our partners, instead of compete with them).

    A good example of this is my good friend Fred Van Bennekom from GreatBrook consulting (http://greatbrook.com) — he still does full-service consulting, but has developed a niche for survey design and conducts a few seminars and training sessions a year. Needless to say, that obviously leads to more consulting business.

  2. Propose Innovative Saving Solutions to Clients – Traditional MR (quantitative) projects have been done using the same old tried and tested methodology – Define the project, use a sample provider like eRewards, GMI etc., use a survey tool, collect data and produce tabs. Yes I know this makes money. But are there other models?

    Can you put a model together for “Standardized Reports” instead of producing custom reports for a cheaper price? Can the panel recruitment component – which is usually a fair chunk of the costs of a project be eliminated by directly putting ads on social networks like Facebook, MySpace etc. – Most of the large online properties have self-service advertising models already in place. Can this be leveraged to drive a segment to a survey? Can you have standardized templates (surveys) that you can propose to your clients to reduce the cost of developing the survey and pass those savings on to the clients?

    Can you simply put ads out on Google to drive traffic to you survey? If you pick the right keywords, you can get traffic at $.05 to $.10 a click. Does this model lend itself to your project?

  3. Help your clients think outside the box for qualitative research – Focus groups are expensive to execute on. Can you propose online alternative solutions like IdeaScale to significantly offset cost of executing on a focus group?

    One of our MR clients recently used IdeaScale as a solution to create online micro-feedback communities around very specific products and ideas. The idea was to drive traffic to an IdeaScale implementation that engages the users to provide qualitative feedback. They in fact did this as a proof of concept to the client itself to show that a fair amount of qualitative data can be collected online without going through an expensive focus group process. This was only possible because they used a low-cost self-service tool.

    While I don’t think this can totally replace the need for focus groups, the budget for execution for such projects is literally a fraction of what it’ll cost to execute on a focus group. Again, the question here is “value” – is there enough value here? Maybe or in some cases maybe not. But it’s something you can consider.

Finally I would like to know from you – if you are in the MR business – what do you think we should do in this market? Reduce price? Offer more tools? Provide a market-place for data and research? Please comment below or if you feel like emailing me directly please feel free to reach out to me :
 
vivek[dot]bhaskaran[at]surveyanalytics[dot]com

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