Is the research industry shooting itself in the foot over client incentives?

I think this ruling is likely to damage the UK market research profession – in terms of business, in terms of our standing with clients and even our relationships with customers/respondents.

My main concern is that this ruling reflects the traditional regulator and market research industry approach of deciding what is in the public’s best interest. Market researchers determining the rules in consultation with the Information Commissioner’s Office (ICO) looks very much like another example of our traditional ‘command and control’ style of operating, and makes us look out of touch with what customers want.

So, where do I think the problems with this ruling will be:

1. The first issue is purely commercial. The most economically efficient incentive is one that is ‘cheap’ for the provider to give, but is of high perceived value to the recipient. Client incentives often fit this bill. One dollar’s worth of value to the recipient often costs less than one dollar to the client to provide. At present, and irrespective of the current rules, client incentives are common in areas like customer satisfaction and online communities (from my experience as a consultant and analyst). A shift to independent incentives will increase the cost of projects to clients, at a time of financial crisis in the industry. Or clients can take the option of placing the work with non-research companies who are not bound by this ruling, because those competitors will not position the service as ‘pure research’.
2. My next concern is about our relationship with the people we call respondents, but who in the context of some types of research are better thought of as our clients’ customers. In an ideal world we would attract their co-operation without a formal incentive. However, if we simply ‘take’ from these people we will damage the relationship, so it makes sense to offer some recognition. These might be product- or service-related, but they might be less tangible, such as getting flight schedule information before non-respondents. This is what many customers expect. What many researchers have reported is that when a cash incentive is used the nature of a respondents’ engagement changes, away from co-operation and collaboration to simply selling a service to the company. In an online research community the voice of the customer is even clearer: they have joined a branded community to help the brand improve its offer, they want to be listened to, they want to be informed, and they want to be thanked – and they expect that thanks to be related to the brand (this can take a wide range of forms, including copies of research reports and visits to factories).

I understand that the MRS position is that the ICO has insisted on this rule being enforced in order to maintain the partial exemptions that market research has from a couple of the provisions of the Data Protection Act, and from some other regulations such as the Telephone Preference Service (which means researchers can still ring people who have registered not to be contacted by marketers).

A recent comment on this website makes it clear that one option for a research company is to conduct studies that would benefit from client incentives under the “Using research techniques for non-research purposes” guidelines – i.e. what we used to call Category 6. I am glad that this clarification has been offered, but I think the MRS should have actively promoted this option. If we market researchers are to stay relevant to research buyers then I believe we will need to embrace non-research purposes, not as a lesser method, but as simply one of the choices available.

Indeed when we conduct research along the non-research purposes lines we respect the respondents wishes about whether to ring/email them, we do not re-process the data, and we do not store the data for longer than is necessary nor for longer that has been expressly agreed – none of those conditions seems too onerous to me.