The commercial imperative

There are a number of factors driving this, but the major force at play which defines today’s research industry is the focus on methodology over commercial applicability. As insight professionals it is absolutely right that we take methodology and technique very seriously and strive to execute approaches that strike the right balance between robustness and pragmatism. However, in many instances, our focus on this area can often distract us from, or even inhibit us, in delivering commercially valuable results.

As researchers we are often unwilling to push the envelope with our insight and use it to build ROI-based conclusions that can directly influence final business decisions. This is because the purist gene within us sees all of the assumptions and imperfections required to reach this end state and pulls us up short. However, decisions still need to be made and business cases are still drawn up.

To reverse the decline in respect we need to re-think our priorities. Commercial applicability and value needs to be seen as more important than methodology. But what is ‘true commercial value’? Is it caging our research findings in their commercial context? Yes, but that’s only the start. Is it providing commercially relevant recommendations for business strategy? Definitely, but that’s not where it should end. As an industry we need to become more adept at blending consumer research data with other business data sources and become more skilled in the science of decision support and economic evaluation.

Where insight meets finance

Analytics has a strong role to play in this transition but even here there is still an emphasis on technique over application. Approaches such as conjoint analysis have made leaps and bounds from a technical perspective but more focus needs to be placed on enhancing the commercial sophistication of market simulations to improve their ability to directly inform business decisions. Huge scope exists to integrate existing sales data, distribution and marketing information as well as product ranging, competitive set and game theory to develop powerful financially-orientated scenarios that can directly inform an organisations future strategy.

Rick Keen, senior insight manager at Direct Line Group says: “We regularly employ a range of analytical approaches such as conjoint analysis and econometrics to uncover the results we are looking for and while these techniques themselves are extremely powerful and deliver great research results, where the organisation truly realises the benefits is when we dovetail the results of this analysis with the actual business planning process.

“The collaboration of insight and finance is increasingly commonplace within our organisation and the business has greatly benefited from being able to directly feed consumer research into the financial aspects of planning process.”

Elevate the value

Businesses invest millions of pounds in customer experience research, tracking measures such as Net Promoter Score and loyalty, with the ultimate aim of improving business performance,. However relatively little is invested in actually quantifying the financial value that excellent customer experience can deliver and little is understood about the true ROI behind customer experience initiatives.

Brand researchers need to invest more energy in linking the plethora of brand equity measures that are tracked back to sales performance, market share and economic brand valuation.

Chris Hall, head of insight at outdoor media owner JCDecaux, says: “It is important for us to demonstrate to our clients the effectiveness that investing in our media can deliver for their brands. This is not just in terms of immediate sales uplift but also in terms of longer term brand equity building. We work hard to develop new innovative research techniques that demonstrate the brand enhancing qualities of our portfolio across roadside, rail and retail environments.”

These are just some examples of where the industry is already starting to elevate the value of research by delivering insight that is one step closer to informing the financial decisions that our clients need to make. Capitalising on these opportunities will require us to embrace a broader, more commercially focused perspective and a greater willingness to think outside the box.

To realise these opportunities fully we need to acquire a broader range of skills sets from accountants to economists and ultimately we need to let go of our purist research mindsets and run with more pragmatic solutions. It might be more comfortable to provide ‘nice to know’ insight within our comfort levels, but being brave and thinking commercially takes insight to a different level and will help us bring back the respect we deserve.

Sam Gardner is a director at Boxclever