OPINION18 October 2012

The commercial imperative

Opinion

If market researchers are going to win back the respect that the 2011 GRIT report claims they’ve lost, they need to shift their focus from methodology to commercial applicability, says Boxclever director Sam Gardner.

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

5 Comments

8 years ago

Agree with almost everything said here. One question I have is: what can Agencies deliver ie outside of a clientside organisation, and what should be simply taken in-house clientside? Expecting an Agency to deliver - like a "consultant" - is a big ask, is a reasonable ask? Management consultants are invariably hired by CEOs, or Board Level, MR agencies I would say very much less so. This gives a) different remit and b) different access. So: is this the right mountain to climb? As a clientside MR person, I see a huge gap to be bridged (excuse mixed geographical metaphors)

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8 years ago

I think it's imperative that researchers have the courage in their convictions to deliver commercial insights, however, that's assuming that clients are prepared to share their organisational information. In my experience, disciplines are often separated until the point of delivery when someone in finance/data/sales pipes up to 'disprove' research findings with known data sometimes undermining the delivery and highlighting disrespect. How we as researchers change this is the future is down to how we take the brief and the client relationships we build. We need to be considered partners rather than just suppliers.

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8 years ago

I agree. But it's wrong to assume that other professional services like management consultancy, law, accountancy etc are any better than research at solving the challenge of being technically solid whilst adding commercial value at the same time. Take a look at the Financial Times "Effective Client-Adviser Relationships 2012". Clients are generally far less satisfied with basics of good client service and added value than consultancy and legal agencies perceive they are delivering. So let's not do the age old habit of apologising for being researchers and feeling second best to "consultants". We are not. Consultants have exactly the same commercial challenges and perceived shortfalls -just different technical skills. And of note is that the Financial Times chose a research route to document the evidence for consultants and lawyers and recommend some commercial solutions.

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8 years ago

Totally agree with Lisa. More often than not I'm very willing to share any commercial data that is available with our (preferred) agencies to ensure we get the most out of any projects we commission. Unless you consider your agencies partners the research just won't work as hard as it has the potential to.

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8 years ago

A massive barrier is the glaring lack of interest in and knowledge of business in its own right in many market researchers at many levels. On the client side I've had the supposed agency 'experts' in my field unaware of really major industry developments in my industry. Research Execs/Managers/ADs/higher? have very, very poor understanding of how buinesses work. To find out, those in an agency go and ask everyone in your team right now what CRM is and why and how research should be part of a CRM strategy? You'll be appalled I reckon. We need to start getting our heads out of the sand and learning about business. The MRS should have modules on this as should all agencies grduate training. If not we face further marginalisation as 'the survey people'. In the world of Big Data it's absolutely imperative that we know how buiness get their numbers, what numbers they get, why and what they do with them and all their BI (and I include research in this).

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