The Market Research Issue
There is a lot of hand-wringing in the market research industry. Whether you organize focus groups, provide consumer panels, or analyze brainwaves of people watching TV commercials, you have a feeling that someone is snapping at your heels.
On one flank, the wolf pack of automation has picked up the scent, with companies like Zappi and ResponseAI providing inexpensive access to consumer panels and surveys, sometimes on a self-serve basis.
On the other, large consultancies like McKinsey are building analytics teams and using internal and external data sets to optimize customer experience, pricing, and assortment (usually with a sizable price tag). A range of social listening tools scan and analyze online chatter to draw insights about brand health and other measures.
Our take: while there are real improvements in speed, cost, and analytical quality, there is still a lot of white space to use research insights to solve strategic problems. There are two main reasons:
1. Lipstick on a Pig. Even with an automated front end, consumer panels and surveys are a terrible substitute for reality. Automation may make certain market research faster and cheaper, but it doesn’t solve the underlying issue: panels and surveys ask respondents to answer “what if” in an environment that is essentially artificial.
2. 20/20 Hindsight. Analytics of existing data are a fantastic way to identify opportunities—we are big believers in using data science approaches to determine where to hunt. But they rarely deliver step-change breakthroughs—that sort of insight usually requires a dose of creativity and an ability to see around corners.
Testing actual strategy requires a cross-disciplinary combination of backward-looking analysis, strategic option development, visualization of solutions, and—most absent in today’s market research offerings—testing of options in real-life settings. White space, here we come…
It’s not like the market research industry isn’t trying; in fact, there is some cool stuff happening in behavioral economics—”nudge”-type marketing—and neuro technology. The latter often relies on attaching sensors to respondents’ scalps, which is slow, expensive, and not particularly scalable, but does yield some amazing results about emotion, engagement, and memory retention. This post is a useful overview of the latest techniques.
Short That Stock
If only market research firms could be…consulting firms? Yeah, we weren’t expecting that either, but apparently what ails the market research industry, according to the American Marketing Association, who presumably ought to know, is lack of insight, especially speedy insight. Our favorite quote: “Though no researcher wants to push out unvetted information, the length of time needed to digest market data is longer than the shelf life of much of its relevance.” Huh.