Post by Neil Gains, the founder of TapestryWorks, based in Singapore.
What is the single biggest threat to market research?
Data represents the existing business model of large multinational research companies who make money by selling as many interviews/surveys/data points as possible for as high a CPI (cost per interview) as possible.
Data also represents a huge part of the future of market research. While “big data” is an opportunity to extract value from the ever-increasing flow of data from businesses and from the multiple devices that we all use at home and as we go about the world, this is also a huge threat. It’s a threat for market research companies and businesses, most of whom do not have the skill set to manage and analyze large data sets. More importantly, it’s a threat to the talent in the industry. As the pool of data grows every year, it becomes more and more important to have the thinking skills to ask the right questions, and connect different information sources together. This is not a skill that can be automated.
And finally data represents the focus of much of market research on “measuring to manage”. By definition, most large-scale data collection exercises can only look back at the past and attempt to explain what has already happened. However, the increasing need of business is to look forward and either predict the future or create it.
So the traditional data driven model of market research is not only being broken as a business model, by the provision of cheap or (virtually) free sample, but also by the increasing importance of using business insight to drive innovation. In a world where the brand and product cycle becomes faster and faster, it is less and less important to look back and more and more important to move forward.
The opportunity for market research is clear. Whatever happens to the business of sample and data collection, there will (or should) always be a need to understand customers. The business of market research is the business of helping other businesses to change the behavior of customers.
And this is where perhaps the biggest disruptions are happening for market research. Market research innovation has focused on technology and new ‘toys’, with less emphasis on changing the fundamentals of asking questions. The debate has been about how you translate a 30-minute survey to mobile phones, rather than asking whether it makes sense to ask questions at all. And we should be asking such questions of the industry, because the evidence of the behavioral sciences on the reliability of direct question approaches is very clear. The old models don’t work.
Looking from the client perspective, businesses increasingly need to use customer understanding to drive a constant stream of ideas and innovations to keep ahead of their competitors. This need can’t wait for data to be collected, analyzed and presented, but has to be a constantly evolving interaction between businesses and their customers to co-create the future.
More and more, businesses need to synthesize data across multiple sources, use customer understanding to drive change and remain agile enough to respond to a rapidly changing marketplace.
The future of market research is not in data. Or insights. The opportunity is to understand behavior and use that understanding to help clients create their future.
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