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What’s happening to market research?

If you’ve ever been stopped in a shopping mall by someone with a clipboard, you’ve interacted with a market researcher trying to find out what you want so that companies can better market to you. Everywhere I look, I hear wise counsel to companies to focus more on customers, to get to know them better, to target them better, to understand them better. So, this must be the golden era for market research, right? Well, not exactly. Most companies I talk to are cutting market research budgets, many of them wielding even sharper knives for market research than for other areas on the chopping block in this down economy. It’s time to step back to see what’s happening to market research.

So, let’s add it up. Companies believe that they need market research more than ever, yet it is being cut even deeper than other things right now. What are the possibilities?

  • It’s just lip service. Perhaps everyone talks about market research, but nobody does anything about it. When the money is being doled out, maybe we don’t really value knowing about our customers as much as we say we do. This is certainly true at some companies, but I don’t find that most companies think that way.
  • Market research isn’t yielding enough customer insights. While possible, it seems odd that at the very time there is more interest that companies would suddenly lose faith in what has traditionally answered their questions. I do see companies that are more sophisticated than ever about market research, with top execs questioning statistical significance, question biases, and sample sizes, but I don’t think loss of faith explains what I am seeing.
  • There’s a cheaper way to get the insights. I’m putting my money on this explanation. And the Internet is the culprit, if you’re pining for larger market research budgets.

We see traditional market research moving to cheaper online venues. Those expensive survey takers that stopped you at the mall don’t seem as prevalent nowadays, when Survey Monkey can allow you to run surveys online for free.

Focus groups have largely moved online, too. Traditional focus groups cost thousands for a few hours of time from a few customers, but online customer panels cost considerably less, and they yield months of long-term deep interactions that focus groups could never approach. Just check out how many companies use Communispace as a way to gain insights from their customer communities.

But it’s more than traditional market research techniques moving online. I am watching the smartest companies do completely new things online, such as crowdsourcing product development instead of simply surveying what customers want. And there’s a wealth of data about how customers respond to marketing messages in Web analytics data–data that formerly required expensive focus groups and surveys.

And then there is social media. Many top companies are listening to the social media conversation and learning what customers think about them, for far less than what they paid for the traditional market research. [Full disclosure: I serve as Chief Strategist for Converseon, a social media listening and marketing agency.]

What’s interesting about all of these developments is that I see it as market research without the market researchers. Rarely is the market research team involved in crowdsourcing, Web metrics, or social media, and I am not sure why. Surely the skills market researchers have in framing questions and understanding statistics are applicable here. Certainly we’d like to know whether what we are learning is reliable when extrapolated to larger populations. Of course we’d want to know if the kinds of people we are gaining insights from are representative of all of our customers, even the ones who don’t go online so much.

But market researchers are usually absent from these conversations at most companies I work with. In fact, when I do get to interact with market researchers, I often see them recoil from social media (and these other chaotic environments) because they are more comfortable working under controlled conditions for their research. Too many market researchers think that their core competency is scientifically extracting insights from lab experiments, where the customers are the rats.

If you’re a market researcher, it’s time to wake up before your profession becomes extinct. The smartest market researchers I know are in the middle of all of these conversations at their company–sometime they are leading them.

Market researchers ought to be working side by side with Web analytics, CRM, and social media experts so that they branch out into really being the person with a statistical background that most understands customers, not someone cloistered inside controlled conditions. Unless market researchers step into these areas, social media will be the purview of marketers and PR folks, Web analytics will be taken over by CRM teams, and crowdsourcing will be controlled by R&D.

Although all of these groups have their own strong and needed perspectives to these problems, none of them can, on their own, distill the same insights that they can by working with market researchers. And for market researchers, the stakes couldn’t be higher. Things are moving quickly and market research is becoming marginalized.

Don’t let this happen to you and your company. If market researchers are becoming less and less important in your zeal to find customer insights, you’re making a big mistake. Market researchers must be part of the shift to customer insight gathering on the Internet, or you’ll lose out on their valuable perspective on what you learn.

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Mike Moran

Mike Moran is an expert in internet marketing, search technology, social media, text analytics, web personalization, and web metrics, who, as a Certified Speaking Professional, regularly makes speaking appearances. Mike’s previous appearances include keynote speaking appearances worldwide. Mike serves as a senior strategist for Converseon, an AI powered consumer intelligence technology and consulting firm. He is also a senior strategist for SoloSegment, a marketing automation software solutions and services firm. Mike also serves as a member of the Board of Directors of SEMPO. Mike spent 30 years at IBM, rising to Distinguished Engineer, an executive-level technical position. Mike held various roles in his IBM career, including eight years at IBM’s customer-facing website, ibm.com, most recently as the Manager of ibm.com Web Experience, where he led 65 information architects, web designers, webmasters, programmers, and technical architects around the world. Mike's newest book is Outside-In Marketing with world-renowned author James Mathewson. He is co-author of the best-selling Search Engine Marketing, Inc. (with fellow search marketing expert Bill Hunt), now in its Third Edition. Mike is also the author of the acclaimed internet marketing book, Do It Wrong Quickly: How the Web Changes the Old Marketing Rules, named one of best business books of 2007 by the Miami Herald. Mike founded and writes for Biznology® and writes regularly for other blogs. In addition to Mike’s broad technical background, he holds an Advanced Certificate in Market Management Practice from the Royal UK Charter Institute of Marketing and is a Visiting Lecturer at the University of Virginia’s Darden School of Business. He also teaches at Rutgers Business School. He is a Senior Fellow at the Society for New Communications Research. Mike worked at ibm.com from 1998 through 2006, pioneering IBM’s successful search marketing program. IBM’s website of over two million pages was a classic “big company” website that has traditionally been difficult to optimize for search marketing. Mike, working with Bill Hunt, developed a strategy for search engine marketing that works for any business, large or small. Moran and Hunt spearheaded IBM’s content improvement that has resulted in dramatic gains in traffic from Google and other internet portals.

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Discussion

  1. Avatar Wendy Scherer

    I’m thrilled that a colleague of mine sent me a link to your post! (And now, I’ll be a loyal reader, by the way)
    You raise some excellent points and I hope your readers take it to heart. (And I’m not just saying that because I’m a market researcher who is involved with social media.) Social media research should not replace traditional research without regard and social media research without someone who can confidently garner the implications and reliability of customer insights will not paint the picture companies need to make sound strategic decisions.

  2. Avatar Mike Moran

    That’s a great way to say it, Wendy. In the companies where market researchers are not involved, these new methods of garnering customer insights are replacing traditional market research rather than augmenting it, as they should.

  3. Avatar Diane Mensinger

    As a professional marketer, not a researcher, it amazes and amuses me to see the poor question construction that many companies are fielding. It seems that many are almost ‘push’ surveys to get people to respond to fit into a preconceived thesis.
    That said, companies relly need to understand the pros and cons of both internet and in-person interviewing.

  4. Avatar PowerPoint Templates

    The Internet has such a low barrier to entry, the risk is not significant. People think its a good idea the money investment is small why not try it. When you are risking big money, then market research is critical, when the investment is small its often worth the risk.

  5. Avatar marketing research

    Thanks, and you bring up a good point:Market research isn’t yielding enough customer insights. While possible, it seems odd that at the very time there is more interest that companies would suddenly lose faith in what has traditionally answered their questions. I do see companies that are more sophisticated than ever about market research, with top execs questioning statistical significance, question biases, and sample sizes, but I don’t think loss of faith explains what I am seeing.

  6. Avatar Mike Moran

    I think the problem is that we are expecting people to have faith in things rather than being able to show return on investment. Whenever you have a business people must believe in, you are just waiting for the next thing to come along that people believe in more.

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