Editor's note: Bill Buchanan is a senior vice president of ASI Market Research, Barrington, Ill. He spent several years in the client service department of the Leo Burnett Company and also headed the marketing research department of The NutraSweet Company in his position as director of marketing services.
Do you work as a marketing research supplier? When a manufacturer or service company needs to know something about their market, are you one of the people they call? If a company's own research department wants to field a study, do they call you for a bid? If you fit those descriptions, you may want to rethink your career path. In fact, you future employment may be in jeopardy. Why?
I'm not predicting a major shake-out among marketing research companies. My opinion that research suppliers may be in trouble is based on three realities, all of which are not likely to change any time soon.
Reality number 1: Businesses of all types are cutting costs by letting people go.
If you haven't lived through a corporate downsizing exercise yet, give it time; you probably will. If you have, and you were one of the survivors, you probably noticed that staff positions were hit particularly hard. Production and sales personnel, those directly responsible for producing product and generating revenue, are typically more insulated from major head count reductions. Downsizing survivors in marketing research departments quickly discover the second reality:
Reality number 2: Management doesn't ask fewer questions even though there are fewer people to provide answers. They demand increased productivity from remaining employees.
Common sense says that if you significantly reduce the size of a research department, then some things need to change. Tasks of questionable value need to be eliminated. Information requests need to be screened and prioritized. Administrative tasks need to be streamlined. Common sense, right? Wrong! The same questions get asked. The same record keeping requirements exist. The information needs of the organization don't decrease. In fact, the need to build sales and profits, which precipitated the downsizing, may actually increase the number and types of information requests! The researchers who survived the downsizing find themselves buried in work. They even start wondering if surviving the downsizing was a blessing or a curse! They have more to do, less time to do it, and a desperation to perform well because they never know when the next downsizing announcement may be made. Their hope? Look to the outside for help.
Reality number 3: The nature of a supplier.
A supplier is defined as someone who furnishes/provides (a person, establishment, etc.) that which is lacking. Some suppliers wait for the phone to ring, others have salespeople out making calls and drumming up business. A good supplier is often thought to operate on the principle, "They call, we haul!" In the case of marketing research suppliers, some provide unique products or services not available elsewhere, others provide what are perceived as commodity services. But in everything I've said so far, the idea has revolved around the idea of a supplier. Therein lies the issue. I submit that the mindset of a typical supplier is inappropriate for today's marketplace.
So what's the answer?
Companies don't need suppliers, they need partners - whether they recognize it or not. A partner is a sharer or partaker, an associate. A partnership means there is a joint interest. Being a partner means more than delivering a high quality product or service in a timely, cost efficient manner. There are a number of new aspects to a partnership with a client:
1. Don't sit around waiting for the phone to ring, have as much "face to face" time with the client as possible. Establish some personal relationships as well as the business relationship. This is basic to sales, but how often is it really practiced?
2. Go beyond concern for what the client wants, be concerned about what the client needs. If the client fails, you fail!
3. Are there ways to deepen the business relationship? New ways to help the client? If the client succeeds, you succeed!
4. Building and maintaining business relationships takes a lot of time and effort. For this reason, there may be a quantity versus quality trade-off in dealing with clients. Staffing needs to allow a partnership to be built and maintained. Senior management of a service organization needs to understand what it takes to build a partnership with a client. They must understand changing marketplace realities.
Any relationship means different things to each person in that relationship. All the parties involved have unique needs and wants to be satisfied by the same relationship. Because my background revolves around advertising, I'll use that industry as an example for the partnering opportunities that exist today.
Copy research, for example
For 13 years I was in the client service department of a major advertising agency. Those who work with ad agencies often perceive the agency to have a "bunker" mentality. Why? The agency is quick to defend its work and clients often feel they're not being heard. The agency's creatives sometimes seem to be loose cannons; agency people are often seen as being highly political in the way they work with the client. They need to be! The agency's product is judged by subjective criteria by everyone involved, both by the client and within the agency. The agency is ultimately accountable for the sales results for the advertised product or service - results over which they have no direct control.
If that's not enough, the agency knows that when/if sales nosedive, the first fingers pointed will be in their direction. What the agencies don't want is a third party joining the advertising process late, grading their work, issuing opinions, and then disappearing into the night.
From the client's perspective, they internally may share many of the agency's problems. They are committing large sums of money with no quantitative understanding of the return they'll receive on the investment. The agency is always talking about the long-term value of advertising, but the client people are evaluated on short-term results. Each part of the client organization has its own opinions about what the advertising should be. Those creating the advertising are held accountable for sales, just like the agency. And like the agency, they don't have direct control. They have financial goals set by someone else, and like the agency they don't have direct control over sales. There's the sales force they work through, and of course there's always the competition. The client needs some objective criteria to justify their decisions and to help them reduce the risk associated with their decisions. From the client's perspective, some tool to help judge the agency's work, even if it may be an imperfect one, is better than no tool at all.
In addition to the client and the agency, there is the third leg of the stool, which is the advertising research company. It provides the client with information to help make advertising decisions less subjective. Whether the decisions are "better" is sometimes debated but the decisions are less subjectively driven. And to the client, that is critical. That is good business!
Copy test results always affect agencies, but too often, agencies don't make effective use of the learning. Clients perceive that if test results are good, the agency accepts congratulations and moves on. The agency is seen as buying into the results. When the results are poor, the agency seems to argue that the testing is somehow flawed. Agencies are often seen by clients as being hypocritical. They're not really hypocritical, they're simply focused on their goal.
Agencies tend to be very goal-oriented, and their goal is to get the copy they recommended on-air. If copy test results are not an obstacle, then they don't worry about them. If they are a problem, they try and explain the results away. ("It'll be fixed in production!"; or, "That methodology doesn't work for this type of advertising!")
As suppliers, copy testing companies have tended to be satisfied with the situation and accept alienation from the agency. As a result, this third leg of the stool has tended to make the whole system a bit wobbly.
The opportunity
Neither agencies nor clients typically have the internal research support they once did. When I headed the marketing research department of The NutraSweet Company, we perceived ourselves as understaffed and overworked - just like research departments everywhere. We wanted to form tighter partnerships with research companies, but found most of them were unprepared or unwilling to provide the level of service we needed or were willing to buy.
For copy testing companies, the opportunity is to become an advertising research partner. Join the process as early as possible. Don't just grade the agency's work, help find ways to make the advertising better. Feel at least partially responsible for the end result - the advertising that is aired. Recognize that advertising stems from more than the copy. Results involve (among many things) factors like the media plan and spending allocations between advertising and promotion programs. Advertising research companies should strive to build a partnership with their client and with their client's ad agency! Don't "disappear into the night" after the research project is completed.
A case history
Building partnerships requires much more than simply issuing a new mission statement. ASI Marketing Research, Inc., of which I am a senior vice president, is one research company in the process of forging closer partnerships with clients. Historically, ASI has focused on recall and persuasion testing for TV advertising. Forging closer client partnerships is requiring our company to reinvent itself.
In our case, we believed one way to build ties with clients would be to get involved earlier in the advertising development process. To do that, we recognized we needed a more diagnostic research tool. So when we were approached by a major ad agency, we evaluated and then bought the agency's proprietary, internal diagnostic copy testing system. We then married that approach with a creative diagnostic system used by our Entertainment Research Division to test movies, movie previews, and TV shows. The result is an advertising development tool called Creative Response Workshop Plus (CRW+).
With it, we get involved earlier and add more value to the advertising process. We feel it allows us to provide insights into how the advertising is being internalized by the audience and measure the strength of creative elements. CRW+ also creates an opportunity for us to forge closer relationships with the client's ad agency. Because the methodology was developed in part by an agency, its output is designed to be creative-friendly.
Another way we contribute to the advertising process is with a company unit called ASIRAS, ASI's Response Analysis Services, which can develop advertising response models that have demonstrated the ability to decompose and quantify sales impact for the various elements of a marketing program. That information is useful to the client, because how many times has a client asked its agency what sales impact it's getting from the advertising or what the impact of an alternative spending level or media mix would be?
Lastly, any relationship needs constant attention. Providing a range of research products is not enough; relationships are based on people. We are increasing our account people's focus on customer satisfaction. More important, ASI is striving to learn as much as possible about what superior service means to each client. Helping to identify what the client needs, and not simply supplying what they say they want, is only part of it. If the client senses you're putting their interests first, you will reap the rewards.
Is three a crowd?
While this article has talked about the copy research business, the opportunity to form deeper relationships exists in most research areas. Client experience is that few account people from research suppliers know their clients' businesses well enough to interpret data and make meaningful, actionable recommendations. Research suppliers think they do, but clients don't generally perceive it. It may mean wrenching change for a research supplier, but the opportunity to be a research partner exists!
The partnership between a client and its ad agency is widely recognized and talked about. If a research supplier inserts itself between those two, you can bet it gets real crowded real quickly. The solution is to partner with them both. Both the client and the agency need to receive actionable information from the research company. Agency research departments are lean, if they exist at all, and client research departments are often overwhelmed. Both groups will welcome meaningful assistance. The challenge is to provide it!