Trends and tribulations

Editor’s note: Louise Kroot is president of Louise Kroot Associates, a Sherman Oaks, Calif., research firm.

Dynamic discussions highlighted the industry roundtables held in Los Angeles in September during the American Marketing Association’s annual marketing research conference. These sessions were designed as a forum for industry professionals to discuss some of the most sweeping changes to impact the industry in its 100-year history. Sixteen professional moderators, led by the author, guided these groups, each one focused on a specific industry: consumer packaged goods (CPG), health services, financial services, automotive, high-tech and communications, and public policy, and groups that concentrated on issues facing the travel, leisure, entertainment and restaurant industries.

Competitors, industry veterans, conference speakers and newcomers to the marketing research industry sat elbow to elbow in these sessions, openly and energetically contributing to the discussions. Though many of the concerns relating to the marketing research community were repeated across all industries, others were much more industry-specific, as the following commentary reveals.

Industry changes

  • Reduced budgets: Budget squeezes - resulting in smaller research departments, fewer projects, and less money to implement research plans - are prevalent in all industries, but are particularly acute in the travel business. Downsizing of research departments and management turnover are disrupting long-term strategic thinking, as well as sacrificing quality. (“It’s hard to get our requests met.” “We need suppliers to cut costs, but vendors may be compromising quality.” “Our clients demand research that is ‘better, faster, cheaper’.” “We are doing more research in-house.” “We are now more reactive, than proactive.” “How long can we sustain a premium product?”)

Some blame the shift away from the research dollar to the need to generate new revenue sources, as evidenced by massive construction in the health care industry, and the development of new products, affiliates and partners in the travel arena.

Adding to the stress of reduced budgets, CPG researchers face the need for even more funds to cover additional segmentation requirements, necessary to better represent the rapid and simultaneous growth of several ethnic parts of the population. Similarly, automotive companies are confronting the need for more research because so many new models are being introduced.

  • Lack of corporate strategy: Marketing research tools have low credibility in too many companies. Often plagued with an “old school culture,” which sees no need for, or has a limited understanding of, the benefits of research, researchers have difficulty convincing those at the top, those in control of the purse strings, as well as brand management about the value of research. (“People defend their ‘belief’ systems, rather than being open-minded about research.” “They fail to see the big picture.” “Long-term strategic research is meaningful, but is harder to sell than tactical.” “It’s hard to get them to be innovative.”)

Poor decision-making experiences are frequent. Too often products are forced into the marketplace without the benefit of any research at all.

Even when research is conducted, decisions are frequently made either too early or too late in the process. (“Brand executives and upper management form and begin to act on hypotheses even before they receive the results of the research.” “Companies get bogged down with too many other issues to be able to act on the findings of the research in a timely manner.”) Some only want to hear the “good story,” and ignore unfavorable research results.

Various automotive companies face the additional problem of foreign cultures whose involvement can greatly slow down the entire process. Financial service companies have to deal with a very sluggish, conservative decision-making environment because of the extra caution required from the regulatory culture that characterizes this type of business.

  • Declining respondent cooperation: Diminishing respondent cooperation rates affect all industries. At a time when budgets are being squeezed, the cost of lower response rates is particularly crippling. In some industries, like health care and high-tech/communications, frequently used respondents are becoming “burnt out” and difficult to replace. (“Respondents have been over-sampled and over-researched.” “We are hitting the same respondents over and over.” “There is more competition for medical doctors among research companies, and the response rate from specialists is way down.”)
  • Time constraints: A demand for faster research results is most severe in the CPG, automotive and high-tech/communication categories. though other industries also face some of the rigors of needing immediate results. Researchers complain about a lack of time for productive kick-off meetings, inadequate time for clients to change objectives, and a failure to conduct research early enough in the product cycle to avoid having to make last-minute decisions. CPG companies are particularly affected by too little time allocated to handle the additional ethnic segments that are becoming necessary in their research design. For some, sign-offs take much longer than in the past, adding to the burden of shorter time cycles.
  • Legal restrictions: The Do Not Call program is expected to create additional obstacles for researchers, and legal departments have increased scrutiny regarding issues of ethics and privacy. Some companies rely on their sales forces to access customer data, while health services researchers have the complicated HIPAA regulations, which prevent them from generating customer patient lists for research purposes

Gaining management buy-in

Developing a better alliance with management is the most important solution offered by these research professionals. (“The top priority solution was the ‘total project concept,’ getting everyone to understand the parameters and goals right from the start.” “We need to get a champion in the executive office.”) Collaboration should include supplier partners, as well as upper management, marketing, and, where applicable, engineering. (“There should be an annual meeting where researchers and management meet to plan out the year’s research needs.” “We need to be consultative with our clients, not just order takers.”)

Applying the principles of marketing to the promotion of research is clearly necessary in companies where the corporate culture is research resistant. (“Treat it just like you would if your were going to market any other service entity.” “Become an internal evangelist for the role of research within your organization.” “Educate your clients.” ”Expand your role to become more than a researcher.”) Including action standards in the research plan will help all stakeholders buy into the process. The results of these efforts will be better, smarter decisions, less reactive and more proactive research, and research earlier rather than later in the process.

The most effective tool for developing management support for the research process is to demonstrate how the implementation of research findings will impact the bottom line. (“Use ROI to show clients the value of research.” “Have clients consider that it’s worth spending $30,000 to make sure that an upcoming expenditure of several million dollars is a sound decision.”)

Others champion the communication of anecdotes and success stores to support a research proposal, while some resort to “mini scare tactics,” diplomatically suggesting the kinds of negative consequences that might occur if the research was not conducted.

Methodology opportunities

The advent of online research is really a mixed blessing. On one hand, online research can deliver quantitative data faster and cheaper, and in a more convenient format. (“It gives us real-time data.” “It dispenses knowledge, and empowers people with information.” “It’s more resourceful and has forced executive teams to get to a decision point and make them.”) Online research also helps the researcher control individual stimuli shown to respondents, provides the use of a variety of multimedia options, is easier to draw samples of low-incidence population, and enables respondents to answer on their own time, in a non-intrusive setting.

On the other hand, the easy availability and do-it-yourself culture of online research provides non-research staff a convenient device to conduct ill-designed research on their own. (“Watch out! They can do their own conjoint analysis.”) Issues of privacy, spam, sampling limitations (respondents who are overused and/or not representative), and limited bandwidth are concerns that are yet to be resolved. Some client types want to use online whether it’s appropriate or not, just because it sounds cutting-edge.

Using qualitative techniques online is also debatable. Those who like this methodology are influenced by the potential for lower-cost research, and because it enables executives, from the comfort of their own offices, to hear the voice of the consumer. Some believe that the anonymity provided by online qualitative research encourages respondents to be more candid, though the lack of non-verbal gestures and facial expressions is a major trade-off. Nevertheless, in order to make sure that people remain engaged in the process, the researcher must conduct some sort of an exercise every few minutes, (e.g., voting).

New types of concept testing are desirable, namely one that could actually predict sales, and another that could present virtual online tours of a venue, useful in predicting casino or hotel visits.

Overcoming respondent resistance

In order to address declining cooperation rates, researchers believe that shorter, more enjoyable surveys, conducted by better-trained interviewers would help greatly. Some wish for research facilities to be redesigned to make the survey experience more stimulating.

Using custom panels, loyalty panels or customer advisory boards is another solution to help cope with the declining respondent cooperation rate, as well as locating low incidence respondents. (“Response rates are higher than without a panel, so over time, it will also reduce costs.”)

And finally, innovative incentives, like free anytime minutes from a wireless company, are helpful in obtaining cooperation, especially appropriate for the more educated, sophisticated respondent.

Next steps

Reaction from the roundtable participants strongly indicated that the time spent was valuable, and that more of these types of interactive sessions should be included in planning future conferences. Attendees appreciated the opportunity to interact with their colleagues, and felt encouraged with some of the important insights they were able to take away from the discussions.