It is difficult to decide just how critical the current situation is in which market research finds itself. The larger agencies seem to be having the hardest time in the recession, in large part because they have a comparatively inflexible approach to market research. Smaller outfits are having more success in the downturn as they are able to flex with the demands of the market.
It’s telling that RSM’s recent State of the Market Research industry report highlights a key factor, which in my mind has made the effects of the recession much worse for some agencies. This is a failure to provide innovative research solutions. Not only has this exacerbated the credit crunch, I think it has also contributed to a tarnishing of research’s reputation in the eyes of decision-makers.
Larger agencies have fallen into a ‘process trap’ of using generic methodologies for disparate problems. While this has helped them cut costs in the past, it also means that the quality of the research declines. One of the easiest ‘process’ methods is online research; which has been held up as almost a scapegoat for the recession. But as the RSM’s report suggests, the problem actually stems from how online research is implemented. Not enough consideration goes into core issues such as correct sampling, low response rates and research design. These are factors that shape any methodology and must be given due care and attention.
Resolving issues such as low response rate or sampling error can result in the creation of a bespoke, tailored research solution. But this does not necessarily fit within the ‘process’ business model of larger agencies. Smaller agencies are better disposed to select the most appropriate methodology and approach for each project. Indeed in the last six months DVL Smith has embraced mixed-mode research, landscape analyses and competitor communication audits as methodologies and outputs have ranged from customer choice funnels and interactive DVD commentaries to creative workshop discussions and traditional presentations.
Smaller agencies can offer added value consultative input on key business issues whilst side stepping the now crippling overheads brought on by having big fieldwork machines to feed and a costly infrastructure to maintain. Thus from the smaller agency standpoint there remains a demand for our services which do more than simply report the data.
At its core research agencies in the credit crunch, large and small, are trying to cope with increasing client expectations against a backdrop of falling relative revenue. This has resulted in a preoccupation with online due to its comparatively cheap cost. However research agencies need to have the flexibility to look outside traditional methods to solve the problem of the credit crunch. However perhaps the most important area for clients and agencies to focus on is training and skills development, in order to learn and advance more holistic and solution-driven, rather than process-driven, approaches to research.
The way to survive the downturn, and brush off any blemishes to the industry’s image, is to invest in both training and flexibility. More than ever we need Skills Development programmes in place to help newcomers to the industry make sense of the plethora of information sources now available and the flexibility to foster creative research solutions in the face of budget cuts and increasing client demand for innovative results.
Patrick Young
Tags: bespoke solutions, credit crunch, DVL Smith, insight consultancy, large agencies, Market Research, Patrick Young, process, process traps, recession, RSM, skills development, small agencies
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