When asked about ROI for research I am conducting, I respond: ‘If you’re investing in information’ isn’t that the return’?
As a researcher, I often ponder how I can communicate the value of the insights I’m providing, or going to provide. But the concept of time and information is often trumped by that of cost. In my researcher-oriented mind, ROI does not happen overnight; sometimes it doesn’t happen next period, or next quarter, either. In some cases, you won’t even know if there is ROI.
Think about Gen Y and Millennial research that many companies, I presume, are investing in. Do we conduct this research to capture a younger dollar, or to understand their behaviors, attitudes, and perceptions now to predict how they will change our businesses in the future? You see, the problem isn’t so much ROI. Instead, the problem is that some research is not viewed as a strategy-building tool. Some people see research as a means to an end ‘ to solve an immediate problem. There are times when market research needs to be done today (or yesterday) to understand what is happening in the market ‘ to shed light on something unforeseeable. And that (in some cases) is okay. The ROI, in that case, should be fairly straight-forward ‘ provide the information needed to prevent [insert business problem here] from [a: continuing; or b: happening again] and BAM! There’s your return.
ROI in market research is complicated. Sometimes, proving your research was ‘worth the money’ (I think all new information is ‘worth the money,’ but I might be biased) is not only necessary, but mandatory. In that case, there are a few ways you can spin this:
- 1. Did you know have this information before? Even if it’s not the answer they are/were looking for, you are probably providing information that was lurking in the category of ‘unknown.’ In that case, new knowledge is worth every penny.
- 2. No new insight is still meaningful. For you analysts out there ‘ even if your test doesn’t return a difference between groups, or it feels like you don’t have anything to report ‘ that is a finding!
- 3. Can it help build strategy? I’m using my consumer insight experience here, but if I can learn even the slightest amount of information about a segment, a market, or a store, I can provide someone information that will help them make a strategic decision.
- 4. ‘Return’ is in the eye of the beholder. Use with caution.
The main premise behind market research is to protect the bottom line. We are providing information to help key stakeholders make decisions that are likely to effect the business. Isn’t that a return in itself? Maybe. Maybe not. You’ll learn a whole lot more about ROI and measurement when you attend The Market Research Event this November in Orlando, Florida!
Garrett McGuire (@GJMcGuire) is a Consumer Insights Analyst for a major retailer. His areas of focus are advertising research, brand equity, and providing consumer insights for many marketing initiatives. Prior to his current position, he was a graduate student at Michigan State University where he began his blog, “The Journal of a mAD Man,” that explains the theories and methods of advertising.