Tag Archives: roi for market research

What if we were paid for clients’ Return On Insight?

Last week I dreamt an unusual dream: I landed up in market-research-future-land…  

The market research world
there had changed, everything was different. Much of the
dream didn’t make pretty much sense to me from today’s perspective. 
But one part of the dream I had to think
about a little bit longer:
Like
in today’s time ROI was one of the key parameters for the assessment and classification of success. At least because of this
interesting post it becomes clear that it
is not always easy
to determine ROI as return on investment for market research
services. But in my
dream’s market-research-future-land however
much more research activities were rated
by clients on the basis of ROI
considerations. 
How could that be?  
How did they resolve the problem of a
clear definition and inter-individual clarity of what
ROI means?
It didn’t last long until I
realized that ROI wasn’t meant
as Return On Investment but
as Return On Insight. What had happened?
 
Central changes in the market research industry, which could be slightly observed and forefelt today, had been manifested in new
concrete requirements and business areas.

Market
research’s clients were no longer willing to pay for (high) expensive and highly specialized external
service providers and service units.
Shortage of information about markets
and market participants became increasingly smaller, the value of the complex gathering and
surveying of this information declined
as rapidly as continuously

Most of the
information and the most important parts of it for the companies were easily
accessible via intelligent social media
monitoring
approaches and progress in the DIY market research ‘ without a large investment. The MR-agencies, which had focused on the
information gathering, were caught in a negative relevance swirl and thereby
lost income until they lost all of their justification they once had.  
Quality, efficiency, methodology and last but
not least price had been arguments
in which the MR-agencies did not differ a lot from each other. 
Consequently, the investment, which the
purchasers of market research have issued
to the agencies for the collection of data and information, had become vanishingly small.

Nevertheless,
the industry had not disappeared from earth, but it had changed significantly. Insight
became the central proof to evaluate the performance of market
research. The generation of insights
had detached itself from the value of data gathering, this was
already re-integrated within the
organization of commissioning companies. To
connect relevance and significance to existing data and results had become the
most important competence, and clients paid a lot for it and loved to do so.

What I especially liked about market-research-future-land
was the fact that clients included Return On Insight as a flexible
component into their pay
. Only those agencies, that had been able to provide
insights that were able to influence the
client companies’ success in a positive way, were also paid with the flexible part
of the fee.
I’m sure
that Return On Insight for market research is as difficult to be determined as
Return On Invest. But I’m also sure that the assessment of our performance by our
clients via Return On Insight is trend-setting. For this we would be forced to:
- give up
our silo-thinking,  
- deal with
marketing and advertising in a more extensive way
- be less of craftsmanship and more to believe
in relevance and
- ultimately be prepared for the future

We
ourselves have not yet tried to
agree with the client about a flexible part of our fee, depending
on the quality of the Return on Insights
we deliver. But we are thinking about it, and who knows, maybe it will happen soon that we are working with one of our clients on
such a trend-setting model.
I’m curious how ROI will be discussed at The Market Research Event in Florida. IIR, USA,
the conference organizers have put it on the agenda.

About the author: Christian D??ssel is blogging about market research in German language here and here.
After having worked for TNS, TBWA and other strategy and market
research agencies he now holds the position of Senior Research Director
at MM-Eye in Hamburg / Germany with special responsibilities for MM-Eye’s new media and online research approaches.

Communicating Research “ROI”

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. 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. 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. 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. 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.

Maximizing the ROI of Market Research

Browsing through the B2B International Marketing Blog I came across their new white paper Maximizing the ROI of Market Research. The white paper goes over how to maximize ROI of market research, by demonstrating:

the role of market research in business decision-making
how to measure the ROI of market research
which types of research will generate the greatest ROI

This is an informative piece; take a couple of minutes to read here.

Measuring ROI for Market Research

According to Nick Hague, 74% of Pharma companies do not calculate their ROI for market research. Of that 74%, 39% don’t do any sort of performance measurement and the others rely on the satisfaction levels of their internal clients for research. Most of the companies believe that the more general the market research objective is, the harder it is to calculate the ROI for the market research.

What do you think about this? One of the major reasons Pharma companies don’t do market research is because the fact that market research comes so early in the chain of events leading to a project launch ‘ it is far removed from the end result. What do you think? Do you agree with this?