The market research industry has been hit hard by the rise of the digital consumer. With enterprises increasingly emphasizing a consumer-centric approach, their consumer insights teams are constantly pushed by the C-Suite to get data-driven insights in a very short period of time. This drives a greater need for agile research, which traditional market research firms are not set up to cater to. So, enterprises are turning to DIY technologies to collect their own data and conduct research. As a result, the global growth rate for the industry has remained flat at 2%, driven only by inflation. It’s evident that traditional leaders in this space are struggling to sustain and scale.
The market research firms that have been able to sustain, and in some cases, even showcase double-digit growth, are those that recognize the urgency of transformation. As those that are slow to evolve bleed faster each year, those that are managing to adapt and succeed are doing it in a few key ways:
It’s no longer enough for a firm to provide generic market research. The key to attracting customers is to figure out how to be unique in some way, usually by delivering a unique type of data, or by providing multi-source data or some type of unique technology. Successful firms are the ones that combine deep domain expertise in a given industry with a robust data inventory that isn’t available with others. Promising startups are now usually built on the premise of some niche capability, enabling them to find investors that can allow them to continue their journey.
Many larger firms that have become more specialized have done so through acquisitions. These organizations acquire a specialist firm so they can sustain their business and continue to attract new clients with a unique proposition. Stagwell Group, for example, bought the National Research Group from Nielsen in 2015 and revived its entertainment research specialty, and then this summer added to that by acquiring TV pilot testing assets from Nielsen as well.
Medium independent generalist MR firms are the ones that are struggling the most. They lack a niche, as well as the resources to acquire a firm that has one. They also tend to execute research operations in-house instead of using partners. This eats into their margin and limits the funds they can invest in R&D to stay unique and drive future growth.
Outsourcing non-core functions
This is how adaptive firms are staying nimble and focused only on what they do best. They use trusted partners to help with everything that falls outside of their core competency. This can include all sorts of research operations services, including data collection, data processing, project management, QA services, text analytics, data warehousing and reporting.
Many clients are moving research in-house as technology is making it easier to do it themselves, versus working with a research agency. Unless those clients see deep expertise, actionable insights and high value-add from their MR firm, they are likely to make this move. So it is critical for MR firms to make themselves indispensable by doubling down on their core competency. They should not dilute their focus by engaging in research operations, if the client can handle that part on their own anyway. End clients come to them for their research expertise, not their research operational capabilities.
Embracing new technologies
It used to be that research was considered a “nice-to-have.” But now, all business decisions are backed with data and research. Tech giants like Google and Amazon do loads of research at each stage of their product and services lifecycle. The new imperative is to move beyond traditional data collection and analysis methods. Every day, new technologies are emerging which can not only collect and analyze customer, employee and brand experiences, but also provide action and impact measurement based on the insights.
Firms that are slow to adopt new technologies will fall behind their customer needs and will experience a faster churn-rate in their customer count.
Delivering faster turnaround times
There is greater pressure now to offer products and services that are highly competitive in terms of both price and faster turnaround times. Even MR firms that are solving highly complex problems with deep domain expertise and unique data still need to offer greater speed and lower cost. In many cases, they’re doing this by building strategic partnerships with suppliers that can deliver things like technology infrastructure and expertise, flexible operating models, automation, and process-driven, efficient setup, as well as 24-7 setup and global setup.
Market research firms around the world, in all stages of growth, are getting stuck. Getting unstuck will mean delivering value faster, cheaper and more uniquely than ever before.