GRIT “Sneak Peek”: Trends in Business Outlook

Editor’s Note: The release of a new GRIT Report is always a major industry event, and the major report on Q3-Q4 2018 results is scheduled to be released mid-January.  In anticipation of the detailed findings, we thought we’d provide “sneak peeks” into several of the major sections. We have three such sneak peeks scheduled for the Blog this week. Today, we provide an overview of Business Outlook trends, written by Nelson Whipple. There is great richness in the data on the current state of play, and we urge you to spend time with the full report when it becomes available.

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Overall, the insights industry is optimistic at the moment, and about its future, and “healthy”, with most suppliers experiencing revenue increases and more buyers increasing spending.  There is a bit of “glass half-full/half-empty” news in these numbers though, as the number of suppliers experiencing growth is down slightly from prior waves, and there is a small uptick as well in buyers decreasing spending.

 

 

 

At the same time, the industry is aware of dark clouds that can bring hard rain: political turmoil, competitive threats from dissimilar challengers, uncertainty over what position to take on technology, whether to specialize or diversify, and the riskiness of having too many eggs in too few baskets, particularly when influential buyers’ budgets are in flux. More importantly, the gauntlet is still down regarding better, cheaper and faster, and everyone must respond.

Times seem to be hardest on the very largest and the very smallest players. Buyers with research budgets over $10M have decreased spend, and that ripples throughout the industry. At the other end of the spectrum, freelancers and suppliers with fewer than five employees also have seen revenue decrease; perhaps larger suppliers have gone after their work because competition is so intense in their space or DIY tools have made them less relevant. Or perhaps, like many smaller suppliers, they rely on a single, large client that isn’t producing and have few candidate replacements in the pipeline.

While DIY tools have been cited as a threat to suppliers’ business, automation does not appear to be cannibalizing jobs – at least not yet. Technology and staffing spending seem to follow revenue/spend trends, and those on the positive side of those trends tend to live and breathe growth strategy; apparently, they appreciate the value that technology-based and human resources bring to the table. Investing in technology while reducing staff seems to be an isolated phenomenon driven by companies with large budgets who are doing poorly. Some others view technology as a way to improve efficiency and allow them to work through an impossible backlog of projects. Such a scenario would improve their department’s standing in the company and likely result in more hires.

Finally, it is important to appreciate diversity in the industry. Buyers who have increased spend seem to appreciate a mix of traditional and new methodologies as long as they deliver the necessary value at an affordable cost. Suppliers who have increased revenue seem to believe that a broader portfolio of methods will make them more successful and don’t rely on a single source of data for their conclusions. The insights industry continues to support a broad portfolio of expertise, and each player must figure out how to maximize their strengths vis a vis “faster/cheaper” and the type of clients in their network. Some buyers may be partial to single sourcing while others may prefer a la carte. For some, the right conclusion will be to add capabilities; for others, it will be to hone their expertise and client development skills.