The Boston Consulting Group released an excellent report on the state of client-side (in house) market research departments. You can read it all here.
Highlights:
1. Only 35% of executives describe their in-house MR function as “best in class.” (see page 4)
2. Although corporations should strive to move their MR departments from “order takers” to a “source of competitive advantage”, “almost 90% of the companies…follow a more traditional approach to market research” (Translation: 90% are stuck in “order taker” mode.) (see page 4)
3. “On average, only 20 to 35 percent of a company’s market-research budget is devoted to strategic studies.” (see page 5)
4. There is a CLEAR need for what I have described as “Insight Management” – getting the most out of past research and mining it for synthesized insights. From the report: “Money is spent on research reports that languish on dusty shelves because the data rarely yield actionable plans. Many companies accumulate such a quantity of research and data that quality is inevitably elusive, each study providing a limited, tactical perspective on the consumer, with little integration of synthesis.” (see page 6)
5. Answering the “So What?” Question. While 73% of MR staff said they consistently answer the question “so what?” about the data they provide, only 34% of the business staff thought they closed the loop and answered this question. (see page 14)
6. Tactical, Not Strategic. Unfortunately, 59% of market researchers agree with the statement “we spend the majority of consumer insight time and effort on decisions with near-term impact.” This means that MR departments are completing numerous small studies and not given the time to explore the bigger picture. This also creates a low status cul-de-sac for MR departments as it is difficult to have solid strategic input when tactical, short term studies are the focus. (see #3 above)
7. The Rise of Polymaths. Interestingly, the report suggests that a desired “strategic foresight organization” (the final, 4th phase of an MR department’s evolution) will employ a more diverse range of researchers from statistics, anthropology, sociology, marketing etc.
In its entirety the BCG report paints a fairly stark picture of the current situation. It is true that market research needs to evolve, but corporate cultures will need to support this evolution as well.
Thanks for linking to this Robert; good stuff. One of the themes we heard clearly in RIT 2009 was a disconnect between what client-side researchers need from suppliers, and what we THINK they need from us.
The challenge is that while we can clearly see that our value prop must change in order to earn a seat at the table, our clients are fighting a similar battle for visibility and in many cases are losing. Since we are a service industry, we have to meet the needs of our clients, and our clients are being held back often by limits within their corporate culture. Quite a conundrum, eh?
Of course, this is not true for all client-side researchers, and we’ve been lucky ourselves to have a great group of clients who’s value is unquestioned within their organizations and receive an immense amount of respect. That said, I think they are a minority overall, and it will take the leadership of key organizations to help shift the rest. We need someone like a Jack Welch to do for client side research practice what Jack did for business management.
Lacking a visionary leader on the client side, it will fall upon suppliers to develop the needed resources and culture to help prove the point to clients that research is far more than tactical surveys and focus groups, and is instead a vital strategic tool that can be used to map the past, present, and future in order to maximize the probability of success for our clients.
Thank you for the thoughtful response Leonard.
Part of the answer seems to be about “proving the value of MR.” We see this clearly in Ian Lewis’ piece in Quirk’s this month and also a piece titled “Show Them and Tell Them” in the same issue.
I think the industry as a whole needs to develop more case studies. I also think we need to take “victory laps” where we can in order to drive home the value.
One question I keep asking myself is whether we as an industry are listening to our buyer?
Sure, we survey and focus group and segment our target consumers, but do we survey our clients themselves after each project? I would REALLY like to see that data in an industry survey. I think we need this kind of candid feedback and data I’ve seen suggests that the simple act of soliciting this feedback would improve perceptions of the end product.
excellent post.