Market Research – Who’s Asking?

18 October 2013

The market research business seems to be in the middle of one of its periodic periods of self-flagellation. They’re right to be self-critical; their relevance, indeed their future existence, at least in their current guise does look more than a bit dodgy.

It’s always surprising when a group of professionals engaged in any form of activity fail to apply the same principles to their own business as they sell to the paying customers. Practice what you preach isn’t a bad maxim. I wonder when the market research industry last asked top managers at their customers what they require to help them make better business decisions.

Earlier this month Jan Hofmeyr gave a paper at a market research event in London in which he questioned the whole future of market research. Hofmeyr is a South African whose LinkedIn profile has him working for TNS as well as for a business called IntellectionSoftware. Clearly he has something to sell; this isn’t the place to discuss the specific pros and cons of his ideas. But what is interesting is the reaction from the MR industry.

Ray Pointer, a respected market research blogger and commentator was in the room to witness Hofmeyr’s presentation. He reports: “Most people in the room showed no reaction to Jan saying they may not have a job within a year or two. Did they not believe him, not understand him, or not really listen?”

Ray summarises: “The existing model of market research, in particular the large trackers, is broken. It is too slow, too expensive, and not sufficiently useful. Not many people would argue with this point of view.” 

It’s the last sentence that struck me. I happen to agree that a very large part of the existing market research model is broken. Yet many people spend a great deal of money doing their best to prove the opposite. Is MR truly broken?

As happens in so many service sectors, market research seems to think it exists to satisfy itself as opposed to trying to serve the needs of its customers. It may be unpalatable to the many who toil away in the large MR organisations but what they do long ago stopped being of interest or indeed of relevance to their clients’ top managements. Increasingly the output of the large agencies very largely exists to satisfy client research specialists – themselves a fast disappearing breed. The whole thing has become too cosy, too self-serving, too obsessed with techniques, too backward looking.

Properly applied market research is a strategic tool that can deliver great value to company boards. It can indeed bring the voice of the consumer into the board-room. But over the years the industry has atrophied. Managers have hired technicians in their own image; large agencies have sold the same old stuff, maybe occasionally in new clothes but basically the same old stuff. Most senior managers in client companies have long stopped believing that the MR agencies are really interested in their business. What they get (or rather they don’t because they don’t have time) is another huge Powerpoint deck. What they don’t get is genuine insight of actionable interest to their business.

Now, I know that there are some talented people in market research. I know that there are some young companies with great ideas. But as with any industry it’s the huge market leaders who define the sector. If the existing model is truly broken then one or two of these will fail spectacularly. Only then might the others take notice.