Crisis and market research

Good Geoff Ramsey,  eMarketer‘s CEO published a post onto his society’s site: Why Now Is Not a Good Time to Slash Your Market Research Budget.

Geoff  mentions some recent researches, among corporate marketing directors; and the landscape is  “a precipitous drop in spending for overall media and advertising budgets“. According to ANA – US Association of National Advertisers – 77% of firms is going to cut their advertising budget. According to AdMedia Partners, only a quarter of marketers would be planning a growth in market research investments, an equal percentage schedules a reduction.  According to Duke University Fuqua School of Business, in 2009, MR investments will increase 1,8% only. Data has to be wisely “pondered”: 1,8% is an average between willingness to increase (3,7%) in B2C activities and willingness to reduce (2,9%) in B2B ones.

Data mentioned by Geoff Ramsey have reference to US context, but I think they could be transferred to European one and, surely, to Italian one – if we know how to feel pulse of the market. Historically, too, every critical “time” has gone hand in hand with immediate cut of communication and research “costs”. It could be translated  – inevitably – into an investment cut.

It stands to reason exactly in recession phases being able to acquire certain information could be anti-cyclical, not for the whole system, it’s sure, but for some companies. Strange as it may sound, built and correctly expressed information can make distinction, on the competition footing. I keep – in spite of everything – surprising myself facing requests for surveys which have the lone goal to “prove what market is already proving” when market’s or company’s or branch’s health is solid. And equally it escapes to me the meaning of research cut off (I don’t mean market research strictly) when a crisis explodes.

At the cost to sound “not uninterested” (Yep, just what we needed…  don’t care about our branch’s health), we dare a little vade mecum which we could entitle: How to buy research in a recession phase? 5 questions to ask a MR company. During recession, every invested Euro (dollar, yuan, peso, quetzal, dhiram…)  must have a “return” in terms of obtained information. I cross-refer to Geoff Ramsey’s post to answer to the question Why to buy MR in a recession phase…

1. I have a specific need. It’s not sure that I am be able to circumscribe it. Can you summerize it?

First contact (for a research project) requires two conditions which rarely occur together, and sometimes not even individually: a. the client is able to clarify which needs he had to solve with a research and b. MR company is able to understand those needs, interpret them on the basis of its experience and translate them in research goals (goals come always after needs understanding: if we have anything sure in this job is that Questions are more important than answers). “Make turnover grow” in some circumstances could mean “Loyalty reinforcing“, in anyone else “Loyalty creation“. The worst mistake – by a MR company – is pre-supposing a pre-built answer. It is very comfortable: every MR company has a set of good ready solutions. You have to expect a short paragraph in the project which  – as a preface – summarizes brightly: 1. acquired information during the breafing; 2. the needs you expressed or described and 3. the goals the research set itself therefore. This short paragraph can be considered pleonastic… but it isn’t so. I am not speaking of a simple “contractual value proposition” you can assert eventually. I am speaking of grasping and proving your research interlocutor had understood what you need exactly.

2. Which research goal are you proposing?

Every research has a  consultancy quid (big or small ad lib). It’s useless not to speak of  it. Let research goals open, let MR company propose them. Point at changes after first project issue, rather. Restricting the scope to “what married women like” probably won’t enable to save money.

3. Which kind of segmentaion will you offer?

I’ve never understood passion for socio-demo (north, south,…; male, female; age; qualifications;…) by several clients. When profits multiply and you’re able to sell ice lollies at North Pole, “women answers” or “Sardinians’ answer” don’t explain so much. Or, sometimes, they obtain that wonderful invention which seems to be discovered every 15 minutes:  the wheel. Correct answer you have to demand from a MR agency is: “We will use socio-demos as screening pattern and we are going to segment for…”: time budget in media consumption, technology equipment, leisure time spending mix, etc. etc. What I said it isn’t relevant only in quantitiative research topic (never mind for sample size).

4. May you propose two research modules and respective costs?

You have to consider that research cost lies heavy on “researcher” item: try to take advantage of capacities by whom has led and developed the survey.  Cutting “field” work (smaller sample size, smaller number of focus groups or in depth interview, etc. etc.) never involves a proportional cost reduction. Process data for 500 or 1000 respondents is perfectly cost uneslatic. Demanding discounts proportionally to the field work reduction gives only a result: it reduces attention and involvement by the researcher.

5. How do you recruit respondents/participants?

I don’t wanto to argue about methods validity.  We will have other chance to debate distinctions among face-to-face interviews, CATI, CAWI, focus groups with double moderation, ethnographic insights, mixed methodologies and so on…

We have a trouble (I mentioned in “How research provides its own ROI – Parte 1 – Le ricerche online“, from Makno’s site italian version): professionalism in respondents/participants. Sometimes they have profit aims (some techniques provide forms of  “incentive” and/or repay). Sometimes else they enjoy to give their opinion. Don’t misunderstand me: I’m speaking of proper aims but I’m afraid of distorsion they deal. Recruiting 64 peope for 8 focus groups is easy and quick (and dirty, of course), at the moment: I assure you we can find them in front of complex requisites (i.e.: 25-y.o. badminton fan), too. If your budget is limited, please don’t save money from recruiting but expect yourself  MR agency tried to reduce respondents’ professionalism. And ask your agency for a  recruitment technique disclosure in the project.

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