Merrill Dubrow of M/A/R/C Research presented at the UGA’s 30th anniversary MMR celebration in Athens, Georgia, on Monday. “The most important 5 years in the history of market research is upon us,” Merrill said. “We’re not as relevant as we want to be. Everybody is questioning how we do things, how we conduct research, how often we are right. This is a huge wake-up call for the industry.”
Unfortunately, too often senior leadership doesn’t do their research: “too often a ‘shoot first, ask questions later’ approach can lead to no research being done at all.” As an example, Merrill highlighted Netflix: Netflix lost 800,000 customers in the 30 days after their price increase, in what MSN calls one of the biggest business blunders of all time. In a letter of explanation to investors, Reed Hastings, the CEO, wrote [emphasis added]:
$7.99 for unlimited streaming and $7.99 for unlimited DVD are both very aggressive low prices, relative to competition and to the value of the services, and they are the right place for Netflix to be in the long term. What we misjudged was how quickly to move there. We compounded the problem with our lack of explanation about the rising cost of the expansion of streaming content and steady DVD costs, so that … many perceived us as greedy. Finally, we announced and then retracted a separate brand for DVD. While this branding incident further dented our reputation, and caused a temporary cancellation surge, compared to our price change, its impact was relatively minor.
Merrill showed this letter and highlighted all the types of market research that could have helped Netflix react better:
- Communications research
- Pricing research
- Forecasting research
- Concept testing
As bad as executive teams that do no research, to Merrill’s mind, are the teams that rely only on Do It Yourself research. “Yes, they have easy access to customers to survey, and with DIY they can save money and can move fast. But they will make mistakes. They need us. Research has to be more than just a pile of data. We have to answer these questions for our clients: What does it mean? What do I do about it? How do I implement?”
Social media market research is the next form of DIY research: “web scraping is a new toy in the toy box – it allows clients to get close to their customers.” But automated sentiment tracking requires hard work to get right. “How does your platform determine sentiment? Track specific keywords or are you reading terms in context? What does your platform do with results that are unclassified vs. results that are truly neutral? How do you score conversations that have conflicting sentiment inside a single result?” Merrill asked. “When the dust settles, social media won’t be a replacement but an addition to your current research programs.”
What can the market research industry expect in the future?
- As corporate research departments shrink in size, clients will demand more of suppliers.
- Clients will reduce the number of research partners they do business with, giving each partner a greater share of a growing budget.
- Research partners need to understand their clients’ businesses from the start of projects, with no time for a learning curve.
- Database analytics is a growth area, with clients searching for key insights. Currently this is done in-house but there is an opportunity for strategic partners to take this on.
- Geotargeting is in its infancy: “Proximity does not equal receptivity – to get this right, you need a balance. This will be a big challenge.”
- Today’s social media is but a hint of things to come. “Embracing Big Brother will be a slow process but the future is ‘Big Brother on steroids’ – everything you do, everything you say, everything you buy, everywhere you go is being monitored.”
Mike Saxon of Harris Interactive has said, “Good marketing is successful at reaching people when they are most interested in talking to you.” Merrill’s corollary is: “Good research is successful at reaching people when they are most interested in talking to you.”