Freemium and market research

"The freemium business model works by offering basic services for free, while charging a premium for advanced or special features" (Wikipedia).   By letting the basic service go for free  we let people use, taste and experience the brand,  turn them into fans and then trade them up to premium service. Skype, Second life or the latest albums of Prince and Radiohead are the most famous examples of freemium.  I know quite a few people who traded up to premium in case of Radiohead latest album, buying the £40 pack, containing the CD, vinyl and artworks...

What is the £40 unexpected premium in market research? It is easier to define the basic service first. Data, charts, even glossy PowerPoint charts are the basic things. Data are becoming a commodity and market research should make data available now when there is still interest in it.  Data should be free or available at a low cost. 

The basic in market research industry still cost a lot though.  Market research is still growing mainly through the sales of commodities - data, charts, cross-tabs, benchmarks and focus groups.  Similar to tobacco companies, the traditional market research is cashing on ignorance of its consumers: some of the old research methods are best sellers in developing markets such as Eastern Europe where the confidence and expertise of clients is low.

Market research has re-branded itself in recent years  and market researchers became insight managers - they promised to gather insight, transmit knowledge and educate their clients. If we had succeeded in this transformation there would be less market research and more educated
clients acting on gut feel. Isn't the true goal of market research/market insight to obliterate data gathering, to throw it away like a person with broken leg throws away crutches when the leg is heeled? Well, the crutches are not flying away as yet.

It is not for lack of intelligence in the market research industry.  There is lots of great thinking and really interesting papers talking about the need to understand emotions and metaphors, about the unconsciousness, neuroscience or anthropology.  I read these papers with interest until the almost inevitable anticlimax (it always comes at the end) when this great thinking is usually transformed into something very small, into implications and execution for market research. The results are (usually)  re-dressed but still the old and mundane ways of data gathering,  multiple-choice questions with pictures or photos or  scales of different colors.  These are pretty good ways for engaging  consumers in filling the questionnaires but they don't seem to be worth the great efforts.

This approach (great thinking, mundane executions) often works for the research buyer.  We, on the client side, can boost our image of "progressive researchers" by buying the latest research gadget that is just the old mechanistic test re-dressed to look cool... I don't think that there is a need to radically innovate ad tests, concept tests etc. - they are good enough (meaning not that good at all)  for what they are designed for, that is, to help us in case our judgment is failing us and to be thrown away when we know more.  It is the  basic of market research and it should go free (OK, it should be cheaper, one should be able to do such test in a couple of days for a couple of hundred euros).   

What is the premium then, the £40 goodie bag? The junior researcher sent by the senior researcher to the client to read from a shadow on the wall that 35% is more than 20%? Nope. The reports from four focus groups that always mysteriously fit to 50 slides? I don't think so.

I talked about this over a coffee with John Kearon a couple of months ago.  "Meaning," said John, "meaning is the £40 goodie bag".  Meaning, understanding of people, products, brands and the  way people, products and brands interact is the premium.  It sounds obvious because so much lip service has been paid to it but the money is still elsewhere - with the basics.

Things are changing, even in market research.  Those of us who have seen one (or two) political systems crumbling down in our lifetime can't be fooled by talk about "growth and great opportunities," such talk is often masking  fear, agony and the beginning of an end .  Market research will change radically. The global market research agencies of the future  - Google, Facebook, MySpace, Twitter - will take care of the data. 

The network of creative experts will take care of the meaning.

Comments

[Walter Schwabe]

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[Tomas Hrivnak]

Jaroslave, it's refreshing to read your unwaning basso continuo about the advent of a new paradigm in marketing research. Again and again, I see your argument proven right in my day-to-day consulting practice. Also, I see clients who aren't happy with the "50-slide report from the qual" anymore. Still, they don't have the time and the tools to reflect on the changing landscape of knowledge production in their field, so they take refuge in the old paradigm.

[Steve]

Hi Tomas. The big question is whether 100 page report is better? I am not sure. Quite often I think 1-page summary is worth more than 100-200 page report full of our intelectual constructs. Of course, depends on the audience.

Market researchers tend to blame all others around. Let's be realistic: We are not the centre of the universe.

My feeling is this is not about reports. It's about the appropriate set of tools that deliver the right and needed message in the right moment, when it's really needed. We realy too much on tools. Isn't it about understanding when, how and in what form the message needs to be sent. We often believe that our work will be done by magic tools. Isn't it about knowing and disseminating right info at the right moment?

[Jaroslav Cír]

Hi Steve, Agree completely. To me, it is exactly about knowing...mostly knowing whom to ask (this is becoming easier with the Internet) and how to translate information from different sources into a meaningful idea.