Perfect Crowd

The Innovation Trap

I have written the "Innovation trap" as an article for the October issue of the  Research World .  I received a number of  emails from people (agency and client side) who read it and who are also tired by the frentic (and usually pointless) search for new research methodologies.  "However", asks one of the emails, "where is the money in pure "consumer understanding?"  Great question. I am thinking about it, discussing it with people around me.  What do you think?  

Meanwhile, here is the article:

Researchers need to focus on understanding people instead of constantly inventing ‘new’ methodologies.

 I have spent the last ten years on the client side, where innovation and growth go hand-in-hand. Unilever or any other manufacturer innovates in order to grow its brand’s share, turnover and profit. The research industry has learned from its clients and has adopted this model: it measures its growth in value terms and  attributes a large portion of its growth to innovation of market research techniques.

 If innovation is at the heart of the research business, we should all frantically search for new ways of doing research. It is a seductive proposition for any creative researcher. However, I believe that the search for research innovations is a dangerous trap into which most of us have fallen.

 Market research is about understanding people and why they do what they do. Unfortunately, typical innovations in research obscure this understanding because they generate growth through developing research tools that can be sold quickly and in great volume. Again, it is exactly what the manufacturer does when selling its innovations.

 For instance, we might develop a new toothbrush designed for brushing the tongue. We know that the consumer might not have a genuine need for tongue brushing but we are smart enough to create the need. Rather than selling a product we are selling a myth.

 The great myth

What is the myth that market research sells to its consumers – the research buyers? The key myth is that of certainty and control over a world that is completely chaotic and unpredictable. Fear of the chaos out there has forced us – on the client side – into a make-believe world of benchmarks, persuasion scores and scales designed to measure emotions (the latest hype). We have subjected consumers to our reality of tongue-brushing while we are ourselves subjected to the reality of the major research agencies.

 A few years ago, the market research function on the client side tried to break free from the prison of benchmarks and scales. It re-branded itself and market researchers became insight managers. We promised to gather insight, transmit knowledge and educate our clients. If we had succeeded in this transformation, there would be less market research and more educated clients acting on gut feelings. The growth of the research industry would have halted as a result.

 Instead, the industry is thriving and its growth signifies our failure on the client side to listen to our intuition, take risks and come up with truly disruptive product innovation that would genuinely surprise and delight consumers.

 True research is about understanding people. And genuine understanding of people comes from years of learning, experience and true intuition. It comes down to talented individuals who are semioticians, ethnographers, and great qualitative researchers. These are the people whose insights add tremendous value to the business and who are able to energise and guide clients.

 I have a lot of respect for people who have established small agencies to fight the big players. The problem is that they soon adopt the structures of the large agencies and start their own frantic search for fast-moving research products. This seems to be the only way for a research agency to grow in size: they create the need for a new, high-tech, silver-methodology that will deliver pre-packaged ideas for innovations to clients' desktops.

 It used to be hard to challenge the agency system as agencies owned the necessary technical tools. Then came the internet revolution and today the tools that researchers need are either already out there or are being developed – not by research agencies but by the likes of Google, Facebook or Twitter.

 Because of this, there is no need for new innovative research methodologies. The true job to be done consists of unlearning, of throwing the obsolete research tool sets away. Instead of building new methodologies, we should build networks of creative people who can work together and truly help us to understand the world’s people and cultures.

Marketing the Human Resources or Human Resourcing the Marketing?

For the past couple of months I have been looking for a job so I encountered several HR agencies and HR people in Prague. This was not the first time and I am still surprised how this works respectively does not work.

OK now my ideal take on recruiting is that a) I have / create over the time a list of clients and b) I have / create over the time a list of “workers”. I network both with a) and b) and go figure what happens... in the future a) may become b) and vice-versa. You slowly grow both group and you have a lasting quality relationships with both. That means not only good steady income, BUT also building YOUR goodwill.

Of course recruiting is one thing, but you also need a recruiter. The recruiter in my opinion needs some trades not only skills because recruiting is a craft as much as a mission (much like being a teacher). He / She should have at least an understanding of psychology, sociology and have empathy to say the least. That is more than experience or what I call a craft - craft and experience can be obtained, learned.

My close friend who is involved in recruiting as a top manager on the client side for about 8 years told me that he feels the recruiters’ qualification is that they “breath and have a pulse”. I think it might be little bit harsh, but lets say recruiting does not work very well in comparison with the ideal and / or theoretical side. The worst part is that even when the bad recruiting agencies go out of business etc. it will take a very long time to repair and recuperate the entire market and business field AND it will take enormous amounts of money dropped in brand building and goodwill building.

Now the question I ask myself: isn’t Marketing in Czech Republic and probably the entire Eastern European context in the very same situation? Isn’t marketing analogically to HR and recruiting an unprofessional field filled with unprofessional workers? Have we really moved from MARKETER = SOCIAL STATEMENT to MARKETER = JOB / MISSION?

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.

Research factories

“Research factories” are those global market research agencies that produce packaged surveys in exactly the same way that manufactures produce soap or washing powder. The analogy ends there: while soap has a clear role in people’s lives, the role of fast-moving surveys in helping manufacturers to make better stuff for people is questionable.

 

Fortunately things are changing and as per usual, the Internet is at the heart of the change. Research factories have seemingly embraced the Web – they have killed pen and paper field work (in Western Europe, the US and increasingly in other places) but they have not embraced and built on the core values and nature of the medium: openness, interactivity and active participation.

What they’ve done instead is to use the Internet as a cheap substitute for their existing strategy of conducting surveys: they put up online ad tests, concept tests, simulated market test questionnaires and concentrate on developing benchmarks, sticking to the old research model that is driven by academic criticism, “scientific” methodologies, control and isolation of elements (elements of product concepts or advertising) out of a wider context. While a simple concept or ad test might be a helpful tool for a client or creative agency, research factories tend to add complexity to these simple tests and then claim that such complexity is added value. The client ends up with traffic lights, indices and profiles that seem sophisticated but are little more than straight jackets. This might not be an issue for a client who is happy to based her/his decision solely on an output from fast moving research.

Strong clients will ignore such attempts to put reality into a box. Complicated research methodologies distance the client from the real people out there who buy stuff. We need quantitative data to help with decision making but if we rely solely on this data and don’t combine it with getting out there and listening to people face-to-face in their own world and on their own terms, we’re doomed. Complexity has nothing to do with added value. Knowledge and the interpretation of brand and product performance in the wider context of people’s lives does. I’m not sure that such knowledge and depth can come from research factories. The best people in qualitative research have already left these factories and the best minds in quantitative research will surely follow soon. Online fieldwork has become a valuable commodity and the way forward for strong researchers is to team up with global panel providers like GMI, Ciao or Lightspeed. Data that independent researchers gather through global panels will be as robust as any data from the factories. They are bound to deliver real value for clients by thinking of new ways to get a glimpse of what is really going on, rather than trying to churn out new pack tests or ad tests.

Clients could also commission simple survey themselves, using global panel providers. We have partnered with one of these and conducted a very simple, multinational study in Hungary, the Czech Republic and the UK–five questions for 100 women in each market. It took a few days to complete and the total cost was around £650!