What is the economic climate going to be like over the next 3 years and how does that impact research?
20th December, 2012 - Posted by Paul Kavanagh - No Comments
Tough economic conditions since 2008
We have all experienced the tough economic conditions of the past four years and there has been much speculation as to whether things are getting better, worse or just staying the same.
For the research industry I would certainly say 2008 could have been called our ‘Annus horribilis’, to steal a quote from our Queen; non-essential budgets were in lock down; those budgets that survived were gradually culled throughout the year; Board rooms were a mass of speculation, sometimes over reaction and general panic about how to weather an obvious storm on the horizon.
Through 2009, 2010, 2011 and 2012, though the economy has still not been strong, we did see some improvement in the research marketplace as companies began to unlock restrictions on research budgets, however research teams now were being told to scrutinise every penny, raise tenders for jobs that previously would never have gone to a pitch situation and generally to try and squeeze as much out of already tight budgets as possible. As a research agency we now have to work 10 times harder to win a client and work 10 times harder to deliver the project on less budget. For many big agencies this has been painful because of their established overheads, greater difficulty in being flexible and the overall shrinking pot of money in the marketplace.
Noticeably with so many researchers being made redundant over this period, we have also seen a rise in the number of small agencies being set up providing a double whammy for the bigger agencies as the cake is being reduced at one end and being gnawed at from the other end.
So what is in store for the economy in 2013, 2014, 2015…. and onwards? And what will that mean for the research industry as a whole?
Recently I was at the Customer Engagement Summit in London and there were some excellent presentations. But one that I found particularly interesting was by a behavioural economist, a gentleman by the name of Roger Martin-Fagg. I don’t pretend to be able to repeat what Roger said or explain it in any way that will do it justice, but the essence of his presentation was:
- UK consumers have been paying off debt rather than spending, which effectively means money is being extinguished from the monetary system
- The world economy is slowing down rapidly led by Europe which will be in recession
- The UK will grow next year by no more than 0.5%
- Interest rates will remain at 0.5%
- House prices outside central London will continue to fall in real terms
- Wages will grow at under 2%, prices at 2.5%, so real incomes will continue to fall
- Individual businesses will only grow by taking market share. This will require superior VFM, customer service is a key component.
So what will that mean for research buyers and sellers?
In our view for research buyers it will mean more of the same:
- That companies will continue to spend on research, though perhaps the overall pot will not be getting any bigger
- They will continue to submit competitive tenders and have a very tight view on deliverables vs. cost
- They will shop around a lot and be open to new offers, new methodologies, new thinking, better value propositions
For the agency we suggest it will mean:
- We will need to be more creative and add more value to win pitches
- We need to work really hard with our existing clients and make sure they are getting real value and service
- Focus more on our strengths and specialism and be more selective in the tenders we respond to, to maximise both our return but also the time client side researchers are having to spend reviewing a higher number of proposals
It is going to be a tough 3 years ahead and research agencies and client side researchers will need all their skill to continue delivering good research on reduced budgets but for those delivering good service and good research, this should not be a problem!
Roger’s full presentation is available to clients and registered guests in the members’ area of our web site.
Add value and thought leadership
15th September, 2010 - Posted by Tom Raybould - No Comments
Only last week in one meeting we heard from one prospect that an incumbent agency was considered ‘complacent’ but they hadn’t actually been told that. In another there was serious doubt as to whether the account director who had been wheeled in at the start had even been involved in their project.
In a recent Research Magazine article by Steve Gatt, Economic and Insight Manager at Volkswagen Group, complained that most of the research he sees is ‘not up to scratch’ http://www.research-live.com/multimedia/video/volkswagens-insight-boss-on-inadequate-research/4003273.article, that reports are too long and don’t deliver. The article is interesting, as are the comments afterwards; there is certainly an argument that many agencies aren’t delivering, as borne out by the conversations we highlighted earlier, but clients do need to shoulder some responsibility too, only too often briefs are vague and ill conceived.
Perhaps being a smaller research consultancy with senior staff helps us to be more focused on adding value and it is encouraging that the ethos that we set out on day 1 at Beehive is not always shared by some agencies we compete against. Certainly some of the comments in lieu of Steve’s article suggest that smaller boutique agencies should be considered more because of the add value they can bring and this certainly rings true with many organizations we have spoken with.
Maybe the current macro economic climate is a good thing for clients and agencies alike and will force the industry to deliver added value to our customers’ and make everyone take a more strategic approach. We strongly believe the industry as a whole should be striving even harder to go that extra mile, to over deliver not under deliver and that by understanding our clients and prospects better will help us to deliver:
- A more strategic approach – one where our solutions meet with the wider context of business objectives and research requirements
- Creativity in our research solutions
- A pro-active service where Account Directors remain involved and keep clients fully informed – sounds simple but not always done
- Better advise on mitigation of risks before they arise – and not being scared to raise them at proposal stage in case it puts the client off
- Solutions that are what a client needs and not what we want to sell them
- Forward thinking and innovative methods that are selectively used to enhance the recipe
What is good today may not be good enough tomorrow and perhaps we should just strive for excellent today, that way tomorrow has to be excellent too.
It’s certainly an ethos we will continue to strive for, but we also believe clients need to take responsibility more and reward agencies that go the extra mile.
Is polling and election research better, more engaging and more robust?
14th May, 2010 - Posted by Tom Raybould - No Comments
An event like the general election epitomises the requirement for robust, insightful, relevant and rapid research in landscape that is constantly changing. It was therefore fascinating to see the ever changing pre-election polls and heartening to see the art of research during election night being applied in such a varied and engaging way. Yes the pre-election polls did get the final result wrong but were they wrong or were they actually monitoring the pulse of a nation that was so undecided. For my money it was the latter as you only had to see how the political debates impacted the mood of the nation to see the results change. Are pre-election polls a good barometer of what’s actually going to happen, perhaps not, but is that what they are really measuring? I say hats off to all the researchers involved, it was great to see not only data being presented in an interesting way, but also how research is able to deliver meaningful and understandable insight.
As researchers we can all learn from this election; we should continually strive to find more interesting ways of presenting data, to understand customer sentiment better and deliver insight to our clients in a way that really shows the ROI of good research. I still think we shouyld say well done the researchers involved and the UK research industry.
Using the right tool for the right job
24th February, 2010 - Posted by Tom Raybould - No Comments
You can use a hammer to drive screws but the results tend to be less than satisfying, likewise you can use a screwdriver to hammer nails with little to no effect. Both the screwdriver and the hammer are highly effective tools when applied in the correct situation. This doesn’t apply just to potentially self-harmful DIY escapades, everyday we make choice after choice to ensure the tools we use give us the results we desire. It’s about using the right tool for the right job.
Research evolution has brought us “Communities” and as with many new solutions the research community is touted as a silver bullet for many research requirements. There is no denying that the research community methods and applications are potentially vast, but is it always the best solution in every situation? Converting the potential of a community requires a great deal of skill, effort and time and with the wealth of other methodologies and tools available to the researcher the question should perhaps be is it the most appropriate in all situations?
Thus are you using the right tool for the job?
If a job’s worth doing
14th January, 2010 - Posted by Tom Raybould - No Comments
If a job’s worth doing, it’s worth doing well. It’s a common and universal proverb; it’s ubiquitous and can be applied to nearly every aspect of life and business. It seems so simple to follow but sometimes doing a job well is easier said than done.
The research industry is certainly not immune to this. I am sure most people can point to at least one project that failed to match its potential or deliver its expected objectives. There are numerous possible causes for this perhaps; the project was just a token effort with insufficient budget, manpower or time (or a combination of all three); maybe there were unrealistic expectations or external pressures. The possibilities are endless.
So how do you get the most value from your research? Well it isn’t enough to just implement a research strategy; its execution requires careful planning, expertise, considered objectives (typing “SMART objectives” in your favourite search engine and you’ll find a plethora of explanations) and of course it takes effort.
But as they say “If a job’s worth doing, it’s worth doing well”.