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by Peter Pfeiffer |
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What’s Happened to the Research Industry?Observations on the Current State of Affairs
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Author’s Note: After completing my marketing research schooling I joined a large custom research firm in the Washington, DC area that works primarily for agencies of the federal government; my position there, however, included approximately half more traditional marketing research. Despite previous experience it was there that I matriculated as a researcher, performing projects based on high quality standards and without a dominant sales orientation. From there I sought to learn more about mainstream marketing research and to apply the skills I had acquired. Following are observations over this period.
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For those of us entering the research industry in the early ‘80’s that was a time when the field offered great promise. Its acceptance and pervasiveness was growing and it was entering into many useful and intellectually stimulating areas such as geodemographics, personality and lifestyle indicators, scanners, and physical research. Analytical, modeling, and test marketing techniques became refined and easy to use; improvements in computer hardware and software allowed for quick, easy, and inexpensive data collection and analysis; qualitative techniques assumed an accepted and important role; and methodological refinements and changes in the telecommunications industry helped make telephone research a relatively fast and inexpensive way to collect projectable survey data. At the same time marketing and survey research became a full-fledged career. People entering the field could acquire specific, relevant training and they could expect good, career-track positions in business, public, and nonprofit organizations. Not only did business, social science, and statistics programs offer relevant coursework, but specific, even industry sponsored programs, were developed to provide targeted training and degrees. These changes and its once-and-for-all “arrival” portended a golden age of sorts: a necessary corporate, policy-making, and information gathering function; a scientific discipline with empirically-based principles and a large, growing body of knowledge; and a highly-trained workforce to uphold the highest methodological, quality, and ethical standards. Now, a decade or so after this wave of change, what has become of the promise? Something went wrong. The rapid growth and the many changes have also created worrisome trends. What began as technology-based improvements to the science of the field have been transformed into fierce competition, fragmented services, and a lack of attention to the basics of quality research. Errors, misconceptions, and misuses of data are as common as ever and the size and diversity of the field makes it that much harder to gain a handle on the problems and set the course straight.
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3 The most pervasive and destructive characteristic of the growth in the number of research firms is dramatically increased competition and the resultant salesmanship that occurs today. While sales have always been a part of research—the pioneers were geniuses at selling a whole new concept of research—in recent years it has reached an entirely new level. Advertising, sales calls, newsletters, mailing lists, trade show exhibitions, and entertaining have become dominant factors in the way research firms compete. According to CASRO some 70 percent of research companies now have employees whose primary job function is sales. For the most part, senior contractor staff are judged based on the revenue they produce rather than how good a researcher they are or how well they work with clients. Astute clients can play them off on one another and negotiate prices. And, since the acceptance of research has probably leveled off, competing for new business has become a zero-sum game: if you want more revenue you have to steal it from someone else. If you were the proprietor of a small research firm, basically operating on a shoestring with a couple of clients, how hard would you sell to retain them? And if you had a shot at another major client, how hard would you sell them? If one’s entire livelihood is dependent on securing or retaining a limited number of clients, can they necessarily be counted on to perform quality, objective, unbiased research and possibly lose them? Is research a commodity or is it based on the efforts, skills, and reputations of the professionals involved? Would you buy legal services from a lawyer who cold-called you to sell his wares? Should you buy research from such a person? In a perfect world of discriminating research buyers, uniformly high quality research, and unlimited budgets increased competition and aggressive selling would benefit everyone. Obviously, people are going to tell you that their data are projectable, when they are not; that they know more about your industry than anyone else, when they do not; that the senior staff member will analyze the data and write the report, when they will not; that all the work will be conducted in-house, when it will not, etc. If you hear it often enough you tend to believe it. I it happens often enough on an industry-wide basis it becomes a whole new set of reduced standards.
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Page 2 While marketing research has progressed beyond just custom projects, the basics—selection of a representative sample, development of an appropriate “instrument,” and quality data collection—remain its foundation. But in the milieu that has emerged, too many practitioners either ignore, or are ignorant of, these essentials. As evidence, witness the distinct, chasm between marketing research and other forms of public policy and academic survey research. Marketing research has become a mature category and, as such, it is either ripe for a shake-out or it is destined to redefine itself in a manner quite different from its original mission. An Industry in FragmentsPerhaps the most noticeable trend over the recent past is the massive increase in the number of research firms. Certainly the industry itself has grown, but the skyrocketing number of such businesses—as evidenced by the sheer heft of the Green Book and other directories published by the AMA, MRA, and AAPOR—is way out of proportion to this growth. With increasing frequency researchers who have either dealt with a few clients or have been laid-off (common occurrences given corporate reshufflings and contractor sales mentalities), have set out to start their own companies. In addition to more traditional firms offering design, data collection, data processing, and reporting, the industry now includes such entities as one-person operations, traditional field services, nonprofit, academic, or publicly-supported facilities, businesses offering samples only, data processing and key entry firms, and huge telemarketing and mail processing centers. Some of the organizations in this new breed offer particular industry or subject matter expertise and others may specialize in a particular part of an overall project. Too many, though, have no particular niche or if potential business comes their way—regardless of its nature—they more than likely will not turn it away. They may claim to have the capability or expertise to perform just about any project when in fact they lack the physical capacity or financial resources to conduct them properly. Or, many may lack specific “nuts and bolts” types of skills that are typically not learned on the client side of the business or in school, yet are essential for performing most start-to-finish research projects (e.g., how to draw a random sample, what range, consistency, and edit checks to build into a key entry or computer-assisted data collection program, how to set up and code open-ended responses, how to check unweighted and weighted tables, etc.).
Page 4 Where the Research IsAnother trend related to the growth in the number of research firms is a tendency to piece projects together using various niche players. For instance, one firm might be called on to provide the sample; another might perform mailing or telephone interviewing data collection; a third could perform data entry and tabulation; and yet another might provide analytical consulting. These individual tasks could be purchased by the ultimate client or they might be secured unbeknownst to that client by a research firm, most likely a smaller one, incapable of performing these tasks themselves. Frequently a major factor in choosing the various pieces is price—not quality or experience—in a commodity-like manner. Continuity, key findings, timeliness, and even cost can be sacrificed by spreading a research project all over the place. Who’s to stop the niche players from getting in over their heads, from saying they can do things they cannot, or from applying a particular approach or technique—which might be fine in other situations—to a part of a project where they are not? While such diversity and competition has the potential to be beneficial it requires a skilled and meticulous effort, one which may or may not be present, to select and monitor all the pieces of a project performed by numerous vendors. The industry has evolved from “housewife” field services to niche “professionals.” But how valuable is a high-powered Ph.D. design and analytical team when the project is fielded through a giant telecenter with dubious quality, low response rates, and poor supervision? Then, suppose the data are machine cleaned and tabulated by a specialty firm that, because they are not familiar with the overall project, does not code the data properly and does not make the tables add to the proper bases. And if there is a problem with a questionnaire such as an incorrect skip pattern or respondents misinterpreting particular questions, would you expect a small consulting firm or field service to re-field the surveys to the same extent that a larger, better capitalized firm would?
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