Innovate or Die
When the going gets tough, itís time to state the case for using qualitative research even more forcefully than before
The credit crunch and resulting economic slowdown are forcing the qualitative research industry to reassess its future.
For qual agencies, the worldwide impact of a slowdown and, in certain countries, a recession is leading to some very real challenges.
Extreme pressures on margins, shortages of skilled qual researchers and expectations to either add significant value through research, or just do the basic research and pass it on for internal analysis, are all key issues facing the industry over the next 12 to 18 months.
FMCG/CPG clients are enjoying record profits, large retailers are announcing improved margins, yet the qual world is already feeling the pinch of key sectors starting to cut back on research. Finance and telecom clients have been decimated by the uncertainty in the financial markets, so their limited appreciation of qual research has been challenged even more.
Public sector, the saviour of many a research house, will see tax revenue diminish and as a result, across the Western world, public spending is expected to decrease in real terms over the next two to three years.
Clients are delaying product launches, cutting back on large research projects, cutting internal research functions and resources or finding ways to cut back on all but the basic qual research.
Consumers are experiencing higher commodity and utility prices, kicking off the risk of inflation and, therefore, shrinking real incomes. For the first time in decades, consumers are facing the challenge of making real economic trade offs. This will have a marked impact on consumer behaviour — one that qual researchers need to understand, research and exploit to their advantage.
The challenge for research agencies, large and small, is to differentiate themselves in these difficult market conditions by clearly linking value to the research they do. The ogre of commoditization of qual research is now looming bigger than ever.
Demonstrating value will require researchers to link research to either money saved, or value added. Research on product innovation or launches should challenge existing practices and enable researchers to quantify savings to clients. Using an integrated approach to qual research in key markets, a large drinks producer saved $4 million in launch costs. This was quantified as part of the pitch and proved during the research.
Client cutting internal resources offers the opportunity to external researchers to add value through analysis and providing solutions, rather than just input to solutions.
Qual research has the opportunity to move beyond focus groups and moderation, to understanding consumer journeys and trade offs, and to a clear understanding of stakeholder engagement in the process of product development, research and innovation.
The maxim innovate or die has never been truer.
Copyright © Association for Qualitative Research, 2008