May 8, 2018
Read time: 3min
May 8, 2018
Read time: 3min
There are three key questions every market research operative needs to answer: How effective is your research organization? How can you tell? And what can you do about it?
When a seminal 2009 BCG study first laid out a maturity model for corporate market research organizations, it created a new benchmark for the industry, setting aspirations for insights executives worldwide. According to the model, a mature research organization should have a strategic role within its business, influencing the majority of decisions, and guiding the company as a trusted advisor.
Here are the four, progressive stages of the model:
Stage 1. Traditional market research – Producing tactical reports at the request of line managers.
Stage 2. Business contributor – Delivering research concentrated on short-term innovations such as packaging and promotions, with most priorities decided by business leaders.
Stage 3. Strategic insight partner – Creating consumer insights that guide commercial business decisions across functions, challenging economic and strategic perspectives.
Stage 4. CI as a competitive advantage – Focusing on innovation and prediction, CI is used in business decisions and core processes including new product development and strategic planning.
It was this maturity model that Simon Chadwick, Christine Barton, and Ravi Dhar used as the basis of their landmark, seven-year study of Consumer Insights in major corporations. Published by ESOMAR in 2016, Hurry up! And wait! The road to research impact was the most comprehensive study ever undertaken on corporate CI management, but some of its findings were hard to hear.
Despite the aspirations set out in 2009, 80% of CI functions surveyed in 2016 failed to progress beyond stage two. Improvement in 2009 was marginal, and the message was sobering: insights organizations are aiming high and falling short.
That’s what makes the three questions above so pressing. If market research leaders want to meet their goals and mature, there’s no longer room for complacency. CI functions need to take a systematic approach towards creating strategic value, and measuring ROI (return on insights) is crucial, as the ESOMAR report makes clear:
“Among strategic insight partners (Stage 3) there is virtually no argument as to whether ROI should be measured – almost all of them do – and satisfaction with the function is extremely high. But even in Stages 1 and 2, the mere fact of measurement is significantly correlated with higher satisfaction.”
Elaborating on those findings, BCG published ROI of Insights in November 2017, applying the value of measuring ROI to the stages of the maturity model, with the following results.
In Stage 1, they saw little or no ROI measurement.
In Stage 2, insights teams performed inconsistent and qualitative ROI measurements.
In stage 3, project ROI was frequently measured and quantified by internal team members outside the insights organization.
Ultimately, fully mature, stage 4 organizations consistently and continuously measure ROI, using specialists.
The relationship is clear – measuring ROI is crucial for demonstrating and developing the strategic value at the core of a mature MR organization. And those measurements can take many forms, whether directly financial or drawn from other metrics, such as market share growth, churn reduction, the number of new customers or customer satisfaction ratings.
Embedding ROI measurement into the research process creates enormous value and platforms like Market Logic that ensure chosen metrics are effortlessly on-hand. At the most basic level, insight platforms measure how frequently insights are used and by whom.
When research workflows are integrated, they also measure how much duplicative research is prevented. When innovation and marketing workflows are also integrated, companies can directly trace the impact of a single insight into a single business decision and the consequent outcome.
In short, today’s mature insights organizations aim to close the ROI loop, and they are using marketing insights platforms to do it.
Find out more about our Insights Platform by requesting a demo.
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