Transcript of recording with Ray Poynter – generated automatically by HappyScribe which means it will be about 80% accurate – if you spot confusing errors, please email firstname.lastname@example.org. The timestamps are included to help you jump directly to a point of interest.
[00:00:07.080] – Ray Poynter
Welcome to the future Ray Poynter here, and I’m going to share my state of the nation with you about research and insights where we are and where we’re going. In a nutshell, what is my message? Yes, there is going to be more research in the future. We’re going to see more surveys, depth interviews, focus groups, ethnography, all sorts of research activities are going to increase, but it’s going to be less in quotes, market research. So let’s unpick that.
[00:00:41.460] – Ray Poynter
There are two key changes that are happening and have been happening. The first, as we saw from an ESOMAR and partner study last year, nearly 50 percent of the research that’s conducted around the world is conducted internally by clients, and that percentage is growing. So that is changing the nature of what is happening. The second change is that more than 50 percent of all the research that happens in the world is what I call no questions research. It’s passive, it’s observational, it’s database analytics.
[00:01:22.920] – Ray Poynter
So that, again, is a really big change that’s happening. These two changes are independent, but they’re both having an impact. Let’s think about the past. And if we think about insights, we had a fairly well-defined role inside companies for the need for insights, and most of that was met by market research agencies. So, for example, most focus groups were conducted by market researchers 30 years ago, 30 years ago, most surveys were conducted by market researchers.
[00:02:04.680] – Ray Poynter
What has happened now is that market research agencies are bigger than they were in the past. The amount of business in total that is going to market research agencies has grown, but it’s not grown by anything like as much as the world of insights has grown. So market research agencies are now a much smaller part of the total. And we see all of these other additions to see the UCS, the Web analytics, AB testing, data science, DIY platforms.
[00:02:42.030] – Ray Poynter
So instead of dominating the world of Insight’s market, research agencies are one aspect of what is going on. How is that happened? I’m going to come to the war in a moment, but the hell is because of online platforms and I’m going to show you one illustration, but this really covers the entirety of the research world. So if we go back to about 1991 and we think about surveys, they were conducted on paper or by telephone or by computer aided personal interviews, it required field forces and call centres.
[00:03:26.230] – Ray Poynter
It required the knowledge of how to print surveys and distribute them and punch the information in or scripting skills and analysis. So that is why nearly all surveys back in 1991 were conducted by market research agencies. Let’s go forward now. Now, the sample tends to come from online panels or it comes from electronic customer lists or it comes from online communities. We have got these SAS software as a service tools of every complexity. Simple answer to really complicated. And that’s how the data collection is overwhelmingly conducted projects.
[00:04:08.800] – Ray Poynter
You can simply go and create a questionnaire and then you can buy some sample or you can have preprepared solutions. You can do an ad test with zappy just by uploading your materials and paying for it online. And there are now more and more and more services like that, preprepared solutions. So all of a sudden you don’t need those skills that you need in 1991. So many more people can come into this space. Here’s a really interesting project that Patrick Colmer from Lucid is is working on, which is this research technology scape restack.
[00:04:48.610] – Ray Poynter
And if you look at this, what we think of a traditional market research is the little bit of a blue box in the top corner. The vast majority of it is leveraging platforms in different ways and different shapes and different forms. Similarly, if we look at last year’s ESOMAR Global Market Research Report, what we see is the structure here established and tech enabled, active and passive quantum kwoh. The world has changed massively and it’s changed because of these platforms.
[00:05:22.690] – Ray Poynter
I think there is a problem with the way that most market research, trade associations, many of the agencies look at the world of insights and it’s like the Chinese story of the frog at the bottom of the well. The frog lives at the bottom of a deep well. It can see light at the top. And one day a bird flies in to say, you know, there’s a whole world outside that the world is not limited to this deep hole.
[00:05:50.770] – Ray Poynter
And the little bit of light you can see at the top. And the frog is quite disbelieving because I think that when most market researchers think about the price of Qualtrics, they think it’s overpriced. And they do that because they’re looking at it in the context of market research. If we think about the turnover of market research, traditional market research, as reported by the 2019 estimate, GMAR, we see that it’s about 42 billion dollars. By contrast, Qualtrics is about to have an IPO.
[00:06:32.440] – Ray Poynter
It’s going to be spun out again. And the estimate is that it is going to be worth 15 billion dollars. Clearly, it is playing in a very different field and people see it as being in a very different field than just in the market research space. Here is again the same point, looking at market capitalisation. So Ipsus, one of the largest market research companies in the world doing classic market research. An innovative market research has a market cap of about one point four billion dollars.
[00:07:07.990] – Ray Poynter
Survey Monkey, a relatively straightforward data collection DIY SAS platform with access to sample is worth nearly twice as much as a whole. Research company Medallion, who focus on customer experience and employee experience. A tiny sector of market research. When you look at it through the market research frog at the bottom of the well perspective is worth three times as much as Ipsus. Market research is becoming a minnow in the business of helping organisations make better decisions through the. Use of human centric information, if we think of ourselves as in the business of helping companies and organisations make better decisions by leveraging information about people than market research is a minnow in that field.
[00:08:11.270] – Ray Poynter
Why is this change happening? Well, I’m going to put forward two particular reasons. One is customer centricity and the second is agile. And both of these are leading to democratisation of insights. If you are customer centric as an organisation, you can’t just have the insights team working with customers. Every part of the organisation needs to be walking in the customer’s shoes. They need to be having direct, non intermediated conversations with customers. That is the first driving force to make all the parts of the organisation listen to customers, talk to customers, learn from customers.
[00:09:00.290] – Ray Poynter
The second is agile. You can’t have agile market research. You have an agile company. You have agile projects. Imagine that you are trying to make some new sustainable ethical sneakers. That needs to be an agile project. It wants to use research. It wants to use design. It wants to use engineering. It wants to use procurement. Every one of those parts has to be agile and they have to be connected together. If you outsource the research part of that to an agency, it’s really hard for the team who are working in an agile way to get the benefit of the customer insights.
[00:09:45.570] – Ray Poynter
So both of those together leading to this democratisation. So in the past, we had customers who spoke to agencies and agencies about the customers. The agency spoke to the inside team and the insight team spoke to all the business units. And that was a perfectly sustainable model when companies were product centric and where they used the waterfall method of developing new products. The trend now is to go from customers to business units, not through intermediaries, not through the agencies, not through the insight team.
[00:10:27.140] – Ray Poynter
And this is what the platforms are enabling. And it’s been a fantastic conversation in LinkedIn around this and about some of the ideas that I’ve developed for this presentation, including one, an observation from Ryan Barry, who’s the president of Zappy. And we were talking about how INSIGHT teams can become coaches. And he talked about an example. We just rolled out an instance of zappy to 800 marketeers in a global alcohol company. It was bought and vetted by insights.
[00:11:00.530] – Ray Poynter
So these 800 marketeers will be able to develop ideas. They’ll be able to communicate with customers directly without having to go through any intermediaries. They will be using the platform. They’ll be talking to customers directly. And the quality standards and how it’s going to be used had been vetted by the insights team. And that is a real model for how we’re going to go forward. So here are some key questions that arise out of this. What will happen to quality?
[00:11:33.000] – Ray Poynter
What’s going to happen to the agencies? What about the inside teams? What not the trade associations? What about data ethics and market research ethics? And if you are a new researcher entering this industry, what is my advice to you? Quality, I believe very strongly that the median project will be of higher quality. We know that the best research is done by the best teams using bespoke methods and specialists. But you know what? There is an awful lot of not such good research going on.
[00:12:12.810] – Ray Poynter
Have a look at some of the surveys that are sent to the panel companies that they have to throw back and ask them to improve. What we’re going to see as we standardise is best in class. We’re going to see tools and adapted methods so that a typical project will be better. We will still see that the innovative or the non-standard complex problems are going to be handled by specialists. The platforms are not going to remove that. The platforms are going to deal with the bulk.
[00:12:43.680] – Ray Poynter
The biggest challenge to quality going forward is the current biggest challenge to quality, which is the challenge of sample. How are we going to make sure that the people we’re talking to are the right people, that they’re engaging with us in the right way, and that we’re getting good data from them? Market research agencies, we’re going to see a process here where they’re going to continue to grow in absolute terms because the pie is getting so much bigger, but they’re going to lose share to internal more and more research is going to be done internally, not through agencies.
[00:13:23.030] – Ray Poynter
And they’re going to lose share to non market research companies. The web analytics, the data scientists, the design companies and so on, because the whole human experience pie, listening to customers, helping companies make better decisions is going to grow much faster than the small part. So market research will become a smaller and smaller part of the total, even though it will continue to grow in absolute terms for the foreseeable future. What about client insight teams? Some are clearly going to shrink following this democratisation.
[00:14:06.380] – Ray Poynter
All of a sudden we will see lots and lots of companies just associate that business units with the platforms. And this will put pressure on some of the inside teams. Some inside teams will actually just become assistants to others. So maybe you create an online community and all of a sudden the insights teams are scripting surveys for their colleagues, then running around and fetching data for them, and that it will be what will happen to some insights teams, but others are going to transform the insights to be coaches.
[00:14:43.010] – Ray Poynter
They can be the arbiters of value. They’re going to be the strategy consultants. I strongly recommend anybody who’s an insight manager works in the Insight team to read James Ritualise new book Transforming Insight, which shows a new vision of what the insight teams in the future are going to be. And they’re not going to be running all the small bitty tactical, agile studies. They’re going to be driving strategy. They’re going to be creating overall training and guidance and leadership.
[00:15:17.840] – Ray Poynter
So all three of these will happen in different companies. What about the trade associations? Well, it’s going to be really challenging because the boundaries are going to disappear. The things I think they should focus on are advocacy. So lobbying government to keep the laws so that research is possible and sensible lobbying companies to use evidence based decision making, setting standards. The national bodies and ESOMAR internationally are great at setting. This is a good standard for this education, helping people know what is good research and how to do it, providing networking opportunities for the people involved in this industry and providing business opportunities.
[00:16:09.440] – Ray Poynter
Those, I think, are the five things that the trade associations really have to focus on if they’re going to create a meaningful role into the future. What about ethics for commercial research? Anonymity is going to be much less common. That is going to be a real challenge for a lot of traditional researchers and for a lot of traditional research companies and for a lot of the trade associations. It’s going to be about informed consent. That is going to be the new norm because selling and marketing to participants will be the norm going forward.
[00:16:52.400] – Ray Poynter
If we think about what happens with SCIEX, for example, you do you take your car, you get it serviced, you’re not happy with the service. You fill in the survey form. And then as a consequence of that, the form goes back. The electronic form or whatever technique has been used. You receive a phone call, you receive an apology, you receive measures to put it right. You receive possibly some financial compensation. The employees who performed differently might receive training or they might be fired.
[00:17:28.550] – Ray Poynter
We’re talking about a very different world where that single survey, you do results in actions and quite possibly when you test a new product, you’ll get the opportunity to buy it. That is going to be part of the new normal going forward. So we need to work out what are the right ethics to be using. This also means, I believe, that social research will need to separate itself from market research where anonymity is going to continue to be really important and where dispensation from legislation.
[00:18:03.900] – Ray Poynter
Is going to be really important, so I think we will see social research spin off away from the commercial world of market research. So you’re entering this industry as a brand new person. What should you do? You want to be able to understand business questions and needs in the context of human behaviours and beliefs. That is the core essence of what we do. We talk to people, we watch people, we listen to people. We understand behaviour.
[00:18:34.890] – Ray Poynter
And we use that to give advice to organisations so they can make better business decisions. You need to be able to choose and implement a solution from a range of possible options. Some of those will come from platforms. Some of those will come from your own knowledge of doing research. And you need to be able to turn the findings from the research into recommendations. Then you need to lobby for those recommendations. You want to be in the business of persuading organisations to implement the recommendations you’ve made.
[00:19:08.340] – Ray Poynter
That is how you activate the findings. That is how you become more valuable. So focus on using machines or platforms every time they can do the job. If they can do the job well enough, use the machines, develop your skills in the area where machines can’t do the job, tying together the patterns, creating the recommendations, choosing the best research approach, looking out for the pitfalls that the system might throw up, and making sure that your recommendations are implemented.
[00:19:45.540] – Ray Poynter
What is the future of market research? The need to understand people to enable better decision making will grow the use of tools and approaches to understand people will grow. We will see more semiotics. We will see more ethnography. We will see more observational research. We will see more data science, more data analytics. We will have more. Therefore, semiotician, we will have more ethnographers, will have more data analysts, strategists, cultural specialists, all of these sort of groups.
[00:20:19.350] – Ray Poynter
People are going to grow in number and influence, but there will be fewer market researchers and they’ll be doing less quotes, market research. I look forward to your questions.