Is market research useful?

A strange question from a market researcher who spent her early years setting up the first advertising research unit in an advertising agency in Britain and who conducted research on virtually all of the agency’s clients from copy development to final execution. And also as a member for many years of the Market Research Society and other research organisations as well as a profound supporter of consumer market research. The answer is, of course, that SOME research is useful but a lot most certainly is wasted. The waste doesn’t come necessarily from researching the un-researchable – business strategies, for example - nor from research that is a sledgehammer to crack a walnut, nor from simply incompetent methodology or even from researching the same problem over and over again. But as any Marketing Director will admit, filing cabinets are filled with research reports, unread and un-acted upon.

 

I interviewed Simon Lyon, recent Marketing Director of a B2B company, Aggreko. (The company is international and rents generators or all kinds to business purposes from Olympic Games to oil rigs to individual businesses). The interview described how the bar was set very high for research and gave me quite a lot to think about. 

 

A discussion at a recent Market Leader editorial meeting about the difficulty in getting Boards to listen to and act on consumer knowledge – a perennial problem that may even be getting worse – led to the suggestion that I take a closer look at Aggreko. What Simon managed to achieve with Net Promoter Score methodology was remarkable: the entire decision making structure of the company became re-oriented around the customer. Clients are the centre of the organisation and everyone knows it and acts on it. This is a model that will obviously suit some companies better than others, but the fact that a similar approach is used by John Lewis shows that it can reach further than B2B.

 

The Net Promoter Score methodology has had a history of plaudits and criticisms. The pure simplicity is a challenge to the market research industry – where most of the criticism, not surprisingly, comes. But the concept is common sense. We know that the best advertising for a product or service is personal recommendation. Thus, the NPS methodology simply asks customers their response to the product or service by use of a scale from highly recommended to definitely not recommended. In other words, it is an advocacy measure that can then be followed up by supplementary questions about the areas of dissatisfaction to give a clear picture: is it the product, the service, the price – or any other aspect of the customer experience that is relevant? 

 

What Simon did was to institute a system whereby every time the customer hire agreement came to an end, it automatically triggered a short NPS questionnaire. These questionnaires were collated by different segments – regions, individual salespeople etc – and presented monthly. But the brilliance of the system was that, along with the NPS score, came a P&L statement so the link was clearly made between customer advocacy and sales - plus the appropriate diagnostics to help fix any problems.

 

So back to my original question: is research useful?

 

The centrality of this research to the decision making of the company was dramatic and revealed what may be the best criterion of how research should be judged. Does it change the behaviour of customer facing people? In this case, sales people could see – on a monthly basis – the link between the customer’s experience (and the individual sales person’s handling of it) and sales. If research can change the behaviour of the people involved in delivering the product or service to make them more customer focused, it is most profoundly useful. It goes without saying that this research and the figures that it produced figured prominently at Board level.

---

Read the whole story in the next issue of Market Leader. And read more from Judie in our Clubhouse.