I’ve never been a fan of the age old metric of dollars of research spend per person ($/FTE). It has always harkened for me memories of Operations Management and how we assessed the efficiency of a factory worker or cost per piece produced. An analogy which commoditized the research function rather than recognized the true artesian value of
this profession which is as much an art as it is science. Nonetheless, it was a convenient metric for finance, allowing for easy comparisons and resource planning. And if I’m honest with myself, in a time when the job was largely about the effort of collecting data and a bit less so on interpreting the results, it was a plausible surrogate.
INCENTIVIZE IMPACT AND NOT ACTIVITY
Despite my reluctant acknowledgement of the practical value of this metric, it’s never ceased to plague my conscience. Over the years I’ve witnessed a dramatic change in the role of the corporate researcher as technology and the rise of big data have converged. No longer is the majority of effort focused at creating and acquiring data, but rather on synthesizing, interpreting and making sense of the vast amount of available secondary, syndicated, and passive data. The acquisition of data has taken on a smaller role as primary research studies have become more focused, designed to address the “why” of underlying patterns observed in data. Rather than capture behavior, many seek instead to explicate the emotional drivers and unspoken motivations of behaviors observed in existing data sources. In this new world, if our only measure of success is research spend, then we incentivize activity rather than impact.
ROI MEASUREMENT REQUIRES A MINDSET CHANGE
There are many debates as to the value and feasibility of measuring the ROI of Marketing Research across the industry and within the walls of corporate research departments. I’ve heard all of the arguments beginning first with the tenant that it is impossible to accurately assess the true impact of research because timelines are too long and the impact too far reaching to be measured. So too have I heard that this practice demeans the profession, reducing our deep insights into dollars and cents. I’m afraid that I don’t agree. I believe that the value of marketing research is to drive meaningful business results and deliver better outcomes for the customers and patients that I serve in my role. These are things that can and should be measured. But to do so requires a mindset change. Simply put, to think of marketing research as a business investment. Like any other investment, I am going to be interested in the return or the impact that I get for that investment versus applying my limited resources toward another opportunity.
At times it is relatively easy to calculate an ROI. Copy testing lends itself nicely to a classic ROI measurement. We can identify the value of media placement in a specific channel or the value of targeting one customer group versus another. Where calculating impact
gets trickier is in more qualitative or future focused endeavors. But that doesn’t mean that we should just throw our hands up in the air. Rather, it means that we need to be creative and diligent in understanding the business impact of the work that we do. What is the impact on the business if we gain an emotional insight into customer motivations? What is the cost if we don’t? These are critical questions. As Malcolm Gladwell describes so eloquently in What the Dog Saw, motivational research which was first introduced to Madison Avenue in the 1940s transformed advertising and literally created iconic brands such as Alka-Seltzer. The studies were largely qualitative, but the impact was very real, measureable, and truly invaluable. The key I believe lies in defining the end result before we engage. If we aren’t identifying the success criteria of a study before we do one, then how do we know whether the research investment is worth it?
This is a long journey. We’re in a new age of marketing and communication that has a far reaching and profound impact on how business is conducted. The channels have changed as has the speed at which information and services are exchanged. Naturally, to the extent that we are integrally entwined, the forces of this new digital age have an equally profound impact on the nature and practice of the research profession. While it is easy in some situations to assign a value to the impact of research, much remains beyond our ability to clearly define in today’s environment. Nonetheless, I believe we have to try. By asking the right questions we not only measure our success, but in so doing, also determine our professional worth.
Lisa R. Courtade
Department Head, Global Customer & Brand Insights, Merck