New research technologies have put traditional market research firms in a tough spot. Instead of utilizing the expertise of market research & consulting firms, companies are opting to save money and do it themselves. So where does that leave the traditional market research firm?
Should firms be rethinking their business model? Yes, in my opinion they should be. And while everyone knows it’s easy to tell someone to change, it’s much harder to actually change. It starts with first determining what needs to change, what’s the most efficient way to change, how much that change will cost – in terms of time and money, what’s the ROI after deployment of the change etc. When facing an already scary situation of lower margins, this can be a very big pill to swallow.
Many firms turn to strategic consultants for help, but the wrong consultant could leave a business in even deeper debt, rather than the other way around. So, if you’re employed by a market research firm and find yourself in this situation, my recommendation would be to find a single strategic partner that is laser focused on two key business performance metrics: topline growth and improving margins.
These metrics are essential for attracting investment firms and encouraging higher sale value. They are also constantly monitored and tracked by the industry at large. The pressure to meet these metrics flows down to all members of the market research firm, including the Head of Client Services, Head of Operations, etc.
We understand this pressure so we’ve developed this guide to help market research firm executives improve their margins:
First, let’s look at the P&L structure of a Market Research/Consulting Firm:
Below are eight areas market research firms should focus on to improve operations.
- Programmatic sampling
- Sample consolidation
- New technologies that integrate with existing systems
- An automation ecosystem
- Process standardization to reduce wastages
- Performance monitoring system and metrics
- Offshore partners for resource flexibility as per business seasonality
- Offshore partners that reduce the cost of hiring, training, execution, and administration