Market research teams today face two related but somewhat opposing goals: the need to deliver more insight to stakeholders in a timely fashion and the pressure to reduce costs.
In an effort to be more customer centric, many companies are aspiring to become insight-driven businesses. In these companies, research teams play a crucial role in gathering, analyzing and delivering customer insight to relevant stakeholders. But market research teams are expected to do this effectively with a shrinking budget. For instance, the Institute of Practitioners in Advertising found that budget for customer insight initiatives continue to trend downwards despite the growth of marketing budgets.
The challenge for research is clear: do more with less. Many customer-led companies are meeting this challenge by reducing their research costs, and they’re doing it without compromising their effectiveness. Here are three examples.
DEWALT focuses on authentic customer engagement
Talking to customers is important for DEWALT, the leader in the professional power tool market and part of the Stanley Black & Decker company. Tradespeople use DEWALT tools in their jobs, so the company needs to make the right decisions when it comes to its products.
To engage its customers, the company uses the DEWALT Insights Forum, an award-winning insight community of more than 10,000 active tradespeople. The community helps stakeholders at DEWALT get the insight they need to make better decisions, and it does so without blowing the research budget. In fact, since opening the community, the company has saved millions of dollars in research costs.
“We looked at the activities that we did last year in our insight community and found that would have spent the equivalent of $5 million if we engaged a vendor to do those research studies for us,” Shannon Chenoweth, market research manager at DEWALT, told us in a Q&A. “Considering the investment we’ve made in our insight community, we’re saving millions of dollars for the company.”
Jetstar moves from ad hoc to continuous
Jetstar Airways, an Australian low-fare airline that is a wholly owned subsidiary of Qantas, has always worked hard to listen to customers. But it recently realized that it needed a more systematic and consistent approach to engagement. Ad hoc solutions were failing to reliably identify what customers really wanted.
To continuously leverage the voice of the customer, the company launched the Jetstar Community Panel to engage 35,000 members across Australia, New Zealand, Singapore and Japan. With the community, Jetstar has increased its research activities and delivers insight that informs strategic initiatives, including the relaunch of its rewards program.
Jetstar scaled its research efforts without breaking the bank. Given the number of activities it has deployed in the community, the company estimates that it already saved $1 million in research costs.
Sun Life Financial delivers the right message to the right audience
As an independent insurance provider, Sun Life Financial saw a need to engage two distinct but equally important audiences: its end customers and the brokers that sell to them. These two groups have very different relationships with Sun Life Financial. To capture the insight of both audiences, the company launched two separate insight communities.
This strategy works well for Sun Life Financial. The company delivers a unique experience for both groups and gets the insight stakeholders need to improve marketing materials and drive broker and customer satisfaction. The communities also provide huge research savings, according to Lindsey Collela, Sun Life Financial’s associate director of Insights Integration. According to her estimate, the communities have helped the company save close to $ 1 million in just two years.
Better relationships mean more research cost savings…and much more
The examples provided here highlight the importance of customer relationships in driving research efficiency. DEWALT, Jetstar and Sun Life Financial use insight communities to engage with customers who’ve explicitly opted in to provide feedback. Because these customers have agreed to participate in the research process, insight teams have a ready pool of customers they can engage, without the need to spend money recruiting new respondents every time there’s a new research project.
In many cases, companies have saved money by cutting back on the need to engage research agencies. For example, in The Total Economic Impact™ of Vision Critical, a study from Forrester Consulting on the ROI of the Vision Critical platform, one interviewed company said, “Historically, we were used to doing full service, expensive ad hoc campaigns where we weren’t doing the building or writing.” With an insight community, the company brought many research projects in house.
The same Forrester study concluded that global companies that use the Vision Critical platform see a 75% reduction in cost compared to traditional market research methodologies and save an estimated $2.9 million in research costs.
Quantifying research cost savings as a starting point
Demonstrating research ROI has never been more important, and measuring research cost savings is certainly one way of doing that. But to provide a richer picture of their contributions to the organization, research teams should track other metrics that link research initiatives to corporate KPIs. Many companies that we work with, for instance, have been able to demonstrate their contribution to new revenue streams. Other teams emphasize how they’ve shortened project timelines while delivering relevant and timely insight to different teams.
For the most sophisticated research teams, proving market research cost savings is just the first step. Ultimately, these teams also measure their impact to metrics that the C-suite care about—an important step in transforming customer intelligence into a strategic corporate asset.