5 PRACTICES. That Improve the Business Impact of Research EFFECTIVE DSTAKEHOLDERS

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1 5 PRACTICES That Improve the Business Impact of Research 1. ALIGN DIRECTLY WITH KEY STAKEHOLDERS 2. LINK THE WHYS TO THE WHATS OF BIG DATA 3. FOCUS ON METRICS THAT MATTER 4. PROVE RESEARCH ROI 5. GET TO THE POINT As a market researcher, you may feel increasingly under siege by senior management questioning whether market research effectively impacts business performance. Research teams know they need to deliver valuable insight to drive powerful business impact and deliver it now. For many, achieving that objective, with no increase in budget or resources, can seem overwhelming. In fact, that perception could not be more wrong. Today, market researchers have all the capabilities necessary to drive the kind of impact that won t just earn appreciation, but can transform the research department into an irreplaceable insight machine. In working with our customers, we have observed five practices that will transform your team into the group that everyone, from C-Suite executives to mid-level managers, will automatically turn to when making key decisions. 1. ALIGN DIRECTLY WITH KEY STAKEHOLDERS Develop relationships with executives who understand the value of accurate market research. This is the crucial first step for any market researcher looking to drive more impact. Without top-level support and advocacy, no matter how valuable your research, it will not get the recognition it deserves. Cultivating these relationships does not mean schmoozing your favorite executives, but rather, understanding what the stakeholders and the business need from your research and providing it so they can succeed. Kevin Jessop, CEO of Evolve Research said, Once the stakeholders see the value of your research, they will pick up the gauntlet and help you sell it to the rest of the organization. By understanding key business drivers and initiatives, you can seek feedback from your key executive supporters. No one knows better about what is needed from research data than the people who will use it to make decisions. Once you have identified your key advocates, engage them by including them in the initial strategy and design of your research. DIGITAL MARKETING COMPETITIVE INTELLIGENCE CRM / LOYALTY IT EFFECTIVE DSTAKEHOLDERS ATA GURUS SALES OPERATIONS PRODUCT FINANCE CUSTOMER FACING TEAMS SALES CONTACT CENTER STORES 1

2 When planning your outreach, it can be easy to overlook the less visible, or less vocal, stakeholders who might not have requested the data you seek, but who may be impacted by your research results. Overcome that by venturing outside your comfort zone and talking to managers and peers in departments with which you might not have much contact. In the same way you seek to understand what research data will help drive the businesses for the executives, look to this group to understand how to best approach and use the data and insight you uncover. Consider other employees down the corporate ladder. Middle managers, analysts, and customer-facing employees offer an insider s perspective on how the business functions. They can be a mine of information that you can use to sculpt new research, because they understand the business s needs and may also have their own ideas about what research to conduct and data to collect. These team members are typically closer to customers than the executives, and cultivating relationships with them will pay dividends, not only in identifying critical data gaps, but also in helping to make the research insight more actionable at the frontline. IT S AMAZING HOW MANY COMPANIES AREN'T DOING ANYTHING WITH THE DATA THEY HAVE ALREADY COLLECTED. -Kevin Jessop, Evolve 2. LINK THE WHYS TO THE WHATS OF BIG DATA The term Big Data can make some market researchers feel threatened. But, Big Data can mean big opportunity. In fact, the emergence of Big Data can bring greater visibility to the need for research and analysis. In discussing this issue, Evolve s Kevin Jessop remarks, It s amazing how many companies aren t doing anything with the data they have already collected. As a market researcher, you are in a key position to help identify the parts of Big Data that are most important, interpret what they mean, and do so in a way that brings insight to decision makers more quickly than ever before. One way to do this is to explain the "whys" behind the increasing volume of Big Data. Big Data generates a lot of data about what things occur, but rarely about why they occur. Thus, it can create more questions than it answers, making it difficult for executives to decide on a course of action. Focusing your research on the "whys" behind the "whats" allows you to link the two so the executives can make a better decision. 2

3 An example is Big Data in the retail industry, where retailers collect terabytes of customer data across channels stores, online, mobile, catalog, etc. Information shows that while some customers use only a single channel, the most profitable customers are omni-channel or across all channels. However, Big Data doesn t explain why customers behave this way or how the retailer might use this data to increase wallet-share from these customers. Thoughtful market research about these questions could explain the data and assist the retailer in adjusting investments in marketing and merchandising to drive additional revenue from both current and prospective omni-channel customers. 3. FOCUS ON METRICS THAT MATTER Our customers have repeatedly told us that the most effective research explicitly links the findings and results to the key metrics that drive the company's business. Your company's top executives intently focus on improving these metrics, and they actively seek insights to improve them. The more your research provides actionable insight into how to improve these metrics, the greater the impact you'll have on your business. Susan Topel, Director of Strategic Insights for a multi-line health insurer confirms this approach, My executives have placed much more value on our research as they have seen how it connects to the business metrics. They now look to my team to help them understand how to drive those key metrics. MY EXECUTIVES HAVE PLACED MUCH MORE VALUE ON OUR RESEARCH AS THEY HAVE SEEN HOW IT CONNECTS TO THE BUSINESS METRICS. THEY NOW LOOK TO MY TEAM TO HELP THEM UNDERSTAND HOW TO DRIVE THOSE KEY METRICS. -Susan Topel What are those key metrics? While they vary by company, most businesses share common metrics that are understood by leaders throughout the organization and industry. These metrics may be classified into three categories: financial, customer, and marketing. Below, we have identified some of the most common metrics in each category: Financial: revenue growth, cost of sales, profit, gross margin, operating margin, revenue per store, units sold, revenue per employee Customer: net promoter score, revenue per customer, orders per call, first call resolution rate, customer satisfaction Marketing: share of wallet, market penetration, conversion rate, average order value, revenue per customer, acquisition cost per customer, churn rate METRICS FINANCIAL CUSTOMER MARKETNG 3

4 As you design your research with input from your stakeholders, ensure that you understand which metrics they care most about and how they are calculated. Inquire about how the metrics are trending and the stakeholders explanations for the trends. An example might be, Why are customer acquisition costs increasing? That might lead to a follow-up question of, Are conversion rates declining? Then it may lead to a discussion about the types of market research that could help explain the trends, and the specific ways you need to craft your research. 4. PROVE RESEARCH ROI ANYTIME PEOPLE WANT TO PROVE THAT SOMETHING THEY ARE DOING IS MAKING A DIFFERENCE, OUR EYES LIGHT UP, BECAUSE THAT IS WHAT ROI-BASED RESEARCH IS ABOUT. Determining an accurate return on investment (ROI) for research is one of the most difficult problems facing researchers today. Achieving a positive ROI for every study not only brings value to your business, it is also another component in helping your research get the recognition it deserves. Mr. Jessop agrees, Anytime people want to prove that something they are doing is making a difference, our eyes light up because that is what ROI-based research is about. The difficulty for market researchers is gathering data that can be linked to business metrics and estimating the impact of results that might be more qualitative than quantitative. Here are a few tips to make this easier: Include ROI hooks in your research: As you better understand business and stakeholder needs, plan in advance what metrics you ll need to figure ROI. This might take the form of questions that ask for quantifiable information, like how much customers are specifically willing to pay. Or, it might be questions that make findings actionable at a customer-facing level, like discovering the perceived value of specific customer service improvements and how they impact customer satisfaction. Questions designed this way are more easily linked to the business key metrics, which will make it easier to estimate and measure ROI when the research is completed. Measure ROI on incremental profit, not on revenue: One common practice is estimating ROI using the incremental revenue that a project investment will generate. However, there is no faster way to lose credibility with your finance team than by claiming that research will pay for itself based solely on new revenue. Rather, ROI should be calculated using the increase in incremental operating profit. Ms. Topel expands on this imperative, You can t just look at a billboard placement and say, How many new members did we get from that? You have to look at the actual profitability of those members to determine the true ROI of the billboard. Assume a minimal scenario when estimating fuzzy numbers: Suppose that the cost of your research is $200,000. Calculate the incremental increase in revenue per customer, conversion rate, per customer acquisition cost, or other business metrics that would need to occur for the incremental operating profit to cover research costs. More often than not, the increase will be small and feasible, allowing you to shift the focus from research costs to the small amount of change from research insights that can improve the business metric. 4

5 Optimize your own research costs: Successful business leaders find ways to work smarter and more creatively with what they have. Consider tools and resources already owned by the business. Does the research require an outside panel of prospects, or, will a panel of existing customers from your loyalty program suffice? Is outsourcing to an agency the best answer, or would using an online platform make better sense and free up budget for more strategic agency work? Reviewing results from older research can also have far reaching cost impact and narrow the scope of any incremental research that might be needed. Double-check that the questions being asked haven t already been answered. YOU MUST COMMUNICATE RESEARCH FINDINGS SUCCINCTLY; TO DO THAT YOU VE GOT TO KNOW WHAT IS SUBSTANTIVELY IMPORTANT, AND NOT JUST STATISTICALLY IMPORTANT TO YOUR ORGANIZATION. 5. GET TO THE POINT After you ve consulted with stakeholders, explained the whys behind data, and identified and estimated ROI for the key metrics that drive your business, it is time to communicate your findings. You might be tempted to present all the details of your work and analysis all at once a shock and awe campaign to impress your stakeholders. Think again. Working with our customers, we are reminded time and again of the value of effective communication. Too often, market researchers overwhelm their audiences with detailed research reports. When presented this way, even great research can be shoved to the back burner. To drive impact, you must engage your audience and keep communication short, yet meaningful. Reference how your findings can immediately influence the business and individuals. You must communicate research findings succinctly; to do that you've got to know what is substantively important, and not just statistically important to your organization," says Ms. Topel. Here are a few ways to do this: Preface research reporting with short executive summaries bulleted takeaways that highlight key discoveries and their implications. These findings could be summarized specifically for different functional areas or stakeholders. Mr. Jessop may have captured this idea best when he said, Market researchers should not be data deliverers, but translators and strategists! MARKET RESEARCHERS SHOULD NOT BE DATA DELIVERERS, BUT TRANSLATORS AND STRATEGISTS! Synthesize results wherever possible. Place data tables or cross tabs in the appendix. Less can be more. Add illustrative examples and anecdotes that relate directly to research findings and emphasize specific points. For example, if findings indicate that customer service levels are deteriorating, a comment from a respondent strategically placed next to charts and figures showing a decline in customer service metrics give immediate credence to the finding. Keep comparative data small with careful thought given toward how to present it with clarity. 5

6 Finally, increase your pace and quantity of communication. Successful market researchers communicate with colleagues throughout their business on a regular basis. One approach might be a monthly lunch session that explains ongoing research and seeks feedback. Another approach would be an intranet portal where research is available with the ability to ask questions and provide feedback. Finally, regular one-on-one sessions with key stakeholders can be very effective. Conclusion Even in an increasingly competitive environment, market researchers have opportunities to drive tremendous business impact. Using these five tips will assist you in making the most of these opportunities, helping you and your team become trusted advisors that executives turn to for insight in making fact-based decisions. USA: CALL: HOURS: 10AM-8PM EST AUSTRALIA: CALL: HOURS: 7AM-5PM GMT+10 HONG KONG: HOURS: 7AM-3PM HKT UK: +44 (0) HOURS: 10AM-1AM GMT