Alisa Hamilton

Alisa loves marketing research, her family, good wine, and puppies
(not necessarily in that order).

Market Research: Commodity or Consultancy?

Since the dawn of time, market researchers have struggled with balancing our work on the fine line between commodity and consultancy.  The pendulum has swung back and forth over the years, but we seem to be at a new crossroads these days with companies battling it out to stake out their own place on the continuum. Maybe defining both words would provide us with some context as we look across our own market:

Commodity: A good or service which can be supplied without differentiation across a market. Commoditization often occurs when there is diffusion of intellectual capital necessary to produce the good or service effectively.

Consultancy: A company or individual that provides specialized advice to other companies for a fee.  A consultant generally has wide knowledge of the subject matter beyond what a client could expect to find in-house.

When I look around the industry, I see four buckets of companies that balance commoditization versus consultancy to various degrees:

  1. The Big Dogs - You know who they are - IPSOS, Burke, MillwardBrown, ResearchNow, TNS, etc.  These players both benefit from and are challenged by their size.  Pressured by the market to turn big profits and by their clients to maintain a personal feel, they are sometimes betwixt and between.  They can produce work that feels like (and is priced as) a commodity, but find the right minds inside the monolith, and you'll uncover some very strategic thinking.  Thus, for the "big dogs," the answer can and will be different depending on the level of customization/complexity in your project, the team you have, and the specs you've set forth.
  2. The Specialists - Verilogue, VisionCritical, BuzzBack, etc.  These companies are built to do only a few things and to do them very efficiently.  While many of their offerings are highly commoditized, there is enough variability in what they do to require some sound research thinking.  Certainly their work isn't completely turnkey, but they rarely go too far out of their comfort zones lest they risk inefficiency.  "The Specialists" are as commoditized as we've seen so far, and customization is not their friend.
  3. The Little (Mid-Size) Guys - These are the small to mid-size companies, many of which used to be full-service generalists.  Unfortunately, this group is probably facing the biggest challenge right now as they try to stay afloat in an environment where clients put suppliers into different commodity boxes.  Clients want to know - are you this? or are you that?  Not specializing makes you irrelevant by process of elimination and being too specialized makes you undifferentiated from both "the specialists" and the "big dogs."  Of course, you can be consultative, but that makes it difficult to make your margins when every study is unique and every client high involvement.  However, the "Little Guys" have the greatest opportunity to make the leap from traditional research relationships to true consultative partnerships.  The challenge will be having the structure, staff, and processes to transform.
  4. The Tool Providers - Sample partners (SSI, GMI, eRewards), software providers (Kinesis, SPSS, Qualtrics, etabs), and service providers (Annik, MROps) all make it possible for the rest to survive and thrive.  Sometimes they offer overall efficiency and other times it's solutions to specific problems.  They tend to have a niche and play well in it.

Then, there's a fifth dimension popping up which is an interesting breed in and of itself - not really a research company, but a broker of sorts - zappistore is the first that I know of, and I suspect it won't be the last.  This is the closest we've come to the pure commoditization of research - select the type of study you are looking for, add in some parameters, and immediately purchase.  Don't get me wrong, commoditization has its place, but if this is the road that we are on, then everyone will need to pick a lane quickly or get left behind.

Where do you see our industry going - commodity or consultancy?  Which do you most frequently use?  Or do I have this whole thing wrong?

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