What the market research industry can learn from Formula 1?
In recent years, the market research industry has come up against various challenges along the way. We now find that ‘market research’ as a term is used less. This is something I wrote about recently in a latest blog post.
I am a big Formula one fan. Whilst the last race of the year was taking place in Abu Dhabi, I thought, what can the market research industry learn from Formula 1?
If you remember I wrote about what it takes to be a high performing market research agency. If you want to take a look. Click here.
What about this blog post?
However, this blog post is going to take that one step forward. Formula 1 is a fast-paced sport that has thousands and thousands of individuals working for the governing body. Including analysts and developers who work at individual teams like RedBull and Mercedes.
But what makes a Formula 1 team?
Similarly what makes Mercedes one of the top teams in Formula 1 history?
Therefore, I am going to take you through 4 areas how the market research industry can learn from Formula 1.
So let’s get to it.
A transparent market research industry
Whilst I haven’t been in the industry as long as others. I have found a mixture of transparent and non-transparent individuals. Data and information is king and queen in the sector. Therefore, it can be used to influence high-level decisions. In Formula 1 for example, you hear drivers telling directors that the car is not performing correctly. You see frustration from the sidelines. Due to the fact that winning and losing is between mini-seconds. Transparency is key. In the market research industry, this means telling clients what they want to hear, not what an agency wants to tell them.
Too many agencies are nice
However, many agencies create nice to have reported without actually thinking how they can help their clients on the bottom line. Helping them to improve the bottom line means telling the truth. If something needs improving, the industry needs to provide that information. Thus, it lends its self to the Return On Investment of market research but also Formula 1.
Providing the market research industry with an ROI
In Formula 1, losing 1 place can cost millions in revenue and sponsorship opportunities.
However, in market research, its slightly different which is why I wrote about providing an ROI for the industry. This blog post can be found here.
Individuals in the industry find it hard to provide an ROI from their work. The easiest and most sensible definition of return-on-investment is from the Entrepreneur.
For departments such as sales, it is easy to calculate a return-on-investment figure.
Calculating a Return-On-Investment
On the other hand, it’s straightforward to calculate a marketing return-on-investment because of the different metrics. Such as Buffer, Hootsuite but even Facebook can give marketing teams a return-on-investment.
For my blog, I take some return-on-investment top-tips from the Social Media Examiner.
There are 4 main points why we should look at return-on-investment:
- Understand the optimal scope and size of MR activities
- Develop and defend budget proposals
- Measure, track and improve performance
- Explain the tangible value of MR to stakeholders
Moreover, it is difficult to understand whether our time, money and resources are contributing to objectives when using market research.
The tricky beast
It is a tricky beast to work out. Despite the importance of return-on-investment for all businesses and departments. Market research has no gold standard or go to formula that can solve this dilemma.
On the other hand, one of the problems is that market research is very difficult to quantify.
The market research industry can only have a return-on-investment figure if someone uses the data. It’s an important concept that is sometimes forgotten about. Especially when you are juggling so many different projects. I have to juggle projects relating to different subjects, meaning it can be tricky to find the important figure I am most interested in.
What result has come from conducting market research?
It’s important to know whether the market research we have conducted has brought a result.
We then need to understand the costs and revenue in association with the change. Thus, we can calculate a return-on-investment from our market research.
We all know that it could take many months or years to actually know how our research has been used.
I would recommend putting notes in your diary, to follow up with individuals, to gain an understanding of how your research has been used. Importantly, don’t forget that some market research is conducted to provide a summary or an update. Therefore, change might not be necessary.
Hence, don’t always think that market research has to deliver a currency sign.
A 220 MPH Market research industry
So that we can provide a Return On Investment on our work, we also need to provide clients with data and information they can use to affect the bottom line. This means making more money!
In doing so, we need to be like a Formula 1 racing driver.
For instance, we need to be:
- Quick off the mark when clients would like answers.
- We need to second guess what clients would like before they ask.
- We need to be efficient whether that is using resource or/and technology.
Clients demand answers quickly. Many times in a client’s Insight teams, they have demands as well as us, meaning we have to influence decisions in their organisation. We need to provide the information in time and correct.
Data visualisation is key for the market research industry to grow
Finally, data visualisation in the market research industry has taken a different direction in recent years with technology and solutions to help such as:
Actually, let’s not forget PowerPoint. Many individuals think we overuse PowerPoint. Sometimes we do for sure. However, there are so many different tricks that can be taken by using the tool.
If you watch Formula 1, you would have seen all of the statistics and visualisations on the television or even on the analytics screens at the races. The market research industry firstly needs to ask the clients how they want to receive the information. Far too many times we rush into a situation and design something for the sake of it. Without actually asking the client what they would want to receive.
What can the market research industry learn from Formula 1?
A number of things.
We need to be transparent with our clients from the off. This firstly means we need to understand why they would like to conduct the piece of research in the first place.
If we don’t know the objectives, then we won’t know what to report on. When it comes to reporting, be honest and transparent.
Let’s provide our work with a Return On Investment figure.
Why should individuals use market research?
Speed is key for the market research industry but also our clients.
Data visualisation will become more and more important so clients can translate data and information into short amount of information that can be used by them but also other internal departments.