This article appeared on August 9, 2021 on the GreenBook blog.
The B2B market research industry is in need of an overhaul. Through the height of the pandemic, buyers of research experienced first-hand how crucial it is to make strategic decisions quickly — and that getting the quality of data necessary to do so can be complicated.
Experian found that 98 percent of professionals see having high-quality data as either “extremely important” or “important” in achieving their business objectives. Despite this statistic, the multinational consumer credit reporting company also found that only 51 percent of professionals consider the current state of their data to be clean and fully able to be leveraged.
Clarifying the credibility problem
One of the central issues research firms come up against is finding professionals with the right experience to give useful insights. The professionals you’re looking for are already putting in 12-hour days, so why should they take time out of their carefully managed schedules to take a survey? Some market research companies will attempt to create incentives by offering as little as $5 to $10 for a 20-minute survey, but this comes with two serious issues:
- The financial compensation is just a drop in the bucket for the decision-makers you’re looking for. A CFO making a salary equivalent to $240 an hour is simply not going to expend the time and energy on a survey that only pays $15 to $30 an hour, because the value case is just not there. This means your recruitment net is missing a significant number of professionals that could have provided the desired insights.
- The professionals you lose out on leave room for deceptive consumers. These unqualified individuals can fake their way in and submit misleading information that deeply pollutes the data pool. This type of fraud is typically only uncovered once the data is being analyzed and clear inconsistencies are identified.
It’s still a universal truth that you get what you pay for, and these two issues based on failing to properly incentivize recruitment targets ultimately result in bad data that costs businesses an average of $9.7 million to $14.2 million annually, according to Gartner.
The case for custom recruiting
Currently, the B2B research marketing landscape is made up of companies that operate at one end of a spectrum. On one side, you have the expert networks, a fixed network of individuals built over time. The biggest network is 20 years old, yet they only have around 500,000 experts that cover all industries, geographies, roles, and titles. The professionals are of adequate quality, but there isn’t the coverage or scale to result in a go-to partner, and it’s common for the recruited professionals to only match around 60 percent of what the client is looking for.
On the other end, you have panel providers that may have millions of possible respondents. However, these panels are B2C-centered and then poorly retrofitted to fit a B2B model. The result is a pool that simply doesn’t provide the business knowledge necessary to provide value. Due to the specificity needed in B2B research, there is truly no such thing as a B2B panel in the traditional sense. These retrofitted panels are notoriously susceptible to fraud from people looking to make some quick cash.
NewtonX has seen the credibility and clean data problems plaguing the industry and is taking a different approach to solving the issue by precision-targeting professionals and offering fair compensation. We leverage an open network that draws on multiple professional databases, constantly scanning for professionals that match what businesses are looking for to deliver the freshest data. We only reach out to those who meet our multi-layered verification process, completely eliminating the issue of fraudulent responses.
When we find professionals that fit client-set criteria, we incentivize thoughtful participation by offering compensation at a fair market rate set on industry benchmarks and scaled across seniority. That’s how we are able to attract and engage CFOs, CISOs, and other senior decision-makers. This approach allows us to provide the newest, most relevant, and highest quality data at scale.
Reframing market research value
Some companies get stuck on the idea of spending a certain percentage of the research and development budget on market research. Rather than quantifying how much money to spend, companies should be determining the value of what they are trying to assess. If you’re trying to assess a $10 million or $100 million decision, spending $200,000 to get high quality is nothing compared to the value of the assessment.
What’s the point of cutting corners on quality just to increase quantity? Saving a few thousand and getting a larger data set of poorer quality is a dangerous gamble, and it’s almost always more effective to pay more for better quality data in the first place. There are countless stories of companies running research, making decisions based on data that was completely wrong, and having a product completely fail in the market. In many cases, NewtonX has seen this first hand. We’ve re-run research and the findings revealed huge flaws in the initial data collection that led development in the wrong direction. Investing in high-quality research from the beginning helps ensure that time and money are not going to end up wasted.
Moving toward an efficient research future
Buyers are realizing that market research can be a bigger source of value and are losing patience with antiquated methods of research that are clunky, inaccurate, and inefficient. The leading firms will be those that leverage open network technology to deliver consistent, fraud-free data at scale and on tight timelines. For research firms that frequently target high-level executives and want to extract the most valuable insights, developing a new recruitment and compensation structure is the way forward.