Richard Clarke, Vice President
Global Partnerships, VisionCritical
For decades, research has delivered powerful consumer sentiment and opinion into organizations – enabling these organizations to put the voice of the consumer into their decisions with the goal of creating more meaningful, successful, and effective products and services.
Methods and modes have changed over the years, with more and more complex solutions being created to get closer to the consumer truth at an ever-increasing speed. Incredible insight has been (and will continue to be) gleaned from consumers, informing multiple parts of clients’ business eco-systems. However, for many clients and users, research is seen as a cost center within an organization – something that needs to be done as part of a process or something that must be purchased as part of the broader vision of the business. The value of research is not generally associated as being an integral and fundamental part of overall business planning and development.
This is why whenever there is a downturn in business performance, or regional/global downturns (ex: 2008 Global Financial Crisis), one of the first areas to be questioned and lose budget is research.
What is the “value” that research is delivering?
There are many answers to this question, both objective and subjective, however, too few times does research itself get directly linked back to business performance. Ultimately, asking about the “value” of research is the wrong question. We should be asking: What is the “Return on Investment” of research? Because that is what research is: an investment into the organization, and not a cost.
There are many ways that Return on Investment in research can be measured, including:
- More informed/accurate business decisions – what is the cost savings from NOT doing the wrong thing or validating the decision (risk aversion)?
- Faster to market with the RIGHT product – how much does speeding up the development cycle save?
- Quicker reaction time to customer feedback and demand – what is the short- and long-term savings of rapidly reacting to the situation or of knowing your customers’ buyer journey and pain points?
For years, I have been an advocate of research and Insight Communities – the idea of engaging with individuals to answer the business issues at hand with engaged members who, ultimately, also drive advocacy for the brand. Insight Communities should not be considered a research “cost” but rather as an organizational asset that both informs business decisions and creates brand advocacy among members.
Forrester Consulting recently completed a Total Economic Impact™ Study on the ROI of Insight Communities to clients. In addition to the cost efficiencies and speed value propositions of Insight Communities, Forrester quantified the financial value of continually engaging with members in a community. The highlights include:
- $1.7M business value from increased customer insight
- 590% ROI
- $546K incremental profit and $4.7M increased sales from community members
- 39% increase in average order value and 70% lower churn rate from community members
- 75% reduction in cost compared to traditional market research methodologies
- 4-6x faster speed to results
This continues to reaffirm the belief that an Insight Community is not only an incredibly valuable tool in providing fast and efficient consumer insight, but also drives business action that results in incremental sales and profit for organizations.
These are just some of the reasons that organizations are implementing communities. The client stories about the impact of an ongoing Insight Community are powerful and continue to prove out the short-term and long-term Return on Investment. Shifting the mindset to consumer engagement is resulting in hundreds of organizations realizing significant returns and outcomes (click here for client stories).
Five years ago, communities were more of a niche solution or emerging technology but, according to the latest GreenBook Research Industry Trends Report (Q3 2017), 82% of respondents stated that communities were either in use (60%) or under consideration (22%). This has led GreenBook to no longer believe that they are an emerging solution but are, in fact, a mainstream solution:
“In future editions of GRIT, it is likely that online communities will also be removed from “emerging methods” now that it is mainstream.” (GRIT Q3/Q4 2017).
Ultimately, these two pieces of evidence indicate that an Insight Community is not only a solution that spreads efficient business insight across organizations but is also an asset that drives revenue and profitability – thereby attaching a real-world ROI to the value of the asset.
Feel free to contact me to learn more about how an Insight Community can become your most powerful asset.