Keynote at DAIS by Kristin Luck

We need to get the industry "enkelfähig"

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Kristin Luck is founder of ScaleHouse and Vice president of Esomar
© Kristin Luck
Kristin Luck is founder of ScaleHouse and Vice president of Esomar
American Kristin Luck will deliver the keynote at the Data Analytics & Insights Salon. As a specialist in mergers & acquisitions, she can take a meta-perspective and knows not only the research but also the economic situation of the industry. At DAIS, she will reveal dos and don'ts for survival.

How do you assess the current situation of the market research industry? I have a message of recovery and hope! 2020 was a challenging year, to say the least, for the insights industry overall. The abrupt impact of the pandemic on the overall economy brought the industry to a near standstill for a period last spring. That said, we remain a nearly $80B industry. Although ESOMAR originally predicted up to a 30% downturn in research revenues, a stronger third and fourth quarter than predicted (particularly among tech and digital businesses) have generated current indicators of an overall 6% decline, with the industry not returning to 2019 turnover levels again until 2022. The performance of the tech and digitally- enabled segments masks the negative impact of the pandemic on the established part of the industry that we see in 2020 – a 15% downturn in contrast to the 9% growth expected across the digital and tech-enabled segments. I think the definitive impact is still yet to be seen, but what CAN be confirmed by both forecasts and industry experts’ perspectives is that the pandemic is fueling the industry’s revolution, serving as an accelerator to the dynamic shifts we were already seeing – the increasing divide between digital or technology focused segments and the established market research segments.

There seems to be a great deal of interest from management consultants, private equity firms and investors in data analysts. Does this harm the industry, or is it harmer a great opportunity? Private equity and venture capital firms continue to invest in the industry – with a particular focus on technology transformation and mergers. Early-stage analytics firm Quantilope raised $28M last July in the height of the pandemic. Long-time industry player Confirmit was bought by European PE firm Verdane, before going on to merge first with Dapresy and now with FocusVision. Qualtrics recently IPO’d at a staggering $27.3 billion valuation and Cint IPO’d on the Swedish NASDAQ at a $1.21 billion valuation. As you can see, there is an incredible amount of venture capital and private equity money coming into this vertical, backing (in some cases) methods and technology platforms created by teams that lack research acumen.

Increasing access to research education and mentoring is an incredible opportunity for our associations (both local and global) and is of utmost important to ensure that the research industry is truly delivering sound advice that can impact both strategy and execution. 

What should a forward-looking market research firm do, what should it call itself, what features should it develop, where should it invest? The pandemic and subsequent economic impact took many firms by surprise. I think many traditional service-based research firms, suffered more than tech driven firms did, however, there are strategies the can be implemented to buffer a downturn. First, services-based firms need to ensure their client base is diversified and that they have low customer concentration, such that the opportunity for revenue volatility is reduced. Second, focus on creating recurring revenue streams. Many services-based firms operate on a project-by-project basis with no revenue guarantees. I think there is a misnomer that only SaaS firms can generate recurring revenue when that is absolutely not the case. 
Kristin Luck
is an American consultant specializing in the market research industry. She is the founder of ScaleHouse, an growth strategy and M&A advisory firm. Previously, she was Partner and President/CMO at Decipher. Luck is founder of Women in Research and vice president at the world association Esomar.
Third, be open to strategic partnerships and collaboration to drive new products and services. If you don’t have the resources to invest in new product development, then explore opportunities to co-create. Lastly, get strategic. Market research firms often lose engagements to big consulting firms simply because we’re not taking a big picture view of a client’s business. Taking a more holistic approach, rather than just focusing on a particular business issue, can reposition market research firms as value added partners rather than as research vendors. 

You are running for President at Esomar. What are your goals for this position? What does the industry need to be ready for the future? A two-year term goes by incredibly quickly, so I am focusing on a number of initiatives we’ve taken up as a Council that have not been fully realized but are imperative if we are to grow as an association. First, I believe we must expand on Joaquim Bretcha’s current platform of “building bridges” so that we are a truly global association that serves our members on any and every continent, across multiple time zones and in multiple languages. This also means gaining a better understanding of the cultural nuances that drive in-country lobbying and legislation around data privacy and ethics. Second, we must bring younger researchers into ESOMAR so that, as an association, we remain relevant to the new generations that are driving the evolution of the industry they will one day run. Our YES initiative provides a pathway for young researchers but there is more work to be done to build this membership base and ensure long term engagement and growth. And lastly, opening our arms to data scientists as well as DaaS providers so that the importance of data quality and ethics is not lost as our industry evolves. I am a believer in using the power of “and” to gather deeper insights and by that, I mean, primary research AND other data sources. When we exclude these providers from conversations around data use and ethics then we risk diluting the value of market research, as behavioral and other ancillary data sources become more prevalent. I believe the German word or concept of “enkelfähig” ties all of these pillars together. It means doing things with our future grandchildren (Enkel) in mind. My friend Katja uses this concept in her work at B Labs in Berlin in connection with sustainable economic practices, but I believe it also ties directly to research practices. To ensure our industry’s future I believe it is imperative that we keep this concept of “enkelfähig” top of mind. We must invite the next generation of researchers and research companies in, while also ensuring we are leaving them with a sustainable and ethical research industry.

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