B2B Spending on Market Research Low…and Going Lower?

A recent survey by ESOMAR* estimated that just 4% of market research spending is on business to business projects. Perhaps, even more shocking is the fact that this year’s latest percentage is DOWN from last year’s 8%.  Andrew Dalglish of Circle Research has a nice write up on that which puts it in perspective.

*For those of you who have no idea who or what ESOMAR is, the following is provided: ESOMAR stands for World Association of Opinion and Marketing Research Professionals (formerly European Society for Opinion and Marketing Research).

The 4% level is shockingly (maybe even unbelievably) low since approximately 50% of businesses in developed countries are fully or partially involved in business-to-business marketing. (Editor’s Note: I don’t believe it is that low, either.)

Thankfully and with full attribution to Andrew, there are a number of points to consider, before all the B2B market researchers start jumping out of windows.

As Andrew writes, “First off, the data may be distorting the true picture a little. ESOMAR’s 4% figure relates to the percentage of market research spend, not market research projects. As business to business market research requires smaller sample sizes than consumer studies, this tends to make them less expensive than their consumer counterparts. This means that the proportion of business to business market research projects may actually be greater than 4%.”

Think of it this way. If you are a manufacturer of big jet engines and you want to research among prospective customers , your research universe is probably less than 100 of the major international airlines. On the other hand, if you’re researching flier interest in having a wifi internet option onboard during an international flight, the total universe is many, many millions. Guess which research project costs more.

But Andrew has some additional considerations that may explain (and question) the 4% number, specifically:

  • “Business to business purchases are seen as ‘rational’ which can lead to the mind-set that “it’s obvious what customers want, so we don’t need to ask”
  • Business to business companies are often ‘engineering’ led. This can lead to a ‘build it and they will come’ mentality and an internal focus
  • In business to business markets customer numbers are limited and relationships with sales teams close. This can lead to assumption (“I know my customer”), subjectivity (“I’ll ask them next time we speak”) and protectiveness (“that’s my customer”), none of which are conducive to conducting objective, independent market research.”

Maybe with all the above in mind, business-to-business marketers should think about investing MORE in research. Those that  do may find they get to know and understand their customers and markets better, and for them … that will translate to business success.

Read more at http://www.business2community.com/b2b-marketing/business-business-market-research-just-4-spend-01844119#DOXwZHO6ETFKIzhG.99