Is market research recession proof?

Bob Skolnick, North American CEO of Synovate seems to think so in this month's Marketing News...

This heightened need to understand competitors and consumers may well prove a boon to the market research industry, despite the struggles of the economy at large. Bob Skolnick, North American CEO of Chicago-based market research firm Synovate, predicts "was abobe average growth" in the overall demand for data. Because of the demand for data, Skolnick notes, Synovate has been under greater pressure to yield applicable results.

"Client companies need to see smart research done to make sure they are satisfying their best customers and developing new business where they can," he says. "The market research business, while not recession-proof, is much less susceptible to budgets being cut."

Comments

David said…
That's all nice and comforting, but is it true, or is it wishful thinking? Sure, it's good to have an edge on the competitor at any point in time, but here are some counterpoints.
1) in a recession, there will be potential clients who go bust... and therefore don't buy research
2) there will be potential clients whose competitors go bust... and therefore don't need market research on their competitors
3) there will be potential clients who are on the line between surviving or disappearing and simply need to balance month by month. these people won't buy, even if they would benefit from it.
Josh M said…
David,

I think you're right that its not that simple. In my opinion there are two types of companies - the ones that will strategically try to battle the recession and others who will hold on for dear life. The latter will not buy, but the former may invest even more in insights.

Josh
peterh said…
hi - In my view, sector's such as Government, Media metrics and packaged goods are potentially likely to continue to spend, as there will be increased demand for accountability and more successful innovation. Other services based sectors may suffer during tougher times.
Diane said…
Actually, yes! I do think market research is recession-proof. I'm the Research and Marketing Director for a research firm in Manhattan called Tribeca Insights, which is a boutique company founded about a year ago. One of the remarkable qualities about our firm is that it's grown threefold in just two months; our clients, who are financial investment firms, consulting firms and non-profits, are definitely still in the market for industry research, particularly in this uncertain economic climate. Of course, business would be better were it not currently a recession, but the value of research is undeniably still there.
The old adage was that we tended to slow appraoching a recession and then pick up once the recession was underway. The theory was that clients cut all spending in the run up to a recession (trying to preserve their quarterly numbers), but once in a recession they value a small investment in research as a means to avoid big costly mistakes.

I'm not sure how well that held in the past, but all you have to do is look at industry surveys or rankings to know it is not true now.

Even as the industry suffers, some firms are flourishing in this tough environment. Some are just lucky, but I suspect most are succeeding in this environment for the same reason they succeeded in the good times...they provide research that creates real value for the client.

Until that view becomes pervasive, we as an industry will not be recession proof.
vivekcis said…
According to my opinion market research training would be efficient to fight against recession. If you know very well the present scenario of market then you can predict future aspects too.

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