In their latest report on the state of the market research industry, ESOMAR estimate that just 4% of research spend is on business to business market research. That’s shockingly low. I took a sample of 400 companies which represent the UK business landscape:
- The 100 companies on the FTSE 100 Index
- 50 random companies picked from the FTSE All Share Index
- The 100 companies on the AIM100 index
- 50 companies from the Grant Thornton Fast Track Index
- 100 companies randomly picked from Companies House
This reveals that 45% of UK companies operate in business to business markets (and many more have some business to business component to what they do). Yet despite this, business to business market research accounts for less than a twentieth of total market research spend.
So why do business to business companies under-invest in market research?
Well 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%.
But in my experience, market research is less common in business to business markets and three cultural reasons seem to underpin this:
- 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
And if anything, these attitudes seem to be becoming more entrenched. The 4% spend on business to business market research which ESOMAR reports, has halved from the 8% recorded in the previous year. It’s time that business to business companies woke up to the importance of listening to their customers and invested in market research.