Private equity groups are hiring research and consulting firms to conduct primary research with increasing frequency. For those considering this trend or unfamiliar with third party primary research, it makes sense to describe what primary research is, how and why it works, who does it, and what to look for in hiring a firm providing primary research.
For Acclaro Growth Partners, primary research means candid, direct, person-to-person phone conversations with a wide range of industry experts in four vantage points of the industry: suppliers, competitors, third party experts (e.g., associations and industry expert consultants), and customers.
The best primary researchers are “Renaissance” men and women. They are knowledgeable about a wide range of subjects and are able to carry on conversations fluently, with interest, and in a way that generates enthusiasm from the conversational participant. Analysts build rapport with phone contacts and develop meaningful, interesting, and mutually useful conversations with their contacts.
Primary researchers typically rely on one or more of several motivators. People talk with researchers for the following reasons:
· To satisfy their own egos (“I know more than this consultant. I am the expert.”)
· To enjoy playing the role of coach or teacher (“You have it all wrong; let me explain what is really going on.”)
· To satisfy their own curiosity and need for intelligence (“This researcher knows more than I do; maybe I could learn something here.”)
· To help the researcher out (“You are under a deadline and you know nothing about this space? Let me help you out for a minute.”)
The process involves a multi-step process for jump-starting a conversation from scratch:
· Introduction – Primary researchers must identify themselves by name and by the name of their company.
· Explanation – The reason for the call. Primary researchers must tell the truth, but not necessarily the whole truth. For example, they could say they are studying the industry (but not hone in on the specific niche segment of interest). They could say they are doing market research (but not mention an acquisition).
· Hook – The interesting trend, dynamic, threat, opportunity, or other popular topic of conversation facing the industry. The researcher may mention that they have heard the opposite of what is actually occurring, or may compare trends in this country to those in another country, or may simply share the insights he has gathered. The point is to say just enough that the person on the other end of the phone simply cannot resist responding.
· Steer the conversation – By asking follow-up questions to what the other party has already said, the researcher covers a lot of ground without appearing to be working off of a script. The real answer to any problem is usually two or three questions deep.
The telephone conversations Acclaro conducts are useful because they are:
· Interactive – you can ask follow-up questions in response to what the contact has already said.
· Direct – you go straight to the horse’s mouth.
· Precise – you get the exact answer you need – faster and more reliably than through other means.
· Inexpensive – solid answers for the cost of a phone call.
· Recent – you may not be able to read about a very recent development in the industry, but you can ask about it.
There are four suggestions of capabilities or philosophies to look for in a primary research vendor:
· Experienced researchers – a team that has been conducting primary research for years and is not fresh out of college.
· Blind approach – eliminate the biases that exist when the contact knows which organization you are studying, or the identity of the client.
· Collaborative, interactive approach – to avoid having the research head off in the wrong direction mid-project.
· Actionability – Instead of a data dump, the research should lead to intelligence, which leads to analysis, which leads to options, and finally, a recommendation.
Comments