Leading up to IIR’s The Tech Driven Market Research Event, Leonard Murphy asked to interview me as part of a series of interviews with speakers at the event (on behalf of IIR and Greenbook). I agreed and suggested I interview him at the same time.
Many of you may already know of Lenny as he’s quite visible in various market research related social media, most notably in marketing MRGA and Greenbook. While Lenny and I are both rather active on social media, our strategies and modus operandi are quite different. Lenny reached out to me several times about NGMR’s participation in various initiatives including the GRIT (Greenbook Industry Trends Study). Initially I was very apprehensive to say the least. NGMR is a hobby of mine, albeit with definite benefits for Anderson Analytics. Still, I like the fact that it is not ‘Pay for Play’ like most of the other initiatives out there, and is totally non-commercial/free and without ads (even the FTO).
Still Lenny is not only relentless, but also extremely likeable. The more you talk to him the more likely he is to convince you that somehow collaboration is a good thing. Lenny is also extremely passionate about the market research industry, probably more so than anyone else I know. As he eats, breathes and dreams about research, he is also rather knowledgeable about industry trends. Therefore it was a pleasure conducting this interview with Lenny.
In terms of background we conducted the interviews simultaneously via email in a back and forth ‘boomerang’ type volley. So while the questions he asked me were quite different than those I asked him, I think you’ll find they are also interestingly similar. [If you’re interested you can also read Lenny’s interview with me on Greenbook’s blog or on the TMRE blog here.]
THCA: Lenny, you’re one of the more visible market researchers on various social media. Can you tell us a bit about what you do and why you do it?
LM: I guess that’s one way to put it! Really, I’ve somewhat fallen into this role.
In 2009 as I began to explore new business models based on what I saw happening within the market research industry and the transformation that social media and mobile has had on society and brand engagement I figured that I needed to explore those technologies more deeply myself. I quickly found LinkedIn Groups as an effective way to engage with colleagues to explore some of the ideas I was developing, and since I had been tracking the dominant trends in the industry for several years via the Research Industry Trends study it also became a natural way for me to share information that I found relevant.
Eventually the MRGA and the New York AMA/GreenBook both asked me to help them with their own social media efforts and out of that came the GreenBook Blog, which in turn created more opportunities like involvement with several events, and even a lively private consulting practice.
I’ve never been particularly shy about voicing my opinion, and although I am sometimes accused of being too visible, the reality is that lots of folks seem to find value in what I share across the MR-centric social ecosystem. As long as that stays true I guess I’ll keep doing it; if people get bored with me then I’ll stop!
THCA: I probably first became aware of you via Rockhopper research about six years ago. I remember seeing your ads, it was the same time Anderson Analytics started, and I liked your marketing and decided to add Rockhopper to the bunch of companies to keep an eye on.
Can you tell us a bit about Rockhopper?
LM: Thanks Tom; it was a pretty cool brand concept, wasn’t it? That penguin logo alone opened more doors for us than just about anything else we ever did! So, the saga of Rockhopper goes like this: I had another company before Rockhopper called MDM Associates, which was primarily a research consultancy. I had developed a network of other small firms that I collaborated with on projects. Eventually some larger opportunities came along and we decided we needed to form a new company to handle it. At the time we wanted to be known as an insight consultancy focused on using cutting edge web-based methods, and I think we did very well in living up to that vision. We also lived up to our brand; the Rockhopper penguin is a very cool, scrappy little animal and we tried to be that type of company. We punched far beyond our weight class! We were early adopters of virtual focus groups, Flash-based surveys, dashboards, MROCs, etc… We even experimented with text analytics for a bit!
The rest of the story is a text-book case of growing too fast, lack of early senior leadership alignment, focusing on project execution vs. business management, and being in the wrong place at the wrong time!
We grew really quickly and that was sometimes challenging to manage, and there was an increasing amount of disagreement between myself and the CEO at the time about how to effectively manage the business. At the same time we took a few large financial hits in our first year due to clients not paying us and some very costly vendor-generated mistakes that had a severe impact on profitability. By late 2007 it became clear that we had a cash flow hole that was going to be challenging to deal with organically despite significant revenue growth, and the CEO became more interested in pursuing a different opportunity than in guiding the growth of the company. We decided to look for M&A options and had a few decent offers, but eventually decided that we wanted to plow forward as is. In early 2008 the CEO exited the company, I assumed that role, we negotiated a variety of deals to address the debt issue that had been dogging us and we started to grow again. The future looked very bright and our growth pains were behind us!
One of our strategies was to grow within a few key verticals and Financial Services had become our biggest segment from a revenue standpoint. We had grown to a $3.5M company by the end of 2008, with 2/3 of that coming from that space alone. Then the Great Recession hit and we took it on the chin hard and fast. Our core clients slashed all of their budgets and we began to see the commoditization of research happen in a big way. In 2009 we only generated $1M in revenue, but the awful thing was that it was based on the same number of projects as we had conducted in 2008!
So, suddenly we found ourselves in the unenviable position of our revenue having dropped by 2/3s, we couldn’t service the debt instruments we had negotiated as a result, we had the same volume of work at drastically reduced price points, and we were trying desperately to keep an incredible team of really wonderful folks employed. We tried everything from radical payroll cuts and non-essential staff layoffs to aggressively targeting new prospects and repositioning the company. But finally I had to accept that the business was just untenable under these circumstances.
I also began to realize that the model we had been using was flawed; any business that relies on labor-intensive ad hoc work with long sales cycles within a highly commoditized market is going to have serious growth and business sustainability issues. Eventually I and my entire team decided that the Rockhopper model just wouldn’t work anymore so last year we wound down the company. I began to look at new business models and opportunities based on everything we had learned and the paradigm shift that was happening both as a result of the Recession and due to the massive shift in consumer communications driven by social media and the mobile revolution. That has been my core focus for the past 18 months or so; creating a new business model that is radically different from Rockhopper and from most other companies in the market research space.
The good news is that Rockhopper was a tremendous learning experience for all involved and I’ve been able to put those learnings to practical use for my own new business ventures and in helping others with theirs.
Whew! Sorry for such a long answer, but you asked….
THCA: Because of your affiliation with so many different groups (MRGA, Greenbook, BrandScan, Cambiar, TMRD … and most recently SurveyAnalytics), your frequent mention of many of these companies and your almost daily posts and tweets everywhere, some feel your social media style is a bit overly promotional. Also as it’s hard to understand the relationships you have with these different companies it’s also hard to understand what bias if any there is to what you say in your blog posts.
What do you say to these critics?
LM: Well, I wouldn’t call those affiliations, at least not any more than anyone else who serves on the Boards of multiple companies, trade orgs, or events is affiliated with them. As a matter of fact, I think you and I both are involved in about the same number of various organizations and in many cases we both are involved with the same things! Is that confusing for your contacts? And who ever said blogging is unbiased? I am not a journalist; my blogging is my opinion, thoughts, biases, likes, dislikes, blind spots, etc… All thrown out there for the world to see! I am incredibly gratified that others find value in my ramblings, but I have never claimed to have any special objectivity or position of neutrality.
I am the CEO of BrandScan 360; that is my primary role and I rarely discuss BrandScan 360 publicly or within my social networks. I may mention some of my ideas as they relate to that concept when it’s appropriate within the context of a specific interaction, but I never promote my company via my blogging.
I am also a consultant to the New York AMA/GreenBook and function as the Editor of the GreenBook blog. I have chosen that platform as my primary blogging channel for the same reason you developed NGMR; to create a place to express my views on what’s happening in the industry and hopefully engage others in the debate. That is also the core reason I post on multiple groups; to stimulate discussion on the topics I think are of importance to the research industry.
I accepted that role with the GreenBook because we shared a vision of what was needed to help the industry through this transition period, and I’ve been very lucky to have been given a platform through that relationship to do that. Every effort that I have undertaken with them has been designed to benefit the MR industry, while of course to also create a solid business model for GreenBook. I see no conflict between those goals. Of course my personal brand has benefited from the activity, as would anyone who has done the same thing. That is a very nice by-product that I try to be appreciative and protective of.
Because I try to stay abreast of everything that is happening within our industry and I tend to blog about my take on that, it often means that I write about companies that are doing things that I think are innovative, interesting, or impactful. That is NOT promotion; that is news with context. I guess I am the social media equivalent of an op-ed columnist for the MR industry! I admit that when I become a fan of a company I talk about them, but that is because I think they have something to teach the rest of us, not due to any conflict of interest or bias. Since I am a natural networker, I also try to align people and companies that I think have synergies or that I simply like. I am paying it forward when I do that, not looking for a payoff.
My LinkedIn and Blog bio are very clear about the various things I am involved with, but for the record I am the Executive Editor (and creator) of the GreenBook Market Research Industry Trends Report, I am on the Board of the MRGA, I am Chairing the IIR Tech Driven Market Research Conference and Merlien Institute’s 2nd International Conference on Market Research in the Mobile World, I am on the Board of Advisors for the MRGA and NewMR Virtual Festival. In the case of everything but GRIT, I was invited to participate due to my blogging activity and emergence as an influencer in the debate on the future of market research. Of course I advocate for those events when appropriate, but it’s because I believe in them, not because I am shilling for them.
I have no “affiliation” with Cambiar other than profound respect for the experience of their team. They are also one of many contributors to the GreenBook Blog. I am pursuing some opportunities related to BrandScan 360 with Survey Analytics, but I’d be a fan even if that wasn’t the case because I think they are doing some very cool things, especially in the mobile realm. I have posted the results of a few of their pilots I’ve been involved with because I thought the project was interesting, not to promote their brand. If it had been another company doing the same stuff I would have been just as supportive.
Last but not least while I’m on a roll, I am utterly convinced that the model for engagement for business social media is identical to that of any other media; if you deliver a consistent stream of quality content, you will build a following. If that flow of content is inferior in quality, intermittent, or limited in some other way then it decreases engagement. The response to my social media activities has been consistent growth of followers/readers and a high level of engagement from them, so that means I am doing something that folks like. Also, since LinkedIn appears to be the platform that most of the industry has adopted for discussions, knowledge sharing, etc… and we know that the 80/20 rule is a huge factor in LinkedIn, I am simply leveraging my position as a “core user” in the same way that virtually every other core user is doing it, including you buddy!
OK, how about a question that I can give a short answer to next?
THCA: In regard to Rockhopper, would you do it again, why or why not? And if you were to do it again, what would you do differently?
LM: Cool, this one is short and sweet! Probably not. Launching a traditional boutique MR firm in this climate would be slow financial suicide. To be successful in the future MR firms must have some combination of either true strategic consulting bench strength, proprietary and cutting edge technology offerings or a unique use of existing technology, and recurring revenue streams via highly desired and critically useful products or services. Some firms may be stronger in one area than others and that will power their growth and guide their evolution; in some cases they may not even be what we think of as MR firms. Being a “me too” company, regardless of how you spin it, won’t be a recipe for long term growth and success. The deck is being reshuffled now across the board, and we’ll see an awful lot of winnowing out, consolidation, and repositioning over the next few years in response to those trends. We already are, although it’s early still.
THCA: Fair enough, and couldn’t agree more. But indulge me in a somewhat silly question for a moment though. Knowing what you know now, if you had $1,000,000 and you had to start a market research consultancy, how would you spend it? What would your staff look like?
LM: Well, since I have been working to raise capital for a while now for BrandScan 360, it’s not that hypothetical! The majority would go towards technology infrastructure to support proprietary products and services, followed by developers, data analysts, and visualization engineers. Then comes marketing, sales, and support staff, preferably recruited from outside the MR space. I’d certainly want some heavy hitter consultants as well, but they would be doing double duty in business development and helping clients understand implications and outcomes. And by the way, we’d be focusing on emerging markets more than the U.S.; that is where the greatest opportunity lies, especially for emerging techniques like social media research and mobile.
THCA: Well you watch the industry rather closely, how exactly do you think it will look different say just 2 years from now? Which type of companies will be the first to disappear?
LM: I see the industry segmenting into Tech Providers (including DIY and field services), Insight Consultancies, and Niche Providers (Neuromarketing, Advanced Analytics & Modeling, etc..). The vast majority of the current MR supplier space is already working to reposition themselves as Insight Consultancies, and failing due to their commodity positioning with clients. I think this realignment of the MR industry will take 2-5 years, possibly less as the forces of social media and mobile migration speed up the pace of consumer cultural change and the concomitant demand from clients to engage with and understand global markets using insight generation methods that offer real ROI across the organization.
We may see the largest firms combat these trends by purchasing these new tech firms in order to replace their rapidly shrinking primary research revenue streams and having two different internal divisions: data collection technology services and strategic insight consulting. Many smaller MR firms will find it difficult or impossible to compete effectively under this scenario and will either:
1. Be absorbed into the corporate Goliaths
2. Refocus on niche market offerings
3. Develop their own innovative offerings that capitalize on the evolving needs of clients
4. Fold up shop
I suspect the fourth option will impact many of the current small to mid-size data collection-centric suppliers.
THCA: Also related to this, how do you see offshoring of market research affecting our industry?
LM: Offshoring is a business reality, an integral part of the global economy, and a viable model for many functions such as data processing, analysis, and IT services like programming, development, etc… For me the issue is not whether we should outsource, but like you with FTO, being transparent about it. Especially if it is primary data collection or customer service functions. I actually expect the pace of outsourcing operational elements to increase and focus on BRIC countries as well as other emerging markets. That will create an opportunity for firms in established markets to focus more on innovation, developing consulting expertise, and integrating with broader marketing organizations. That said, mobile and social media are wild cards in emerging markets and we may see a whole slew of advances coming from those countries driven by those technologies that could change the “balance of power” between established and emerging markets significantly. That will be interesting to watch unfold.
THCA: Honestly now, what do you think about the ISO thing ESOMAR and especially CASRO is now pushing? It’s so far removed from my business. Is this something that would have been useful to you at RockHopper? By the way, did RockHopper Offshore, and if so how did that work out for you?
LM: I’ve been very public in not supporting the ISO initiative; if you are doing big standardized web trackers its fine I suppose, but that is not what MR is about and it won’t be a key driver of our future evolution. There will always be that type of need and for those firms that focus on that business it may be useful. MR is not about production models anymore, so I think it’s about 10 years too late really. It would not have been useful to me at Rockhopper, it’s not meaningful to BrandScan 360 and I don’t imagine a scenario in the near future that would cause me to sign-up for it.
THCA: The collaborated media effort between you, MRGA and Greenbook, it’s quite different than NGMR which is completely not for profit. MR co. ad dollars these days are limited, so I’m wondering who do you view as the competition for content, advertising, directory listings etc.? Quirks, MRB, ESOMAR, MRA, ARF… or all of the above?
LM: Again, to be clear, I am simply a consultant to the GreenBook and an advisor to the MRGA. I do not play a direct role in their efforts; I just help them develop strategies based on my experience and insights. I do not directly promote their brands or products, although if I think they are doing good work that can benefit the industry I certainly will say that. I have done the same for lots of other organizations, even some that could be considered competitors for ad dollars.
For such a small industry, we have a high number of organizations, mostly trade orgs, that each offer targeted products and services for their members including directories and other publications, all of which are supported by ad sales. Honestly, I think it’s too much and I wish we would see some more consolidation (or at least cooperation!) between these organizations, but our industry is so fractured and politically motivated that it probably won’t happen. The GreenBook is somewhat uniquely positioned due to their connection with the NY AMA to work across all of these organizations from a content publication standpoint and that is what they are doing. They are choosing to focus on emerging technologies, new trends, and “next generation” research models as the core of their content strategy, and I think that differentiates them from the crowd of other publications. Ultimately the success of any of these organizations will be based on how well they serve the evolving needs of their readers/members/advertisers. I am sure each of the other organizations will find their own niche area and will either thrive or not based on how well they meet the needs of their constituencies.
THCA: You certainly are big on “collaboration”, and I have to give you credit for your relentless efforts in this area. As you know, I can be relatively competitive, even in areas I don’t consider core to my business. That said, how realistic is it to expect collaboration in an industry as fractured and ultra competitive as this one? It seems obvious to me that there simply isn’t room for us all, curious, what specific issues if any do you think might actually encourage broad cooperation? It seems to me that every issue that comes up, is so quickly grabbed and tagged by the trade orgs, take “online privacy” (whatever that means) for instance. Do you agree with organizations creating their own committees to create rules for their members and hopefully the rest of the research community to follow? Do you feel an MR company be innovative and do what is necessary to compete in the future of research by signing onto various “We will not” clauses? It seems that’s certainly not a strategy any leading edge company would take, would they?
LM: Thanks! I do believe in collaboration as an effective strategy and I work hard to build alliances with like minded folks to achieve mutual goals when I can. Sometimes it works great, sometimes not so much. I can be competitive, although I agree that you have me beat Tom!
As I said earlier, I think our industry is too fractured; I’d love to see a smaller group of trade orgs that represent our interests, and I also think they need to have a wider purview to include many of the newer processes that fall into the broad “strategic business intelligence/insights” function. In my opinion the AMA would be ideal since they have the widest perspective all of the components necessary for the successful reintegration of the research function into marketing organizations, and also have the largest client-side membership. In that scenario the MRA, CASRO, etc… should merge with AMA and they could be special focus organizations within the AMA. I’m not sure what the corollary organizations would be internationally, but I would hope to see the same thing happen between a large international marketing body and ESOMAR as well as the smaller national organizations. I think until we get to the point of having just a few trade orgs globally that can truly represent the interests of our very diverse (and getting more so every day!) industry, it’s just going to be a confusing mess and leadership will come from individual companies charting a new course, not industry associations. As those companies are successful, the rest of the industry will have to follow or be left behind.
I do think it is necessary to self-regulate and industry associations are an ideal way to do that, but too often we fall into protectionism and limited thinking rather than developing best practices and supporting innovation for the good of the industry. During this time of unparalleled transformation for market research, I think hobbling creativity and inspiration is a bad idea, and that is what I think could happen if we’re not very careful. It’s the Wild West out there and I think it’s way too early to define standard approaches and rules since we’re making this up as we go along and the industry will look radically different in a few years anyway. We can certainly work on ethical boundaries, but even those may be different than we have traditionally thought of since the walls between “marketing’ and “research” are becoming increasingly blurred by social media, MROCs, LBS-based mobile, gaming, etc… It’s those trends that will force new types of collaboration between various stakeholders as successful companies push the boundaries of what market research does, is, and can contribute to business growth.
THCA: “One Trade org to rule them” all eh ?
LM: Yes! We need more hobbits running the show since they resist the corrupting influence of the trade orgs better than the other races of market research! And I don’t think I can take that analogy further without really stretching and also embarrassing myself terribly!
THCA: OK, last question, as so many of these interviews get boring when they’re too much about business and research. So I’m going to switch it up a bit. I believe sometimes you can tell a lot about a person from the simpler things, like what they like and don’t like. So, if you don’t mind we’ll end with: What’s your favorite movie? A good book you’ve read recently (business or leisure)? Two countries, one high on your list of places you’d like to visit and one low on the list.
LM: Well, based on the last question it should be no surprise that The Lord of the Rings would rank up there, but it would tie with The Empire Strikes Back, The Matrix, and Hellboy. Yes, I am a geek. The best book I’ve read recently was the latest Repairman Jack novel; it’s a great series by F. Paul Wilson, kind of a mash-up of crime/horror/thriller. Again, I am a geek a heart. I would love to visit India; I have a real affinity for that culture. I have no desire to visit any of the lawless nations in South America or Africa.
THCA: Thanks Lenny, look forward to seeing you and everyone else at the Tech Driven Market Research Event in Chicago