Professor Ravi Dhar, George Rogers Clark Professor of Management and Marketing at Yale School of Management, is a consultant to dozens of Fortune 100 companies, contributor of over 70 articles and frequently cited by Business Week, the New York Times, the Financial Times, the Wall Street Journal, The Economist and USA Today provides his perspective for Research World.
Ravi, what value do you feel that clients put on academic research?
I think the clients see a tradeoff between rigor and relevance. Traditionally, academic research while seen as rigorous was not seen as addressing specific client questions for three reasons:
- First, academic research tends to isolate a narrow sliver and examine it carefully. In contrast, business challenges by necessity have overlapping considerations that need to be addressed. This requires a deeper understanding of how to interpret any findings from an academic research, often it is taken too literally.
- Second, academic research with a few exceptions is not focused on marketplace realities and external validity as much as understanding the mechanisms and their impact. So, while academic research should be valued from the light it shines on the process, if clients use it, they often incorrectly expect similar results in the marketplace.
- A third reason I have often heard from our partners is that they see us as unbiased, if we don’t like some practice, they hear it directly from us without any concern of what it means for working together in the future etc. They find it refreshing!
Do you think this is different in the US to other countries? What differences and similarities have you seen or heard about from your counterparts in other parts of the world?
I see companies in Asia more curious and open to academic research. I think part of it is that they are looking for an edge and open to trying other things. Maybe it also relates to their general higher regard for academics!
In the US and Europe, it really depends on the silo: the insights and analytics teams are incredibly open, the marketing teams tend to be more resistant; they are a bit like superstar surgeons at hospitals, often resistant to change!
In terms of similarities, they are both now broadening the partnerships they have as they realize the traditional model is not working for them. This has created opportunities for companies that may not have scale but have identified ways in which to add value.
Which aspects of academic research have you found to be most appealing to clients?
Traditionally, academic research that has had the most impact was around methods: different ways of measuring consumer response: from segmentation, new product to pricing. Some of these methods have been introduced from academic research so many decades ago that they are no longer even considered academic.
I think the two big areas now are around behavioral science or behavioral economics and big data/analytics:
- Behavioral science allows the clients to challenge the basic assumptions (and ways in which they test) about their consumers and has found particular receptivity in CPG, financial services, and health care.
- Big data/analytics is an area in which clients are trying to build their own capabilities but just integrating the data is a challenge and companies are open to state-of-the-art methods that are often developed in academia or in partnership.
When clients approach you, what are their burning questions? And why approach you, rather than a research agency?
The questions are still around business challenge. The key is often to identify the precise research question. For example, across all the leading CPG’s I have heard a version of the following questions: how to premiumize their offerings, how to build new habits around a certain product, how to make its digital media more effective through personalization, broadening the occasions in which a product is used, etc.
Similarly, when working with pharma clients, they have a set of questions that are fairly similar across clients. Working with us is not an either-or with regards to a research agency. Often the actual research is still conducted by the agency but modified to address the frameworks we provide to the client.
Often, research is done with an unclear brief, and not surprisingly what is returned is a large tome with all sorts of finding without a cohesive core. Our objective is to help clients do what they are doing smarter rather than work exclusively with us.
To make academic research more relevant to the commercial community, what should academics be doing/doing more of/doing better?
I think there are many barriers to this.
First, academic research is becoming even more specialized with fewer academics taking a big picture view that is necessary even if subsequently you will address a smaller part of the problem.
Second, academics who are just starting out are focused on tenure that can take 6-8 years at most universities and tenure rewards only research that is peer reviewed. If you are successful, you are now good at what you do, and while some broaden out, most stick to the knitting. To do well, academics need to spend some time first understanding how research is used, what research is conducted, to identify areas of partnership. The AEF has a program where academics can spend a month visiting a company. More such programs are needed for both sides to get a better sense of opportunities for collaboration.
What are the dangers to the commercial community of not embracing academic research?
I think the commercial community traditionally has embraced academic research. I think it is less so over the last two decades and for reasons similar to the clients’ challenges in addressing marketplace changes.
First, the biggest issue is scale, everything in a large commercial company is set up for scale and changing means that today’s cash cows will be less profitable and that makes change slow.
Second, there is a chicken-and-egg problem, the commercial community says that we will invest more in this if the client will guarantee they will work with us. The clients say that I will work with you if you have the capabilities. This makes the investment process slow. Having said that, I think the commercial community has realized that this is an important area and the leading companies are investing here, whether reluctantly or having been convinced is unclear.
Third, it’s not easy as talent is hard to find, few academically trained researchers in marketing want to go and work for a company (even a Facebook or a Google, let alone a more traditional vendor). This is different from economics who train many more PhDs than marketing does. So, the process has been slow for many reasons.
Any other final thoughts, Ravi?
I think the value adds that apply to any product or services: faster, better, and cheaper is now being applied to research. In research, it is often hard to do all 3 at the same time, maybe two at best. So, the portfolio of the commercial community will need to address this: what are the kinds of research that are mostly commoditized and need to be cheaper and faster?
However, the client relationship will be driven by the better part of the portfolio, what can you offer me that others do not? While it is a disruptive period, I also think it’s an exciting period where both the clients and the commercial community is open to new ideas and methods.
