There’s a misleading finality that comes with making a sale. Though, for merchants, individual purchases are the basic building blocks of success, every finalized transaction harbors uncertainty over whether a customer will return.  A company that only sells to each consumer a single time will soon exhaust its pool of prospective clients. In that sense, the initial transaction between buyer and seller is but a prologue to the overall concern of marketing. Few businesses can sure their customers will continue to engage with them. There are always competitors offering similar products or services. 

Some may be bigger, flashier or more convenient. We live in an age of disruption. How can marketers ensure return visits amid all this uncertainty?

For several decades, part of the strategy has been rewards programs: promotions designed to boost consumer frequency by admitting them into an exclusive discount club. A well-designed rewards program can help induce customer loyalty, impressing a top-of-mind mentality on consumers’ thinking. Conversely, rewards-program misfires can, at best, fail to make an impression on shopper behavior, and, at worst, harm the provider. Witness what happened earlier this year when Starbucks announced modifications to its longstanding rewards program. The changes triggered consumer outcry severe enough that Starbucks’ brand perception fell 50% in eight days following the rollout, according to market research firm YouGov, and even prompted a major European bank to downgrade its outlook on the coffee giant’s stock.

Rewards programs are an old concept. Early programs included —paper coupons distributed to customers at grocery stores and gas stations that could be used to redeem catalog items. In their heyday, S&H Green Stamps operated 800 nationwide redemption centers and printed more stamps than the Postal Service, .

By the 1980s, the genre was reimagined by airlines looking to gain an edge over the competition. “The airlines really created a much easier way for customers to earn and keep track of the points that they were accruing from various sources, and a set of redemption options that, as it grew beyond just airline tickets to include merchandise and things like that, really taught [customers] they should and could share in the value that they created for companies,” says , partner and global practice leader at Boston-based . “It taught them to pay attention to where they shopped, what they bought and whether they were maximizing the earning potential in these earning programs.”

The digital age ushered in the next phase of transformation. Digitization allowed companies to link a rewards account to a specific customer by attaching a user ID. Mobile devices enabled brands to collect data and model profiles in real time.

“The thing that changed in the 2000s was that as technology improved, and the ability to create and support rewards programs for individual retailers become much more cost effective,” Markey says. “Retailers become much more interested in creating their own programs primarily for the purpose of identifying individual customers that came into their stores—capturing information about what they bought and how often they came in—and using that as the basis for making more targeted offers to create more incentives for customers to change their behaviors in ways that would be profitable.”

Rewards programs are being redefined again. As the investment threshold to set up a rewards program lowers, more businesses of all types are offering memberships. What used to set some brands apart from the competition has now become standard practice. The spend-and-get premise that comprises a basic rewards agreement might not be enough to entice consumers to remain active over long periods of time. Marketers, in essence, are back to where they started. To separate their rewards programs from the rest of the pack, experts say, they will have to add another dimension.

Three-dimensional Values

Brands might offer a strong economic incentive to encourage participation, but it’s hard to get consumers excited about what could be considered glorified coupon flyers. To spark lasting interest, brands need to make the payoff worth signing up for.

“There are an awful lot of loyalty programs out there today that I would put in the category of frequency programs. They’re what I’d call purely economic value propositions where you shop three times and get something, or buy nine cups of coffee, get the tenth one free,” says , senior vice president of loyalty customer experience at Texas-based marketing agency . “It’s like any other relationship you have in life. If all it’s based on is monetary value, there is not a very deep or rewarding relationship there. You’ve got to get more into the relationship and the emotional side of things.”

Markey agrees, saying that the most successful rewards programs are drawn up after companies have determined program objectives and developed a strategy to meet them. “In the average rewards program, the terms are set up based on what a rewards-technology vendor’s system can do easily. 
 While those are probably OK because they, at least, get the customer to identify themselves at the point of sale and allow you to capture the data, they’re not providing differential value for differentially valuable behavior,” he says.

“In a more successful rewards program, the company spends a little more time defining what success looks like from a strategic perspective. Based on what those objectives are, the retailer will then design the program to deliver value to the customer’s earning potential in a way that increases the likelihood of getting the right behavior from the right subset of the customer base,” Markey adds.

According to Markey, there are three components that drive the best rewards program. The rational value, or monetary proposition, is a component, but it’s also supplemented by two more visceral values: experiential and emotional.  

Experiential values involve providing members with access to unique events or opportunities that would be difficult or impossible to obtain without the help of a rewards program. This can entail either a privileged place among customers—a spot at the front of the line for hot products and offers, for example, or access to a personal shopper—or they can work towards desirable “bucket-list” goals like meeting a celebrity or even a chance to fly on a suborbital shuttle. These situations evoke strong desires in consumers. Instead of a discount card, a membership becomes a passport to party.  

Emotional values create an attachment component that consumers will invest their personhood into. This can be done by offering different status and prestige levels that carry built-in bragging rights with family and friends. Or it could be a more heartfelt pitch.

Bartold recalls taking this approach when he worked on program four years ago. “Walgreens made a change from their tagline being, ‘On every corner.’ It was basically a point of distribution and a convenience message. We’re close by. Come see us,” he says. “As we were getting to design a loyalty program, they decided to make a major change in terms of how they positioned themselves in the marketplace. It went from ‘On every corner’ to ‘At the corner of happy and healthy,’ much more an emotional level of tagline than ‘On every corner.’ ” 

The updated tagline reflected a strategy that Walgreens incorporated into its loyalty programs: health. A major initiative of the Balance Rewards involves offering customers health-tracking programs to monitor stats like weight loss, blood pressure or glucose levels. The soft tagline packs an emotional wallop when compared to the potentially serious subject matter the rewards program encroaches on.

“ ‘At the corner of happy and healthy’ says, ‘We’re going to try to figure out how we do things together and how we make our lives better together.’ Thus, the theme Balance Rewards. We’re here to help you find that balance,” Bartold says.

The Data at the Doorstep

To differentiate rewards programs from the competition, brands need insights into what consumers crave. 

“Until you really know who your consumers are, it gets a little tough to decide what the great things that you can do as a brand are and those things that may or may not hit the mark,” Markey says. “Most of that market research is done anonymously, using focus groups or a quantitative study. That hinders visibility as to who it is that’s responding that gives marketers some insight or context around why different groups are responding in different ways.” 

Rewards program data changes that. The back end of rewards programs can also serve as a powerful instrument for measuring consumer response to marketing. By tracking numbers tied to a unique rewards promotion, marketers can see exactly who responds. They can then align those responses to what consumers have purchased and what’s being talked about in social networks to build a contextual picture of users. The customer, once known, becomes infinitely easier to market to, and can form a deep connection with a creative rewards program that keeps him or her in an earning mind set.

However, this method of refinement is only available to brands collecting the right kind of data from customers. “So many retail brands that work in what I would call anonymous transactions don’t really know the consumer behind the purchase. All they know is how many transactions they had today and what the average basket looked like,” Bartold says. “To be able to have what we call open-source platforms—where it’s easier to connect to those partners, to connect to the social networks and to be able to bring data together to analyze that data in real time through rules engines and machine learning—to me, that’s the biggest advancement that we’ve got on the loyalty side. A mobile device, it’s great. It’s handy. It’s portable. It makes it easier for the consumer. For the marketer though, it’s what’s happening from a technology standpoint that’s really driving a lot of the new capabilities and innovation that’re happening in loyalty.”

To connect shopper behavior to relevant data that allows construction of customer profiles, some companies are turning to more involved rewards programs that connect to social media accounts or ramp up the level of member engagement. 

“Data is really at the heart of being able to provide personalized and unique experiences to your customers, whether that is based on the demographic data that they collect or a behavior that they observe when you interact with their brand,” says , chief marketing officer of multichannel loyalty and engagement software company .

A self-described “big believer” in engagement, Smith’s company layers engagement components, such as social media, video, website and e-mail newsletters, on top of points-based rewards systems. Smith believes the combination of the two will prolong customer interaction by fostering a relationship that extends throughout the life cycle of a product and beyond. 

“The program itself becomes the connective tissue for that common customer or that unique customer ID. When customers or the members are connecting their social accounts, engaging across all these different channels, it’s all tied back to that member program,” Smith says. 

Rewards vs. Loyalty 

Markey distinguishes between rewards programs and customer loyalty programs, despite the concepts appearing to be synonymous.

“The distinction is important to us because you earn a customer’s loyalty. You can never buy a customer’s loyalty. You can never drive loyalty, you can only earn it, and when we’re helping companies develop rewards programs, we’re quite cognizant of that, and we’re very careful to design the programs so that they create incentives for customers to take the right kinds of actions and behave in ways that generate value, but also won’t ever undermine the underlying objective, which is to earn the loyalty of the customer,” Markey says.

Can a well-crafted rewards program result in greater levels of customer loyalty? And does it matter who qualifies as a loyal customer if a larger percentage of shoppers are deeply engaged with a rewards program? The best rewards programs may be those that can attract and retain consumers who would otherwise be classified as passive or as detractors. To do that, marketers overseeing rewards programs need to define what success looks like; create enticing rewards that appeal to rational, experiential and emotional values; and market it to customers on their terms using data profiles.

 â€œ[Members] are not going to stay active in the program unless they understand what the value is to them, what the benefit is to them and they see the value,” Smith says. “They actually can get it.”

American Express

program is one of the longest-running loyalty programs on the market, and also one of the most dynamic.

“It’s a program that’s been around for years and years. It’s evolved over time, and I think they’re very sophisticated about the array of redemption options that they offer and the ways they use the program to provide promotional incentives for certain types of behavior at a certain time,” Markey says. 

Now available in 40 countries, American Express pioneered taking the basic rewards concept to the next level by the allowing members to transfer points to a large selection of airline and travel partners. In 2010, American Express became the first rewards card to allow card members to apply rewards points to Amazon orders. Two years later, American Express allowed points to be exchanged for e-gift cards and have since expanded their catalog of participating partners. In 2013, American Express created Use Points for Charges, which allows customers to pay off eligible credit card charges with accrued points. Its most recent innovation allows card members to use points online at Best Buy and Airbnb, and in bricks-and-mortar locations including Chili’s, McDonald’s and New York City taxicabs at the time of purchase. 

“We are always focused on innovating and providing our card members with ways to use their points at the merchants they care about most,” says , manager of public affairs and communications for American Express. “For us, looking for partners is about truly understanding our card members—from where they like to shop to the experiences they desire.”

UFC

Along with building value for brands, rewards programs also double as a far more essential service: market research. The data companies collect from users who sign up for rewards programs allow them to identify, segment and better target their customers.

Mixed martial arts promoting company did just that. “One of their challenges from the very beginning is that a lot of their business is done through pay-per-view, which is a disintermediated channel for them. They don’t control who buys the pay-per-view,” says Geoff Smith, CMO of CrowdTwist, which helped design UFC’s program.

“They didn’t have a great insight,” Smith says. “They used this loyalty program as a way to get a much better picture of who their fans were and to be able to provide a much more personalized, differentiated program experience than they could push through the other marketing mechanisms they had in place.”

Because of its unique product, UFC can offer incredible limited-edition or exclusive experiences, including ringside tickets, dinner with UFC president Dana White and personal workout sessions with one of the fighters.

“As you can imagine, they’ve got these super fans who are really loyal and engaged with their brand, and watching fighters and following the stories,” Smith says.

Hilton HHonors

If you build it, they will come. That advice is a bit clichĂ©, perhaps, but it’s a maxim that’s served Hilton Hotels well as it developed one of the most robust rewards programs in the hospitality industry. What began in the 1980s as an “instant win” scratch-off-based promotional program has become an industry benchmark, having just been ranked first in J.D. Power and Associates Hotel Loyalty/Rewards Satisfaction Report for the second year in a row.

All members receive instant benefits including exclusive discounts and access to digital tools including digital check-in, free Wi-Fi and a digital key available through the HHonors app. Personal HHonors credit cards can be obtained through American Express and Citi. There are more than 60 different airline partnerships that award member Hilton points at the same time they earn frequent flyer miles, and the chain also recently expanded its partnership with Uber.

Designations within the Hilton HHonors program also provide an emotional hook. By dividing loyalty members into tiers, the program offers prestigious designations, such as diamond level, that impart a status reward on top of any tangible benefits. 

According to , senior vice president and global head of loyalty and partnerships at Hilton, more than 52 million members are enrolled in the program, with 6.2 million sign-ups coming last year alone.

“We have actually seen our guests become more loyal than ever,” Weinstein says. “Our members are engaging with us more and enrollments are up by more than 90 percent year-over-year.”

Excentus

The quest to create rewards programs has led to partnerships where points earned at one business can be spent at another. Called coalition rewards programs, these collaborative efforts boost the appeal to members by expanding the reach and usefulness of any given points system. 

One such example of coalition partnership is , developed by loyalty program provider , which allows members to redeem points earned at grocers, retailers and restaurants at the gas pump, where they are entitled to a cents-per-gallon discount.

, executive vice president of program development, brand and communications for Excentus, explains how it works. “We have a relationship with a dining aggregator that brings us 11,000 restaurants across the United States. For every $50 that you spend across the restaurants—it doesn’t all have to be in the same restaurant—you save 10 cents per gallon. That’s up to a 20-gallon fill, so if you were to go in, have a lunch with a couple of friends and spend $50, you could save up to $2 on your total gas purchase,” she says.

The program does not prohibit members from offering their own separate rewards program, and it includes partnerships with Home Depot and MasterCard.

The Fuel Rewards Program also boasts a higher usage rate than most standalone rewards programs, according to Flynn. “On average our members redeem 78% of the rewards that they earn, and that’s compared to an industry where it’s usually about 35% of rewards are redeemed.” 

Belly

While larger-than-life experiences can be great for facilitating active use of rewards programs, smaller businesses can’t compete with the resources available to national brands. But that doesn’t mean they are completely left out of the rewards game. They just need to be more creative.

That’s where comes in. A digital rewards platform and CRM solutions startup, Belly started building rewards programs for mom and pop stores in 2011. Since then, it’s grown to a CRM solutions suite with 12,000 clients and close to 7 million users and counts convenience store giant 7-11 among its serviced brands. Along with rewards programs templates, Belly also helps businesses collect e-mail addresses and send out reminder messages calibrated to go out so many days after the last visit. There’s also help with social media integration and influencing Yelp reviews.

Businesses that join Belly are given a dedicated account manager, who helps them customize a set of rewards offerings. One all-star example, according to Belly’s director of words and reputations, , is Molly’s Cupcakes in Chicago, which allows members to smash a cupcake in the owner’s face.

“We really pride ourselves in offering these experiential rewards,” Beightol says. “We have a very detailed onboarding program. It basically walks our merchants through exactly how to develop their rewards suite.” 

Walgreens Balance Rewards

Drugstore giant Walgreens’ was launched in 2012. There were roughly 85 million active members as of August 2015. While the program does use traditional spend-and-get, rational components—customers earn 10 points for every dollar spent on select products (including prescriptions), with the opportunity to receive bonus points on featured products each week and use paperless coupons through the mobile app—there are industry-leading innovations as well.

In November, Walgreens became the first U.S. retailer to integrate its rewards program into Apple Pay, allowing users to purchase items in the checkout line using their iPhone or Apple Watch. Walgreens also partnered with MedM Health and Lumo Lift to develop health-tracking software that allows users to set health-related goals with the help of a digital health advisor. Tracking goals creates an incentive to frequently access the rewards program, and members are awarded points for making progress in meeting their goals. 

“Our goal is to delight our customers and to build customer loyalty,” says Walgreens media-relations manager . “The loyalty program should not only provide value, but also relevance through personalized communications, deals and offers.” 

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The Broad School of Business at Michigan State University is one of several U.S. universities committed to developing the next generation of marketing leadership through internship-based Master of Marketing Research Programs. In May 2014, Michigan State University hosted the Educating the Market Researcher of Tomorrow symposium during which representatives of the industry’s universities, clients, agencies and associations met to begin mapping this evolving space and the corresponding skillsets and traits that will be required of its future leaders. Building upon this, in 2015 Michigan State University created the Research Transformed Collaborative as an academic and industry partnership to begin vetting and quantifying related points of view.

ÂÜÀòÉçčÙÍű now begins to incorporate these findings, plus the perspectives of other industry sources, into the gradually expanding depiction of the market. The journey begins with this article building upon the annual examination of the survey-research market, with the additional outline of macro dimensions in its evolution. Our July/August global report will follow up with detail on the sub segments and the perspectives of the players in each.

Many business disciplines are similarly examining the development of the broad market-intelligence space. We are, however, approaching it from a “traditional survey research-out” perspective. In other words, how is this space expanding around us?

A Galactic Parallel

The direction of research transformation may not be as much a true evolution as it is a collision—not a collision in the sense of two objects physically hitting each other, but rather analogous to the collision of galaxies in space. When two galaxies collide, due to the vast amounts of interstellar space, they actually get enmeshed into each other. The final shape of the combined galaxy is different from the two original galaxies but takes on attributes of the dominant one. In our situation, the “galaxies” in the process of colliding are numerous and include:

• traditional survey research;
  
• advanced predictive analytics;
  
• a plethora of “productized” offerings for technology-enabled data collection and reporting;
  
• specialized visualization offerings;
  
• the fundamental handling and management of vast sums of Big Data;
  
• the shift from social media aggregation to social media integration and analytics;
  
• the merging of panel management, sample management and online community management practices.
  

The marketing research industry has seen disruptions before, perhaps the most significant being the move to online surveys (and by extension, mobile). This time, however, the disruption is not emerging only from within. The existence of more and varied data sources, and the sophistication of the technologies used to harness them, is inviting a broader range of disciplines to the development of solutions. This is why the number and breadth of these colliding galaxies is growing. It is not as much the marketing research industry moving toward these other disciplines but rather these other lines of business recognizing the existence and value of survey data and the proven statistical techniques being applied.

The market research industry, as we have known it for decades, is disappearing. It is being absorbed into a rapidly transforming collection of market intelligence sub-disciplines. 

For some of us, this phenomenon represents a threat: a question of whether the traditional insights role within our client organizations will remain; a question whether survey research will have a continued seat at the table; and a concern regarding the future valuation of our research company. 

For others, this dynamic represents unprecedented opportunity: the opportunity to deliver a far more comprehensive voice of the market; the opportunity to transform our agency business model and substantially increase its valuation; and a stair-step increase in the decision-making impact of the insights we deliver.

Regardless of whether this point of view elicits a positive or negative sentiment, today’s conference agendas, industry journals, and merger and acquisition activity leave little doubt that a significant industry transformation is underway.

The ÂÜÀòÉçčÙÍű (formerly Honomichl) Top 50 Gold Report has long been the industry standard for annually documenting patterns in the global business of marketing research, and the major players driving its growth. This will continue. But just as the market is transforming, so too will this report. Yes, we will continue to track and publish annual changes in the traditional survey research market, but beginning this year we will also explore the evolving marketing intelligence space in which we reside, and the expanding field of players in the emerging sub segments defining this morphing space.

Relatively little data to project such movement exists today. So in coordination with  and Michigan State University, ÂÜÀòÉçčÙÍű introduces a comprehensivelook at the evolution of this space within which we contribute and compete.

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The Broad School of Business at Michigan State University is one of several U.S. universities committed to developing the next generation of marketing leadership through internship-based Master of Marketing Research Programs. In May 2014, Michigan State University hosted the Educating the Market Researcher of Tomorrow symposium during which representatives of the industry’s universities, clients, agencies and associations met to begin mapping this evolving space and the corresponding skillsets and traits that will be required of its future leaders. Building upon this, in 2015 Michigan State University created the Research Transformed Collaborative as an academic and industry partnership to begin vetting and quantifying related points of view.

ÂÜÀòÉçčÙÍűnow begins to incorporate these findings, plus the perspectives of other industry sources, into the gradually expanding depiction of the market. The journey begins with this article building upon the annual examination of the survey-research market, with the additional outline of macro dimensions in its evolution. Our July/August global report will follow up with detail on the sub segments and the perspectives of the players in each.

Many business disciplines are similarly examining the development of the broad market-intelligence space. We are, however, approaching it from a “traditional survey research-out” perspective. In other words, how is this space expanding around us?

The Role of Survey Research Can Thrive

In such a market model the need for traditional marketing research remains. Various combinations will appear from these collisions, each requiring strong research expertise. Each will require either the collection or analysis of survey data. But the traditional marketing research disciplines risk being subsumed or marginalized by higher order offerings. Today’s large custom research companies may face the risk of being reduced to data collection companies unless they are able to provide these value-add capabilities involving data management, predictive analytics or visualization.

There are signs of this “coming together” all around us. It may be in the form of large players from within our traditional market, such as Nielsen’s recent acquisitions of  (analytics), (mobile intelligence) and  (neuroscience). Or it might be in the form of large players from beyond our traditional space such as IBM’s recent acquisitions of  (analytics),  (analytics) and (analytics). Or it might be in the form of nascent combinations forming in our backyard, such as MARU’s recent acquisitions of  and .

As we individually explore the possibilities of coming together to thrive in this expanding market intelligence space, we look for an understanding of what the new players are thinking; the perspectives of the leaders defining the emerging sub-segments of this morphing space. Do they share this perspective of coming together? Do they see themselves as part of an expanding marketing intelligence space, or as a new order of marketing researchers? Our July/August global report will begin to address these questions in detail.

—Michael Brereton  

This figure is based on the revenue of the Top 50 companies along with 135 other member companies of CASRO, the U.S. national association of research organizations. These companies are all for-profit, full-service research firms who are either U.S. companies or have a U.S. headquarters and operations.

Early this year, CASRO reached out to more than 75 companies to invite their participation in the annual top 50 ranking of U.S. research companies. These companies were asked to submit 2015 U.S. and non-U.S. research revenues, as well as the comparable data for 2014, in order to determine the annual rate of revenue growth or decline. If a company made an acquisition or divestiture in 2015, that information was disclosed and appropriate adjustments were made to ensure an apples-to-apples comparison.

The U.S. research revenue for the Top 50 companies in 2015 is $10,464.2 million, or 48% of the worldwide total revenue for the Top 50 of $21,782.2 million. Non-U.S. 2015 revenue for the Top 50 companies is $11,318 million, which is 52% of worldwide revenue.

The Top 50 companies provide profiles of their companies, describing their services and specializations, major accomplishments in 2015, significant developments and key initiatives in 2016.

The additional 135 CASRO members in the ÂÜÀòÉçčÙÍű Top 50 Report accounted for $712.5 million in U.S. Revenue: in 2015—an average of about $5.3 million per company. The non-U.S. 2015 revenue for these 135 companies is estimated at $239.5 million, which represents about 25% of the total worldwide revenue of $952 million for these 135 companies.

The total 2015 revenue for the 185 companies included in this annual report is $11,176.7 million for the U.S. and $11,557.5 million in non-U.S. Revenue: for total 2015 worldwide revenue of $22,734.2 million.

These 185 companies had an estimated 37,400 full-time U.S. employees in 2015.

2015 in Detail

This time last year, I wrote that 2014 had not been a “breakout year” for the U.S. research industry. While economists and other pundits had trumpeted 2014 as a year of economic recovery from the Great Recession, our industry did not join the recovery bandwagon. Instead, the 2014 growth rate of 3.2% was even lower (albeit modestly) than the growth rate in 2013.

I pointed out that, historically, the U.S. research industry has lagged behind in being impacted by and recovering from economic downturns. Notably, in the recent “Great Recession,” which began in late 2007 and continued to mid-2009, the U.S. research industry continued to grow throughout 2007, increasing its growth by 6.0%, and the industry did not begin its decline until mid-2008.

The growth rate in 2015 has increased significantly when compared to the previous three years, not only in terms of growth in revenue, but particularly in “real growth,” after adjustment for inflation.

U.S. Revenue: for the 185 reporting companies in the U.S. was $11,167.7 million in 2015—a growth rate of 4.9%. The real-growth rate for 2015 changes only slightly to 4.8% when adjusted for inflation, since the Consumer Price Index (CPI) for 2015 is 0.1%.

In fact, the real-growth rate of 4.8% in 2015 for all of the companies included in the Top 50 Report is the highest in more than 10 years.

2015’s low inflation rate supports the U.S. research industry’s real growth and, indeed, may forecast the turnaround for the U.S. research industry. Could the breakout years be 2015, 2016 and moving forward?

Another benchmark against which to gauge the research industry’s growth is the U.S. gross domestic product (GDP). The U.S. GDP shows the yearly growth of the estimated value of all the country’s goods produced and services provided.

Looking at the research industry’s history as compared to the GDP, the research industry has generally tracked ahead of the GDP, except for 2009, when the research industry dramatically fell behind GDP in the Great Recession. The research industry’s recovery from the recession tracked ahead of GDP in 2010 and 2011. From 2012 through 2014, however, the U.S. research industry trailed the GDP.

In 2015 the situation has improved remarkably: the U.S. research industry growth rate exceeded the annual GDP by 1.6%. This is the highest rate since 2008, which is just before the Great Recession. Could 2015 forecast a steady growth trend for the U.S. research industry?

2015 Revenue Increases and Decreases

There are 15 Top 50 companies in 2015 that experienced double-digit increases in revenue; 19 companies with single-digit increases; and 16 companies that are flat (did not exceed the rate of inflation) or had a decline in revenue compared to 2014.

Of the double-digit increase companies, Acturus (Farmington, Connecticut) realized the strongest increase in revenue at 43.8%. Acturus was established in July 2015 through a merger of two marketing research consultancies, The Pert Group and MSS.

Three companies exceeded a 30% growth rate: 

• Rentrak (Portland, Oegon), providing measurement services for movies, TV and home entertainment, had a 32.3% growth rate;
• Cello Health (New York), a global healthcare strategic marketing research firm, had a 31.7% growth rate;
• Hanover Research (Arlington, Virginia), which has a focus on education and health-care research, realized a growth rate of 31.2%.

Companies that exceeded 20% in growth in 2015 include:

• Kelton (Culver City, California), a strategic research consultancy firm, had a growth rate of 23.2%;
• Fors Marsh (Arlington, Virginia), which specializes in measuring, understanding and influencing the decision-making process, had 23.2% growth;
• Burke (Cincinnati, Ohio), which focuses on brand strategy and innovation in its research services, had a 22.8% growth;
• MarketCast (Los Angeles, California), which provides research services for the global entertainment industry, had a 20.6% growth rate.

Changes in Top 50 List

Acquisition and divestiture changes to this year’s Top 50 report include:

• AlphaImpactRx (#22 on last year’s Top 50) was acquired by IMS Health in February 2016.
• Vision Critical (#23 on last year’s Top 50) spun off its research and consulting division in February 2016 and sold it to Maru Group. The new entity is named Maru/VCR&R.
• RDA Group (#40 on last year’s Top 50) was acquired in July 2015 by Ipsos.

New additions to this year’s Top 50 include:

• Convergys (Cincinnati, OH), a customer experience and management company providing analytics and research solutions, joins the Top 50 at #24.
• Wood MacKenzie (New York), a research and analysis company for the energy, metals, and mining industries, is #17 on this year’s Top 50.
• Cello Health joins the list at #38.
• Acturus is #45 on this year’s Top 50.

Moving Up the Top 50

Seven companies moved up three or more positions on the Top 50. Mentioned earlier in this article are Kelton (from #47 to #39); Fors Marsh Group (from #50 to #44); Hanover Research (from #36 to #31); and MarketCast (from #35 to #32). Also moving up three positions on the list are: Decision Resources Group (from #15 to #12), providing information, insights, and analysis for the global health-care industry; Gongos (from #45 to #42), a decision intelligence company partnering with Global 1000 corporations; and The Link Group (from #46 to #43) offers a platform of services emphasizing both qualitative and quantitative research.

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The Top 10

Nielsen, IMS Health, Kantar, IRI, Ipsos, Westat, GfK, comScore, the NPD Group and J.D. Power represent 75% of the total U.S. revenue for 2015, accounting for $8,380.7 million of the total $11,176.7 million.

In terms of non-U.S. revenue, these Top 10 companies are even more dominating. The combined revenues of the Top 10 represent 88% of the non-U.S. revenue and 81.4% of the worldwide revenue for the 185 companies included in this report. Nielsen alone accounts for 1/3 of the total U.S. revenue for the 185 companies—22.2% of the non-U.S. revenue and 27.1% of worldwide revenue.

Interestingly, the Top 10 companies saw a 2.7% decline in 2015 worldwide revenue year over year, while the remaining 175 reporting companies (the bottom 40 companies in the Top 50 along with the 135 other CASRO members) experienced a modest increase in worldwide revenue year over year.

In contrast to the previous three years, 2015 presents the most positive outlook for continued recovery. A breakout from the recession is much more likely now because of how the industry is evolving and expanding. The growth of our industry is changing dynamically. There is much more focus on bringing in new capabilities and services and incorporating new technology and new approaches, including the market sectors that we are currently investigating and assessing (see Michael Brereton’s preface). There is less interest in mergers and acquisitions among companies within the industry. Indeed, as our industry expands and innovates, we may need to re-evaluate the definition of what is inherent to and organically a part of the research, insights and analytics industry. These considerations will change what we include in the scope of our industry and how we measure it, both for financial and business benchmarking purposes.

Whether or not you agree with this outlook or support the changes that are occurring in the industry, please share your perspective and opinion on how our industry and our businesses are changing. Though the ÂÜÀòÉçčÙÍű, CASRO and Michigan State University have different mandates, each has a commitment to serve, improve and represent the best interests and best practices of our industry. Your comments and suggestions are welcome.

—Diane Bowers

The Top 50 Company Profiles 

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Here, we dive into the questions that stem from each of the seven problems. ÂÜÀòÉçčÙÍű thought leaders discuss the “what” and “why” of each pillar problem, while we leave the door open indefinitely on the “how.” After all, marketing is about rolling with the punches. 

For every big problem, there are a million small solutions. What are yours?  Take quiz below to understand how your firm is doing. 

​Mary Garrett

Jeffrey Hayzlett

Eric T. Bradlow

Ric Sweeney

Sunil Gupta

Professor of Business at 

Scott Monty

CEO at 

Michael Krauss​

President at 

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Goal

As a new player in the mattress market, high-end manufacturer and supplier has relied heavily on word of mouth to make up for its low-budget advertising strategy. Since its founding, person-to-person marketing has been the biggest driver of its sales. Social media allowed the brand to engage with customers while also giving its loyal patrons a very public way to do its evangelizing. 

°äČčČő±è±đ°ù’s is to raise awareness of the brand. Not everyone is in the market to buy a bed—most people buy a mattress every seven to 10 years—but when they do embark on that buyer’s journey, it’s important to grab their attention, says Lindsay Kaplan, °äČčČő±è±đ°ù’s vice president of communications.

Action 

How bizarre is the idea of a talking mattress? That’s the question Kaplan asked herself when she launched the social media function for Casper in April of 2014. The idea was admittedly absurd, but says Kaplan, so was the idea of a mattress company using Twitter. “We found something really funny about a mattress on Twitter,” says Kaplan. “There are a lot of brands who use social media and take it very seriously and don’t find humor in the fact that they’re using Twitter to begin with.”

The first step was to determine the personality of the brand’s spokes-mattress. “We immediately knew a mattress would be up all night,” says Kaplan, “so that became the first element of °äČčČő±è±đ°ù’s Twitter presence.” The voice of Casper is geared toward a demographic that’s familiar with GIFs and the kind of syntax often found in memes. The account frequently responds to @Casper tweets with short clips of pop culture on loop. “It’s always about entertaining, elating and conversing,” says Kaplan, a strategy that differentiates the brand from many business handles that use Twitter to make a sales pitch rather than holding a conversation with consumers.

With musings like, “To get coffee or to get to work on time? That is the question,” and “Still don’t think it’s a coincidence that ‘morning’ and ‘mourning’ sound the same,” Casper, the tweeting mattress, supplies followers with a steady stream of witty one-liners usually about sleep (or a lack thereof) and coffee.  

While that may not resonate with every prospective customer, Jim Tobin, president of , says a bold approach trumps vanilla tweets any day. “The worst thing that can happen to a brand in social is to be fundamentally ignored,” he says. “If you know who you stand for and who you appeal to, just own that, and you’ll end up with a much bigger portion of your segment.” 

SEE ALSO:  Clearing the Path to Effective Content Marketing

The mattress brand is also challenging its competition with its #linksomnia tweets, a series of articles, videos and other content curated for those who resort to scrolling social feeds when they can’t sleep. “When they’re writing about insomnia, they’re very quietly making the case that maybe they could help you sleep better,” Tobin says. “It’s a strategy that Serta or Tempurpedic can’t copy. It’s a nice way to say, ‘Hey, there’s a very different mattress here,’ without talking about a mattress at all.”

Some content comes from , an editorial website covering the topic of sleep and published by Casper. With categories like science, health, travel and culture, Van Winkle’s makes sleep a ubiquitous conversation. Casper, Tobin says, excels at inserting itself into larger, relevant conversations as opposed to product descriptions.

Results

“What °äČčČő±è±đ°ù’s realized that a lot of brands haven’t is that Twitter’s not about their product,” says Tobin. “It’s about the experience the product facilitates and the reason the product exists. Sleep’s important to all of us.”

One reason °äČčČő±è±đ°ù’s content is so effective is that it’s relatable. Everyone can empathize with the after-lunch energy crash at work or hitting the snooze button on the alarm clock. The motto of °äČčČő±è±đ°ù’s social media department is, “Look at the struggle and the joy,” says Kaplan. The struggle is the pain of getting out of bed in the morning and the joy is kicking your shoes off, getting into bed and pulling up the covers. 

One follower claimed °äČčČő±è±đ°ù’s tweets convinced her to buy a mattress, and while that may be true, Tobin says it’s more likely the tweets served as an engaging introduction to the brand. “What they’re saying is, ‘I heard about this brand because of this Twitter account. I started to like the brand because of this account. I checked it out, bought it and came back to say you got me started on this path.’ ”

SEE ALSO:6 SEO Rules for 2016

°äČčČő±è±đ°ù’s Twitter presence has earned it a for excellence in social media. It’s also up for for social customer service and comedy writing, the latter it’s vying for alongside The Onion, Conan O’Brien and John Oliver. In 2015, the brand grew its Twitter following from 5,000 to 50,000 and its overall social media following increased by 1,311%.

The social media team behind °äČčČő±è±đ°ù’s Twitter account has grown as well. Kaplan says that growth was more methodical as the decision to hire in-house talent took patience. “When you work with an agency that is juggling a few brands and isn’t living and breathing your company day to day, you’re sacrificing the heart and soul of the brand,” she says. 

“It was one of the slowest hiring processes I’ve ever taken to hire our first social media team members, but it has paid off.”

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The appeal of segmentation has a lot to do with efficiency. Marketers can’t be all things to all people, so they focus attention, strategy and resources on those things they can best deliver. Marketing spending can be targeted to the most attractive business opportunities, where the impact can be greatest. Segmentation gives an organization a way to concentrate its marketing activities, based on selected customers and particular brand positioning elements. 

Segmentation can be especially useful for companies that have large potential customer bases and complex portfolios of brands. Segmentation helps sort out questions of who the ideal customer is and what will be offered when there is substantial internal overlap, cannibalization and competitive strategy.

Rapid changes in the marketing environment create direct challenges to long-held views on core ideas like segmentation. Digital technology fuels major changes in the marketing mix and in the nature of information to understand and track customers. A continuing stream of new ideas competes for the attention of marketers, advocates new strategies and practices and promises improved performance in market. 

Segmentation has long been central to many marketers’ strategies, but does it still have the same relevance as it once did? What benefits accrue for marketing organizations that adopt segmentation? Is there an alternative?

Digital Marketing

Marketing that relies heavily on digital tools has the potential to engage with the consumer one-to-one. This promises very informed interactions with significant prior knowledge of who the customer is and continuing information on the customer response over time. A segment profile, which describes the typical segment member, is less critical to have when you can address the individual with a tailored message.

SEE ALSO: How to Generate Loyalty Through Customer Segmentation

In situations where marketing relies heavily or solely on broadcast media to address the market, the case for segmentation is more compelling. With broadcast media there is limited information about the individual consumer. The portrait of the consumer via the segment lens adds valuable detail, even if it only approximates what each individual is like, and acknowledges the natural variability within segments.

Overall spending by marketers is shifting sharply toward digital media and is now close to surpassing the long-time media-leading category, TV. If digital media can be targeted accurately to the right consumer, at the right time, with the right product, the need for higher-level segments diminishes. 

However, there is still a question about benefit and message to deliver with this micro-level targeting. There are many highly targetable media available now, and often substantial behavioral and descriptive data on individual consumers. But are these tools being used to enable thematic consistency, brand strategy coherence and cross-portfolio management? 

Increasingly targetable media should improve the direct marketing efficiency substantially over mass media that is informed by segmentation. But is it sufficient? If all individual targeted marketing initiatives are effective at achieving their individual goals, does it mean brand performance will advance?

If all the individual programs align to an overall strategy, the answer is likely yes. But in practice, individual programs are not always integrated into a holistic view of brand strategy. We often observe multiple messages that don’t all resonate with consumers, for example, or conflicting messages for acquisition versus retention. An integrated view of the market and response can provide a platform to set goals and measure success. It’s especially important or markets that deploy substantial non-digital media.

Competing Ideas

Arguments against segmentation often come from other ideas about how to focus and organize marketing activities. Are there simpler or better ways to go to market that don’t involve the processes for creating and acting on segmentation?

In recent years, several ideas have been advocated as key drivers of business performance that don’t particularly require or depend on segmentation, such as brand penetration, path to purchase, customer lifetime value or usage occasion. Each of these has benefits and limitations.

Some argue that observed consumer behavior offers the keys to growth, often through law-like patterns. Brand penetration is viewed as the most important factor on which to focus marketing efforts. Making the product available tops the list for implementation. Segmentation is considered a distraction, or worse. 

Path to purchase emphasizes the interplay of the touch points a consumer has with the brand, purchase opportunities and the relative importance of stages of the journey over others. Successful orchestration of the pathways is based on how consumers navigate the shopping process, not an understanding of the consumers’ needs for products and services.

Customer lifetime value is based on knowing (or estimating) purchase amounts, acquisition costs, retention rates and duration, along with financial metrics and assumptions, such as profit margins or cost of capital. It can produce its own segmentation (e.g., the top few consumer deciles that produce most of the profit for the brand), but doesn’t require deeper understanding of why consumers might or might not be profitable. Success is defined by investing resources optimally in the customers who provide the best returns.

When the moment of consumption differs from the moment of purchase, occasion-based marketing can provide a framework for growth. It’s especially useful in markets like beverages, restaurants, hospitality, travel and personal care where the choices people make vary from situation to situation. Location-based digital media open up new opportunities to intervene effectively in real time.

Segmentation Success

Companies often select elements of several of these alternative practices, along with segmentation. They don’t know what the best practices are, so​ they assemble the pieces that make sense for them. In this scenario, what can ? It can synthesize and simplify the complex set of competing ideas and approaches. For example, are there unique paths to purchase for different customer segments? How do you reconcile customer segmentation with different occasion behaviors that cross segment boundaries? If brand penetration is paramount, how do you take into account that some segments present greater growth opportunities than others?

Segmentation can create architecture for implementation, such as identifying media and sales channels that are most relevant for achieving business goals. Segmentation that is limited to a single channel is unlikely to work for most companies. It’s apparent in retail, for example, that the strategic rationale for being in online and bricks-and-mortar channels is still being worked out. Despite the fast growth of digital media, it’s apparent that TV continues to play a significant role in concert with other media.

Segmentation can be a motivator for an organization to act in ways that improve the long-term health of brands. It can provide a roadmap for how the corporation will achieve short-term results across its portfolio of customers and brands, as well as how it will pursue long-term market development. 

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