[GUEST POST] The Truth About Freemium Research

By Paul Connolly (@Paul_NH, LinkedIn) from Nelson Hall (@NHInsight).

For over a decade, freemium has been the ubiquitous business model for fledgling internet firms and the developers of smartphone apps. Users sign up for free to enable basic features, and are then drawn into subscribing to various levels of premium functionality. More recently, the freemium model has been the subject of considerable attention in the B2B market research space, with some rather extravagant claims and unsound thinking being used to herald it. Let’s have a closer look.

Some of the self-styled new breed analyst firms, who hail from either a blogging or offshore background, would have you believe that freemium is a key differentiator. But freemium research is far from new, and is hardly ground-breaking. Have a look at almost any analyst firm’s website, and you’ll find free material. On the NelsonHall research portal you’ll find masses of high-quality analyst commentary, blog articles, webcasts, research summaries, and opt-in research newsletters (and for the buy-side, hundreds of NEAT vendor evaluation quadrants too) – all there for free. What matters is how good and impartial the free research is, and also what you find when you scrape beneath the surface of the free stuff.

One thing’s for sure. With over 40,000 global research reports across a large number of service line and industry-specific programs, NelsonHall has a wealth of high-impact research available, all of it based on original interviews with the buyers and vendors of outsourcing services around the world. And every piece of research tackles the tough questions and delivers insightful answers that help clients narrow the risk of decision-making in complex sourcing environments. Some of this insight we choose to give away. We always have done. We just don’t see this as a differentiator.

What is a differentiator is meticulous attention to detail, and a refusal to adopt anything other than the best methods of gathering and analyzing research data, and delivering insight to our clients. For example, we do not use on-line surveys, which are hopelessly inadequate for extensive data gathering in complex B2B markets. Nor do we believe that it’s possible to write outsourcing vendor profiles based on information entered into standard forms by the vendors themselves. That’s a sure-fire way of collecting lots of vendor marcomms and wishful thinking, but certainly no basis for accurate data gathering, let alone objective analysis.

And now for a reality check. Doing research the right way is not an inexpensive business, and has to be paid for one way or another. One way is to set a reasonable fee for all clients who wish to access premium research, and to grant them enterprise-wide access. Another way is to find a sponsor who’s prepared to pay a much larger fee for the privilege of first access to (or co-hosting of) the research. We take the former approach.

But here’s another very important way to look at the freemium issue. We challenge any organization to build a successful sourcing strategy based on free research alone. Googling for free information is a non-starter, and relying entirely on free analyst research doesn’t get you much further. We wouldn’t advise it, much as we wouldn’t advise web-based self-diagnosis of that nagging abdominal pain you’ve had for the last two months.

Some of the newer players point to their freemium model as evidence that they are changing the established order of the ‘legacy’ analyst firms. Really? Other than the fact that freemium is nothing new, the reality is that analyst firms founded on well-established principles, rigorous methodologies, and a refusal to dumb down what they do, are more important today than they ever were.

You may ask, does any of this really matter?

Well, not unless you happen to believe that substance is more important than form. In which case it matters rather a lot – your business could depend on it.

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4 Responses to [GUEST POST] The Truth About Freemium Research

  1. Yurii Saturday 20th February 2016 at 06:36 #

    An obvious trolling of HfS?

    • Robert Monday 22nd February 2016 at 10:20 #

      What does Freemium have to do with the role of an AR person? And yes, it seems there is a lot of focus with the NH executives is to talk trash about the competition. You missed the boat people, simple fact. Good luck, though, there are still some nice and intelligent folks left. Although, loads of people left.

      • Ludovic Leforestier Wednesday 24th February 2016 at 13:24 #

        I would suggest that understanding business models -including who pays for research- a must for any AR professional.

  2. Dale Vile Wednesday 24th February 2016 at 19:26 #

    Wow, there’s a lot of self-righteousness going around recently. I am not sure of the value of these kinds of generalisations, and the ones that clearly sparked this response.

    There’s a place for all kinds of approaches, depending on what you are doing, what you can afford, etc, and no analyst gets it right all the time anyway.

    I agree with Ludo – you need to understand the business model. I also agree with the bit in the original post about the dangers of online research, but even that is good enough for some things provided you recognise its limitations. I would also make the point, simply for comparison, that polling ‘clients’ or ‘attendees at conferences’ can also be misleading and ‘inadequate’ if you need a balanced view.

    Things I always check before using research myself are:

    a) The source, their reputation, track record and what motivates them
    b) The methodology (sample bias, data gathering, design, etc)
    c) Corroborating evidence from other sources

    There’s also the ‘sniff test’, which is easier if you are in the trade, but anyone can ask themselves whether a research finding sounds plausible as it presented.

    Anyway, let’s lighten up guys – there’s room for all of us out there, and sniping at each other is not cool.

    Cheers
    Dale