Market Research at Microsoft: Evolution of the MR Department
Posted by Jeffrey Henning on Wed, Nov 04, 2009
At the MRA First Outlook Conference in San Diego, Reed Cundiff, senior director of central market research for Microsoft (and formerly an analyst with the Yankee Group), discussed how market research at the company has evolved and is evolving.
Prior to the creation of the Central Market Research Insights team, researchers had existed alone or in pairs in many different departments across the company. Job descriptions varied significantly; researchers had no career path within Microsoft.
Four years ago, the CMRI had just eight staff. It peaked at about 102 people in June, before being brought down by layoff to 97 staff. The upside of the downside, as it were, is that it has further accelerated the centralization of market research: departments that in the past were funding their own research are now turning to the central group instead. "We see that a lot of ad hoc research budgets have been cut; that is good for us, as there were many projects done outside of our research group." As a result, the organization is eliminating redundant and superfluous research expenditures.
The vision for the central research group is "to be a driving force behind Microsoft's business and product strategy" with the mission of delivering "strategic, fact-based insights that drive Microsoft's most essential business decisions."
The organization spends $80M to $110M annually on external research: the technology sector's largest research budget, according to Reed. Projects range from doing a market opportunity analysis for a v1 health care product to conducting a customer satisfaction survey with 100,000 respondents across 86 countries. CMRI devotes 3.5 FTEs to its research vendor management program, where they develop the preferred vendor list and do biannual reviews of the vendors (and ask the vendors to review the research managers they interact with). The result has been better use of outside vendors and consistent improvement. Before the new process, Microsoft would "run a pilot with a vendor, fall in love with that vendor, bury that vendor, then never do business with that vendor again!"
CMRI's strategy has three key components: to "deliver integrated insights" (primary research with market analysis), to "be a trusted advisor" and to "display business acumen". As a result, what Microsoft wants and expects from its internal researchers is changing [worth a blog post of its own!]: researchers need to be more consultative and need to specialize in a few focus areas.
In its research on research, the CMRI has adopted Six Sigma. "In the past fiscal year, we went through the Six Sigma process and we are reducing the number of defects study by study by study. We averaged 12 defects per final report in a six-month period to 3 the next period down to 2 most recently."
"We need to seize the opportunity. We are moving through a lot of challenges but to drive a fact-based culture, the timing has never been better for us." In his concluding remarks, Reed said, "We spend millions of dollars that affects hundreds of millions of dollars in marketing spend that affects billions of dollars in revenue. We have to get it right."