Last week I had the privilege of learning more from Christopher King about Sawtooth Software Inc. In case you missed that article, click below and learn about his work and influence.
Getting To Know My Mentor and Advice he Has
I recently had the opportunity to interview the Chairman of Sawtooth Software, W. Christopher King. He received his MBA…
This week he shared with me insights about the marketing research industry. His answers to my questions are beneficial to everyone who would like to start a business.
Below are the 5 questions that Christopher King answered about marketing research:
- How big is your market and what area of the market are you currently focusing on?
Recently one of the large data analysis companies, Qualtrics, sold for $7 billion dollars. I believe they were over-valued. There are several other large companies as well as smaller companies in our space. From a revenue standpoint, marketing research is a $76 billion worldwide industry.
Sawtooth Software focuses on a niche in that market called conjoint or choice data. We use advanced analytical techniques to collect and analyze data from consumers and predict choice. We believe the size of this niche (software, research, analysis, and consulting) to be about $1 billion. As a software supplier to this market, our revenues are a small part of this niche.
2. What do you feel is the most important innovation happening right now for your industry?
The marketing research industry is entering the era of big data. Instead of inviting respondents to take surveys online, we simply collect behavioral data. Google, Amazon, and many companies collect data on what people view on the internet, what they click on, and what they purchase. This data can be analyzed to look for trends and model consumer behavior. We still use the more traditional method of asking questions and then predicting their choices.
We have also seen a trend in our industry to move away from Windows applications, to SAS (Software as a Service) and subscription models. This presents challenges to keep our software advancing technically.
3. What other products and services are similar to yours and how are you competitive?
We currently “own” our niche. We are the big player in our small niche and no one has successfully challenged us. We keep our products “current” through our academic and industry relationships and by sharing information at our Sawtooth conferences which are held every 18 months. We have an in-house programming team that continually translates new ideas into products we test (by performing studies and benchmarks to see how well they perform) and then release these products to our customers and train them to use them.
We pride ourselves on our customer support. Our analysts can be contacted by phone or email and we frequently will train new users individually through Teams or other screen sharing products. About every month we also hold training workshops at various locations around the world.
The company Qualtrics has stated that they are adding similar products to their offering but their understanding, training, and support has not allowed them to make inroads into our customer base.
4. How often do you hold those conferences that will have people from outside of the States to attend? Is that a rotating event or it only happens here in the States?
We hold our Sawtooth Software Conference every 18 months here in North America (the United States or Canada). Offset to this main conference by 9 months, we hold a European Sawtooth Software Conference (again, every 18 months). Everyone is invited; a fee is charged for attendance. Research papers that will be presented at the conference are solicited about 6 months before the conference. The authors of the papers that are accepted receive free admission to the conference. We also have workshops and tutorials at the conference; a separate fee is charged for attending them.
5. Lastly, what qualifies one to attend the conferences you hold?
Attendees make their own travel arrangements and pay for their own transportation and lodging. In a few cases, Sawtooth Software might sponsor a particular paper and pay all the expenses for academics to attend (if their department can’t afford it).
I have learned so much about Sawtooth and their market research. from the interview, I also learned that successful market research, consists of a description and an interpretation of the research results, and the costs and risks associated with delivering any new product because they are very high. Learning from Mr. King is has helped me to know what I want in a business and what I should avoid. I am looking forward to my next interview with him.