Section 1: Introduction to Channel Checking
1.1 Channel Checking – An Overview
1.2 Channel Checking Methodologies
Survey-Based Channel Research Projects
Field-Based Channel Research Projects
1.3 Usage Patterns
1.4 Investor Appeal
1.5 Recurring vs. “One-Off” Channel Checks
1.6 International Channel Checks
1.7 Channel Checking Best Practices
Contacting Company Insiders
Section 2: The Channel Research Industry
2.1 Types of Channel Checking Firms
2.2 Expert Networks
2.3 Independent Channel Checking Specialists
2.4 Sell-Side Brokers
2.5 Other Providers of Channel Research
2.6 Industry Sizing
2.7 Growth Forecasts
2.8 The Future of the Channel Research Industry
Section 3: Analysis of Channel Research Providers
3.1 Services Provided
3.2 Geographic Coverage
3.3 Scalability for Custom Projects
3.6 Client Satisfaction
Section 4: Top Picks
4.1 Top Independent Channel Checking Specialists
4.2 Top Expert Networks Channel Checkers
4.3 Top Low-Cost Channel Research Providers
4.4 Top Retail-Focused Channel Research Providers
Section 5: Company Summaries
List of Charts
Chart 1.1 – The Supply Chain
Chart 1.2 – Buy Side Channel Checking Usage Patterns
Chart 1.3 –What Are the Top Criteria You Consider When Choosing a Channel Research Provider?
Chart 1.4 – How Important Is Channel Checking To Your Research Process?
Chart 1.5 –Why Do You Find Channel Research Valuable?
Chart 1.6 –Why Do You Not Find Channel Research Valuable?
Chart 1.7 – How Important Are Recurring Channel Checks To Your Research Process?
Chart 1.8 –What Geographic Regions Are Of Most Interest To You?
Chart 2.1 – Types of Firms That Provide Channel Checking Work
Chart 2.2 –What Firms Do You Use For Channel CheckingWork?
Chart 2.3 - Expert Networks that Provide Custom Channel Survey Services
Chart 2.4 – Channel Checking Specialists
Chart 2.5 - KPO Firms Providing Custom Channel CheckingWork
Chart 2.6 – Full-ServiceMarket Research Firms
Chart 2.7 – Online Polling Firms
Chart 2.8 – Institutional Primary Research Spending – Breakdown by Sector (2007)
Chart 2.9 – Popularity Index
Chart 2.10 – Number of Channel Checking Specialists
Chart 2.11 – Growth Trends in the Channel Research Industry
Chart 3.1 – Services Provided by Independent Channel Checking Firms
Chart 3.2 – Geographic Coverage of Channel Research Specialists
Chart 3.3 – Relative Scalability for Custom Projects
Chart 3.4 - Costs
Chart 3.5 – Client Perception of Overall Quality
Chart 3.6 – Client Perception of Uniqueness of Insights
Chart 3.7 – Client Perception of Cost/Value
Chart 3.8 – Client Perception of Turnaround Time
Channel checking is a specialized form of market research. Channel checkers apply variety of different market research techniques to analyze the supply chain, and different firms have distinct specialties in the way they conduct their research, as well as the geographies and industry sectors they cover. We have focused this Integrity ResearchFocusSM review on channel checking in order to help investors better understand the available options and their strengths and weaknesses.
Not long ago, most investors relied on the research departments of investment banks for channel checking data and analysis. In recent years, however, many investors have elected to seek their own proprietary channel information, which has the advantage of being more exclusive than data provided by the sell-side. While some investors, such as Allianz RCM, have,internal channel checking capabilities, many others have turned to external channel checking services. As demand has increased, the number of firms providing channel checking data and analysis has also increased. Prior to 2000, there were only a handful of firms focused on providing custom channel research services to the buy side. Today, there are dozens of firms that can serve buy side investors in this capacity.
Channel checking firms can be categorized in a few different ways. One is by the type of channel checking product. Some firms integrate extensive channel checking capabilities into their fundamental research product, and offer custom channel checking capabilities as a derivative product. Some firms focus on syndicated channel checking studies. Firms which specialize in providing bespoke channel checking further segment into those which have extensive field forces, those which have built existing panels, and those adept at telephone and/or web surveys. Recently, some expert network firms have diversified into the channel checking space, adding custom surveys to their core business of expert consultations. Channel checking firms also vary based on their geographic expertise. Not surprisingly, the majority of firms are focused on North America, but an increasing number have built capabilities in Asia, Europe and other regions.
The other key differentiator is industry expertise. Channel checking techniques can be applied to a variety of industries but are especially popular in the retail and technology sectors. Some channel checking firms specialize in specific industries, whereas others have developed broad sector resources.
Another important development has been an increased focus on implementation of best practices. Channel checking has different compliance challenges from expert networks, which put investors in touch directly with sources which might have access to material, non-public information. However, channel checks, especially qualitative surveys involving a field force, can uncover material non-public information and firms have developed procedures to handle this eventuality. Channel checking, as a form of market research, has its own unique issues such as respondent confidentiality, remuneration of respondents, and the conduct of the survey process. Compliance is an area of increasing focus for channel checking firms, and their clients.
When considering a channel checking firm, it is important to have a perspective on the objectives for the study. If the investment theme relates to a situation which requires a quick turnaround, such as a pending product launch or acquisition, some firms maintian “boots on the ground” field forces that can provide fast turnaround. Or, if the investment theme involves trends over time, firms which specialize in syndicated studies or maintain panels are potentially better choices. As with all primary research, it is important to match the tools to the task at hand.
This edition of Integrity ResearchFocusSM provides a framework for choosing which channel checking firms are best suited for investors’ research requirements. It provides a broad overview of the channel checking industry, a directory of firms that provide channel checking services, growth forecasts for the channel checking industry, a rigorous cross-examination of specialist channel checking services, Integrity’s “top picks” in the channel checking space, and company-specific information on the most unique and interesting channel checking firms in business today.
The information and insights contained in this report are derived from two sources: (1) Integrity’s proprietary database of over 1,700 research firms, and (2) a survey of 123 money managers that was conducted in Q1 2008. The survey polled the buy side on their attitudes towards channel checking and usage of specific third-party channel checking firms. The survey included a representative sample of hedge funds and mutual funds, thereby providing insight on how usage and attitudes apply to different types of investors. The opening section of this report examines channel checking processes, buy side attitudes towards channel checking and usage patterns of third-party channel checking services. It also discusses industry best practices—an important topic for compliance-minded fund managers.
The second section looks at all the various firms that can provide third-party channel checking services, as well as demand trends for the channel research industry. While each channel checking firms is distinct in their methodological approaches and product offerings to clients, they all fall into one of the following categories: independent channel checking specialists, expert networks and sell-side brokers. In order to help readers identify firms that can perform channel checks on their behalf, the second section provides a directory of the top firms in each segment and a discussion of the advantages and disadvantages of their methodological approaches and business models.
The third section provides an evaluation of the firms that specialize in providing custom channel research services for the buy side. This section provides a rigorous comparative analysis of all these firms, with information on their services provided, geographic coverage, scalability for custom projects, cost, popularity and client satisfaction.
The fourth section provides Integrity’s “Top Picks” in the channel checking space. In this edition of Integrity ResearchFocusSM, Integrity has selected Top Picks in four categories: Top Overall Channel Research Providers, Top Expert Network Channel Checkers, Top Low Cost Channel Research Service, and Top Consumer-Focused Channel Research Service. We also include Runner-ups, Honorable Mentions, and Up-and-Comers, where appropriate.
Blue Heron Research Partners
- BlueFin Research Partners
- Cleveland Research Company.
- Detwiler, Mitchell & Co
- Farmhouse Equity Research, LLC
- Gerson Lehrman Group
- Guidepoint Global
- HMCG (H&M Consulting Group)
- Longbow Research
- Merchant Forecast
- OnCall Research
- OTR Global
- Retail Intelligence Group
- Reuters Insight
- Telsey Advisory Group
- The Channel Checkers
- Tiburon Research Group
- Verbatim Advisory Group
- Wedge Partners
- Y&A Integrity Management Corp