Banks.am's interview with Hayk Gyuzalyan, founder of Highgate Consultancy, Board member of the World Association for Public Opinion Research (WAPOR).

Please tell us about your organization and the work you do in Europe and in Armenia.

I have worked in survey research for all my professional life, for over 25 years. I worked on large-scale international surveys of the largest global market research companies, Ipsos and Kantar/TNS, and several years set up my own research company in Brussels and London. 

Our company does international survey research from our offices in Brussels. Several years ago, we set up a branch in Armenia to handle fieldwork for Armenian and international clients. We provide high quality social and marketing research, bringing the best international standards to the Armenian market. 

How has the demand for professional polling and market research evolved among Armenian businesses over the past years?

Twenty or thirty years ago, market research was limited to the activities of large international firms. The main focus was on the surveys for traditional market research activities: tobacco and alcohol companies, FMCG companies.With the development of Armenian economy and growth of national businesses, came the demand for suitable research responding to the needs of the Armenian market. 

Now, we have a steadily developing market research sector which responds to the businesses’ needs to grow their customer base, to develop services demanded by the customers, to test the advertising content, to measure the brand awareness and market segmentation.  

What are the unique challenges of conducting accurate polling in Armenia's relatively small market, and how does this affect the reliability of data for business decision-making?

One of the biggest challenges is the increasing cost of running surveys. The current tools used in Armenia are mostly telephone and face-to-face surveys. They obviously rely on the human interviewers to conduct interviews, and the rising labour costs make the surveys quite costly. Customers are increasingly less willing to engage in interviews, which drive the costs even higher. 

In more developed markets, market research responded to these challenges using several methods. One is outsourcing the labour costs to the third world countries, by hiring the telephone interviewers in countries with lower labour costs. It has had limited impact, because customers are not very keen on engaging in conversations with interviewers outside of their home country. 

Another is by developing automated telephone research. Customers are still not very willing to engage in interviews with machines, so the response rates remain extremely low. AI may have an impact, as current AI tools can quite convincingly imitate human interviewers, but it is still not very common to use AI for survey research. 

Generally, there has been a shift to lower cost online research. When I started working in Ipsos, one of the largest survey research companies, in 2005, online survey research was still considered a niche product. In the UK, it only amounted to about 10% of all market research spend. With the increasing online penetration and developments in research methodology, it now takes at least 50%-60% of the market research revenue. 

What are the key differences in how Armenian businesses use polling data compared to more mature markets in the region or globally?

In many sectors, market research still has a limited impact on the management decision-making. Executives do not rely on the objective measurement of customers’ preferences and opinions, often making management decisions based on a “hunch” or a “feeling,” of what could be optimal strategy for developing a business or a service. In more established sectors, market research is a refined tool which helps tailor the management decisions to grow the business, to increase the brand loyalty, to target different customer segments. 

How can polling help Armenian banks better understand customer preferences?

I can see the potential in polling both for the Armenian financial sector as a whole and for individual banks. 

Surveys are especially helpful in highly competitive sectors and can help better target different customer segments and understand how to tailor the services to target different customer groups. It can help tap into the segments which are not currently covered by specific banking services. 

Importantly, there are financial services which are severely under-utilised, mostly due to customers not being informed of them and banks not engaging in exploring the potential demand. For example, Armenian retail banking customers are not used to investing their savings, investment accounts are rare and money is kept in the more traditional ways. Polling can help understand whether under-utilisation of services beyond retail banking and traditional savings accounts comes from lack of information, lack of trust towards the financial institutions, or any other reason, and can help build the strategy and services that target those gaps. 

What role does polling play in helping banks assess credit risk and understand borrowing behaviors in Armenia, where informal economy activities remain significant?

This sort of questions can be answered by a consolidated survey which would benefit all banks. Understanding consumer behaviours, especially in relation to customer financial behaviour like saving, investing and spending, are essential in buliding a financial system which is beneficial both for consumers and banks. The Central Bank of Armenia sometimes commissions such surveys. 

They need to be organised based on rigorous internationally accepted methodological standards. There is no point in getting into technical details of methodology, but the survey design can be easily improved with several tools which are commonly used in government surveys in Britain and other countries. 

What role does customer satisfaction polling play in helping Armenian banks improve retention in an increasingly competitive market?

I think a few Armenian banks extend a considerable amount of effort to measure the customer satisfaction. I see mystery shopping done regularly and it helps understand the gaps in the customer services quality. The main problem is that each individual bank can only cover their own customers. By definition, it misses those who have already left its services because they were not satisfied, and other non-customers. Customer satisfaction surveys need to be organised among the general population, so the findings can reflect the views of not only existing customers. 

What are the most effective polling methodologies for the Armenian market - phone surveys, online panels, face-to-face interviews - and why?

I think online surveys are under-utilised in Armenia in general. Face to face and telephone surveys have their use – as in the above-mentioned consolidated surveys, which help understand the consumer financial behaviour and underlying driving factors for it. However, they are costly as they rely on the labour of interviewers, and have other certain limitations. Online surveys can be very cost-effective and quick. Nowadays, with over 80% online penetration in Armenia, online surveys can be a good alternative to the traditional survey methods. 

They have several significant benefits. 

-    They can provide data very quickly. With online panels, the turnaround can be as short as 3-4 days from formulating the questions and getting the computer tables with the sex, age, regional cross breaks. 

-    Questionnaires can be very short. You can ask just 3-4 questions, which is difficult to do with traditional modes of data collection. 

-    You have a lot of variety in the way the information is presented to the respondent. You can ask about different design options, include animation or measure reactions to a video. 

It is challenging to organise a good quality online survey. It is easy to ask a few questions on Facebook, but the problem is getting a sample of responses which is representative of the Armenian population. Although many people are on Facebook, but it is not a representative cross-section of Armenia society. A great deal of effort goes into ensuring that the online survey provides views which correctly reflect the views of everyone in the Armenian society. 

How is digital transformation changing the polling industry in Armenia as the new tools or approaches are becoming available to businesses? For instance, banks may use their mobile apps for collecting data about their customers.

I think, Armenian banks have done amazingly well with using the benefits of digital transformation. This is truly one of the most developed services in Armenia. Banks use their mobile apps to get regular feedback from their customers, and hopefully use this information to improve the existing services and offer new ones. However, as I already noted, the obvious restriction is that you can only get the feedback from your own customers. You will miss the views of people who have left the bank because they were not satisfied with the services, or those who never became the bank’s customers for one reason or another.