Hipólito “Polo” Murillo is the CEO and founder of Axios Intelligence, a market research agency based in El Salvador. Polo has been successfully running Axios for the past 20 years, leading the company in pioneering CATI methodology in El Salvador. Dave Lovo of Echo Market Research sat down with Polo to talk about Axios and market research in El Salvador broadly.
Tell us about Axios Intelligence. What does Axios do best?
Polo: “Our company has all kinds of clients, it has commercial and industrial clients, we work a lot with real estate development, and we work a lot with companies and international institutions, such as the American Embassy, the State Department, the World Bank, and so on… I would say that possibly, although we do commercial studies, campaign evaluation, and consumer product studies, perhaps the two areas where we are strongest are real estate development and public opinion studies.”
Where does Axios fit into the larger market research economy in El Salvador?
Polo: “In El Salvador, the research business is divided into different tiers. And you have the top tier of companies, the ones that invest the most in research, commercial companies or multinational companies. For example, telephone companies, consumer companies, consumer products, and similar companies.
Most of these companies hire local offices that are part of a larger network. So, these are typically companies that are based in the region, but they belong to international networks, or they have their own network that covers all of Central America and in some cases a little bit of the Caribbean and so on.
So, we don’t compete with them because we don’t have the network, we have correspondents, but we don’t own it. Another tier within commercial research is local or regional companies, regionally we are talking about El Salvador, Honduras, Nicaragua, and Guatemala, which do hire companies like us that have a footprint more oriented to local or immediate regional presence.
So we work in Guatemala, Honduras, and El Salvador without much problem. Some of these companies that have no relationship with large networks hire us. We compete at the top with some of these networks that also serve them, but we also compete at the bottom with other smaller companies.
And then we have the last tier, which is the most competitive and the cheapest, made up of smaller companies, completely national. And you have a lot of freelancers, a lot of people who just do focus groups, people who worked before in other research companies, but they do studies ad-hoc for them. And then, there are several niches that come out of this commercial scheme.
For example, a big niche is governmental or NGO research or foreign institutions. So, we participate with foreign institutions, but not with the local government. So, we, for example, have a couple of projects with USAID, we have projects with the embassy, we have projects with…
We have done projects, but we don’t have any right now, with the World Bank and so on. And there is another niche, for example, which was big at one time and now it is big, but for a different number of reasons. We are no longer working in that, which is the political niche. So, public opinion, and politics, are other niches.
But we haven’t worked in that area for many years. And then there are other niches specific to certain industries that have very specific needs. So, for example, in the real estate development industry, all the companies are local, they are relatively large projects, and their needs are highly specific. So, I believe that we are possibly the largest supplier of studies for local real estate development, we work with all the large developers, and they are ad hoc studies up to specific studies of different types of real estate development intelligence.”
What are the main challenges with conducting market research in El Salvador?
Polo: “In El Salvador, in the past, the most serious problem we had was the security risk of doing face-to-face surveys. Let’s say a client asked for a nationally representative survey, there were large areas of the country where the pollsters could not enter for security reasons.
Today, that’s much improved, but there’s still a bit of a problem because even at typical, middle-class levels, many people live in residential neighborhoods with limited access, or gated communities, so for face-to-face that makes it difficult, right? Because before, the only problem we had in that realm was with the very high socioeconomic classes. Now it’s trickled down, and it’s a much more generalized thing to have, to live in communities that are completely gated.
In the case of CATI, higher socioeconomic classes are underrepresented. So, we don’t have much response from people of a relatively high socioeconomic class or income level. This causes us problems, for example, with clients who are developing real estate buildings or apartments worth 200 thousand dollars or more because their customers are the same people who don’t answer surveys.
These surveys cannot be obtained through online panels either, because databases are quite limited in El Salvador. Databases in El Salvador are primarily comprised of the middle socioeconomic strata, so there is not much data on the lower socioeconomic strata, let alone the upper socioeconomic strata.
Another serious problem is the lack of professionalism in the insights industry in the country. First, there is not really a market research career path here. The people who come to market research in this country, many of them don’t even have a basic statistical background. I mean, I’ve had discussions with colleagues where they just didn’t understand the difference between a representative sample and a convenience sample, which is basic.
The client doesn’t know either, so the client goes and hires the cheapest or the one who speaks the best because they have no way of differentiating between someone who knows their stuff and someone who doesn’t. Clients can go through recommendations from other clients, but there is nothing structural. So that’s a problem.
The other thing is that it’s very difficult to do B2B studies in El Salvador. That is, when the client is a company that makes a product to be sold to other companies, and they need to speak directly to the people who buy their product, unless the client gives us the contacts and helps us contact those people, it’s practically impossible.
El Salvador needs much better data at a macro level. As for the data that we have, I worked in the United States before, so I know what publicly available data in the United States on different types of things looks like. For example, if I wanted to know how much commercial space is available and empty in San Francisco right now, with two clicks I could find it. In El Salvador that would be impossible.
“…we must try to move from being data providers to being data analysts and selling the analysis, or the value added, rather than selling the methodology.”
In El Salvador, there is no information about the value of companies; all companies are private; there is no information about a large number of macroeconomic factors, and there is no reliable, aggregated information about practically anything.”
We’ve talked a lot about challenges today. What might be the right way to move forward from this point in the industry?
Polo: “I think one of the most important issues that we were talking about at ESOMAR Mexico is that we must try to move from being data providers to being data analysts and selling the analysis, or the value added, rather than selling the methodology. So right now, we have in the pipeline a couple of products more oriented towards generating data rather than towards selling any specific methodology.
In order for all companies to survive, we are going to have to go a little bit that way; that is, we are going to have to look for our niches, and we are going to have to try to sell products that offer more – that give you a consistent, recurring return. We need to orient towards products that are not only valuable but also sustainable.”