Category Archives: Market Research

Customer Insights Mean Everything

Screen Shot 2015-10-25 at 2.18.36 PMI had a great time hanging with Leslie Westbrook for a couple weeks earlier this month.

Leslie is an Ole Miss graduate who went on to a phenomenal career in market research and consumer perceptions.

She started with Procter & Gamble in Cincinnati, and then worked for New Product Insights in Kansas City before starting her own company in Maryland.

She’s helped position and launch so many products over the years: Pampers. Pringles. Duncan Donuts coffee. Dairy Queen Blizzard. Quaker Granola Bars. And the brands on her resume are incredible: Hallmark. Purina. Coke. Kraft. Johnson & Johnson. Sara Lee. General Foods. Nestle. Max Factor. Ragu. Del Monte. Arm & Hammer. Kimberly Clark. The list is endless.

In the early 1980s when I was in college and just reading about the Tylenol poisonings, she was working with McNeil Consumer Healthcare (the brand’s owner at the time) to develop new tamper resistant packaging and to position the new caplets which replaced the capsules.

We both love research and knowing what customers think, and hit it off well. She talked to a variety of classes, helped my classes with a focus group project, met students, shared ideas and more.

One of the many things that jumped out though is a theme that’s near and dear to me: That in marketing, it’s the little things – the tiniest of details – that can make or break a customer relationship and set the tone for a brand.

pringles1970Leslie talked about Pringles. When she was testing the product, it was assumed customers would pour the chips into a bowl or on a napkin before eating. No one anticipated they’d stick their hand into the container to get the chips. So P&G redesigned the packaging to remove the sharp edges around the opening of the tube so people wouldn’t cut themselves when they reached inside.

Pampers was an interesting challenge. At the time, many women were appalled at the idea of wrapping their babies in plastic – most said good mothers would never do such a thing.   Understanding this nuance, Pampers wasn’t positioned as a convenience. Instead, it was marketed as being good for the baby because it wicked moisture away from the skin, meaning less chance of diaper rash. This messaging did the trick and sales took off.

In the early days of granola bars, there was only kind: dry and crunchy. They crumbled easily and were a mess to eat. Understanding this, Quaker realized the appeal of a bar that held together when eaten. Thus, the success of a soft “chewy” product that became a hit.

Call me crazy, but I love this stuff, and it was fun to spend time with someone else who loves it too!  I look forward to Leslie’s next visit.

Click here, here and here to see some of my previous posts on how little things are the big things in marketing.

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Filed under Branding, Customers, Market Research, Sweat the Small Stuff

When Research Becomes PR

VisaIn the market research classes I teach, we of course focus on how to conduct research: qualitative, quantitative, common research mistakes, how to use research to develop marketing insights and so on.

But another thing we discuss is how sometimes, the research itself can be used to build the brand.

For example, every year, Visa sponsors a “tooth fairy survey.” Among other things, the company learns the average amount American children receive from the tooth fairy ($3.19 in the 2015 survey – down 24 cents from last year); that moms leave more money under the pillow than dads; that kids in the northeast U.S. receive more than kids in the south, and other fun tidbits. Click here for their most recent findings.

But something else beside research is happening. This is a great public relations move for Visa, as it aligns its brand with a financial topic that generates quite a buzz. They conduct the research, find some interesting facts, and then issue a press release that gets picked up by countless media outlets. Simply Google “Visa tooth fairy survey” and see that the 2015 results were covered by Forbes, CNBC, USA Today, Huffington Post, many CBS, ABC and NBC news affiliates, Chicago Tribune – the list goes on and on. The resulting stories mention Visa, and viola! They get some nice publicity.

Visa also promotes a tooth fairy calculator app and does other things to leverage the findings.

This is a great way for companies to gain visibility and position themselves as credible experts on a certain subject.

U-Haul does this as well too. Each year they look at their data to determine where people rent their trucks and trailers, and where they drop them off. From this, they can deduce what cities and states Americans are moving from and to. They then promote this information, and news outlets all across the nation feature stories about America’s migration – giving credit to U-Haul for the insight.   Google “U-Haul relocation survey” to see for yourself.

While the point of market research is to learn something and solve a problem, it’s simply genius to leverage the information for public relations purposes. Visa, U-Haul and other companies often find the value of the resulting publicity far outweighs the cost of the research itself.

Smart marketing indeed!

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Financial Services Segmentation

We’re at that point in the marketing class I teach at Drake University where we discus segmentation.  How can marketers identify and reach those people who are most likely to buy their product or service?  And how can they group customers with similar wants and needs?

The textbook of course mentions all the conventional segmentation methods such as grouping customers by demographics (men have different needs than women), geography (people in Minnesota buy different snowblowers than people in Oklahoma), lifestyle (hobbies, interests); product usage (frequent flyers versus seldom travelers), and product features (some people want the Honda Accord V6, and some want the 4-cylinder model).

But I’ve found that while these approaches generally hold true across various industries, there are additional segmentation techniques when it comes to slicing and dicing the financial services market.  For example, while a home buyer in California may indeed desire a different mortgage product than someone in Nebraska (perhaps due to the higher home price and such), there may be even more effective ways for companies to group customers.  Things such as:

Profitability. It’s hard for a consumer product company like Proctor & Gamble to know exactly who is buying their toothpaste (except on an aggregate level).  But financial services companies not only know exactly who the customer is, they know a lot about him or her.  Of course this data must be used with great caution (and subject to various privacy rules), but it’s pretty easy to determine customer profitability on an individual level.  Looking at the street value of the asset is only part of the picture; consider behaviors like how and when the customer makes their payment, how they interact with the company, the number of other products owned, the likelihood of buying additional products, and more.

Tech prowess. Customers who have PIN numbers, frequently access their accounts on-line, are a Facebook fan, follow tweets and the like often have different wants than other customer groups.  Segmenting customers by their receptivity to technology can prove beneficial (as can the additional opportunities to communicate).

Financial sophistication. Often you can tell a lot about a customer by what financial products and services they buy.   (I’m not talking about how people in Florida would buy hurricane insurance when someone in Iowa would not – that’s a bug duh.).  But by digging deeper, and looking beyond the immediate purchase, you may gain other useful insights.  The customer who buys, say, a credit life insurance policy – or who pays only the minimum balance due, or who retains a product that has an above market interest rate – may have a much different level of financial sophistication than those who do not.  Although you need to be careful when making generalizations, such information can be very advantageous when determining what other ways the customer can be served.

Segmentation can be a very powerful marketing tool (even though I’ve noted in previous blog posts that the mass market is still alive and well, too).  These examples are just a few of the ways it can be approached for financial services companies.  Because these firms, especially, have an edge of many other industries because of the robust customer information that’s available.

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Filed under Customers, Market Research, Segmentation

Definition Research

My comments about research (on the previous post) remind me of something I once read about a trend toward “definition research.” That’s where the definitions used in survey questions are stretched in order to support or exaggerate a statistic. The example mentioned was a survey of children in which 25 percent said they’d been physically or sexually abused during the previous year. Twenty five percent in a year!!! That’s horrible, and it’ really gets your attention — until you discover that the definition of “abuse” included things like being pushed, hit or shoved by a sibling, or getting into a school-yard fight.

Based on this definition, then, it’s a wonder the percentage wasn’t higher.

I’m not mocking the issue itself, but the survey methodology seems suspect to me.

But the statistic makes a great, attention getting headline. And that, unfortunately, seems to be the point of a lot of market research today.

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When Research Isn’t Research

Earlier this summer, I received a “2009 Congressional District Census,” an endeavor commissioned by the Republican Party. (Don’t assume I’m a Republican; sometimes mailing lists have errors.) It’s an official looking, 4-page survey with a cover letter from Republican National Committee Chair Michael Steele. It states that the opinions gleaned will be used to ensure that Republican leaders and candidates are addressing issues that resonate with voters in Iowa’s 3rd Congressional District. Fair enough; sounds good.

But upon reading the survey, it becomes apparent this isn’t really marketing research after all, but rather a marketing gimmick (along with a plea for money). The questions are worded so as to influence the answers and promote an agenda.

Like I always tell my clients and students, if you ask the questions just right, you can usually make a survey reach whatever conclusions you’d like.

Take a look:

“Do you feel that the huge trillion-dollar solutions the Democrats have advanced to boost our economy will help or hurt our nation in the long run?”

“Do you worry that the Obama Administration is committed to greatly expanding the government’s role in your life?”

“Do you trust the Democrats to take all the steps necessary to keep our nation secure in this age when terrorists could strike our country at any moment?”

And here’s my favorite:

“Do you think the Democrat efforts to restore the “Fairness Doctrine” that will destroy conservative talk radio is a violation of free speech?”

To be sure, Democrats and other political organizations send out bogus surveys like this too. I’m not picking on Republicans per se or the issues mentioned, but rather the survey itself. As a guy who makes part of his living doing market research, it bugs me when I see stuff like this. Here’s why:

1) People are over surveyed as it is. Conducting research when you’re not really seeking truth or when there are ulterior motives only adds to the clutter without advancing knowledge. (It’s pretty easy to know what the results of this survey will be, so why do it? They can raise money without doing it under the guise of research.)

2) There’s a growing credibility problem with much of the research that’s out there. It used to be surveys were mostly the domain of academics, or well-known companies like Gallup, Roper, Harris, Neilsen, etc. But now, anyone with a computer, a mailing list, an account with Survey Monkey and an agenda can churn out research. At best, this makes it harder to discern what information is credible or not; at worst it can be purposely deceptive. More and more, people see through it when self-promotion is disguised as research, or when the research is really a thinly-veiled attempt at something else. As skepticism goes up, response rates go down.

This doesn’t bode well for those trying to do legitimate research. Don’t get me wrong – I’m all for surveying, gathering feedback and learning, because that’s the basis for great marketing. I just don’t like it when research masquerades as something else.

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So…How Do You Know What To Sweat?

Previously, I’ve written about the importance of sweating the small stuff with your customers, and about ways to get your employees to care about the little things too.

But how do you know what’s worth sweating? What simple things can your organization do that makes a big difference with customers?

In a word (OK, two words): Ask them! This may conjure up images of extensive, expensive market research. But it doesn’t have to be such a big deal, especially if time and budget don’t allow. My company, MagnaStar Marketing, has had great success orchestrating Advisory Councils and Discussion Groups that gather feedback on the little things that create (or erode) customer loyalty.

Think of them as “lite” focus groups. They’re not held in a fancy facility; there are no two-way mirrors or cameras; and participants know who is sponsoring the discussion. And big payments to participants are not needed — most customers just enjoy being asked their opinions (which in itself can create loyalty). This form of research is easy to implement, and the small insights can prove invaluable.

For instance, we worked with a home mortgage company and expected to hear all kinds of grousing about interest rates and fees. Instead, we found out the monthly payment envelopes provided to customers was a much greater source of aggravation. “Every month, I put my check in your flimsy envelope that I have to tape shut, and I pray it makes it through the mail,” was a common refrain. Customers had serious doubts about doing repeat business with a company that appeared to care so little about payment security.

What a quick fix that was!

In another group, we sought to gather feedback on a company’s revamped Web site. We were testing some functionality and a cool new design. While customers seemed to like it, we found they’d hesitate to click on a button that said “APPLY FOR THIS OFFER” because it seemed so commital. But they had no qualms about clicking on one that said “CONTINUE WITH THE PROCESS” — even though both buttons led to the same thing! We might have blown right over this small but critical detail had we only been focused on the lofty big stuff.

One more: A client was promoting an enhanced service offering, and wanted to know some important things: Did the package include the right bundle of benefits? Was it priced right? Was it distributed to the right target? We discovered, however, that the biggest obstacle was the name the company had been using for this service all along. It confused the heck out of people. A slight tweak in the name made all the difference.

Another good way to gather feedback is to get service representatives, sales people and other customer-facing employees to ask a few key questions when they’re talking with customers. Just make sure you have a good way to loop the feedback back into your business processes.

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Filed under General, Market Research