How To Leverage Online Qualitative Research, Part II

An Opportunity for Market Segmentation

In a recent post, we described how online qualitative research can lower the cost of some respondent incentives.  Below, we discuss how this same methodology can lead marketers and consultants to a better understanding of market segments.

Segment identification

Many marketers are not sure how to segment their customer base, or potential customers.  Online research allows the moderator to break out respondents into separate rooms.  If there’s a point in a discussion where it appears that respondents are going in different directions, they can be separated into these rooms, where discussion can be conducted that is more relevant to their needs.

Access to Multiple Segments

Other times, marketers and consultants know that there are segments that exist, but can’t find a way to affordably reach each segment.  Online qualitative research often allows more respondents into a group than face-to-face research, facilitating more participation and also the ability to reach multiple segments at one time.  The discussion guide can be set up to allow groups to break off into separate rooms at the most optimal times in the conversation.

In-Depth Need Exploration

Because online qualitative research can span several days or more, the methodology can often yield a more comprehensive understanding of each segment’s needs. It can also result in more clearly defined messages that will appeal to each segment’s motivators and behavioral drivers.

If at all feasible, any qualitative study that explores segmentation opportunities should be followed up with a quantitative survey to confirm the presence of these segments, measure their size, and confirm differences that may exist.  However, an online qualitative study can provide a strong foundation for market segmentation efforts.

How You Can Create Value For Your Clients

By now, most people have heard that Netflix has decided to abandon its newly-formed Qwikster division.  Given the negative feedback to the creation of Qwikster all over the blogosphere, it’s hard to imagine that Netflix asked any of its customers what they wanted.  In fact, an article in the Christian Science Monitor analyzing the situation points out that the company assumed customers would support this move, believing that customers would just go along with what the company decided was in its own best interest.

The big lesson here, of course, is to conduct primary market research before making such a move.  A simple survey could have:

• Alerted Netflix to how and why this division would not be well-received.
• Saved the company money in product development and marketing spending.
• Engendered customer loyalty by demonstrating that the company truly cared about what its customers thought and wanted.
• Provided feedback on other ideas Netflix could have pursued which could have created high customer satisfaction
• Spared the company bad publicity
• Avoided the time and effort required to develop other marketing mix elements to support an untenable idea

As a marketing consultant or advertising agency, you face opportunities all the time to guide your clients to making good marketing decisions.

Be their marketing hero – demonstrate how market research can help them avoid making this type of mistake and how they can use customer feedback data to create greater company value and make generate higher returns on marketing investments.

Become A Marketing Hero, Part 2

4 Ways to Maximize the Profits of a New Product Rollout

How can you guide your client to maximize success in a new product rollout? How should they target their product; which group of customers represents the “lowest hanging fruit”? How can you be sure that they use the best strategy and leverage their marketing budget?

The best way to work with your client to achieve these goals is to do some research before the product or marketing strategy is fully developed.  Ideally, you should conduct some qualitative research first (e.g., focus groups or interviews), and quantitative research (e.g., a survey) as a follow-up.

However, many clients simply don’t have the resources for both and choose to jump to quantitative research.  There are risks involved in jumping to that step, but there are ways to minimize these risks:

1. Develop some different positioning statements that each fulfills a creative brief. Make sure that each statement clearly communicates the product or service ultimate benefit.
2. Determine who the overall target audience will be.  For example, is there a minimum income level or business size that will be able to afford he product?
3. Work with a sample provider to make sure that you have a sufficient sample size to test out each concept in a statistically reliable way.  The sample should also include enough respondents so that you will be able to observe differences of opinion within sub-segments.  For example, will business above a certain revenue level react differently than those below?
4. Structure the questionnaire so that you get the customer’s thoughts regarding existing competitive products. Then test each positioning statement against roughly the same sample size.

In many cases, there will be a clear winner among the statements you test.  However, there are other situations in which each statement performs about as well as the others.  In that case, illustrate the strengths of each concept performed the best, and how they might be tweaked to generate more favorable purchase levels.

By conducting this thorough research though, the real winner is your client. 

How You Can Make Segmentation Work for Your Client

If your client frequently refers to its customer base as “our target market”, it may be missing an opportunity to leverage differences among customers.  By observing and focusing on differences between segments within the target market, your client can improve upon its marketing strategy and implement better marketing decisions.

Consider the following chart:

If your client is a consumer electronics manufacturer or retailer, this chart provides a great opportunity to understand and implement marketing strategies based on different perceived needs between men and women:

• Both genders prioritize “is a brand I currently own” when making a consumer electronics purchase.
• However, given that the second most important factor for men, “is growing in popularity”, companies in the industry would be well-served to focus on messages centered around how their company is becoming more a brand preferred by others when advertising in male-targeted media.
• The same companies would find success when advertising on web sites and other media focused on women, using messages highlighting the how the product can improve upon the functioning of others that they currently own and use.

Your heroic move:

It would be smart for any of your clients to gather and use the same type of information.  Suggest to your client that it conduct primary research to learn factors involved in purchasing decisions among various segments (e.g., presence of children for business-to-consumer companies, or length of purchase cycle for business-to-business companies).

By slicing a target market into segments and learning what motivates each segment to purchase, your client’s advertising messages can become more compelling.  Your client can prove to their customers that they understand their needs and wants, and become more relevant to these customers in the shopping experience.

Become A Marketing Hero, Part 1:

Improve Customer Satisfaction and Loyalty

Clients love it when marketing consultants and agencies can show them what really matters to their customers, how they can foster create a stronger sense of customer loyalty, and how they can prevent the loss of their customers to the competition.

This is a great opportunity for you to deliver some great marketing solutions that are targeted specifically to the needs of your client. Here are the steps to follow:

1. Ask just five to ten of your client’s customers to sit down to talk about what it’s like to use or purchase from your client.  What do they like best?  How are they different from the competition?  In what areas could they improve?  What would make them never want to leave?
2. Approach five to ten of your client’s former customers.  Why did they leave? From whom are they buying now?  How is their current experience better, or worse than when they worked with or purchased from your client?
3. At this point, you should have some theories about some key drivers of customer satisfaction as well as some actions your client is taking that may be serving as a deterrent to loyalty. You’ll now want to quantitatively survey customers and former customers to find out which theories prove out and which are most prevalent.
4. Gather the data and present your findings to your client, with solid recommendations.  What is making their customers be enthusiastic promoters?  What makes others neutral about the product or service? What practices are hampering customer satisfaction?  What should your client do next to create more happiness and less churn?
5. Conduct follow-up surveys on a regular basis – whatever makes sense for your client (e.g., monthly, annually, every other year, etc.).  Times change, and they can’t expect today’s happy customer to have the same expectations down the road.

In many cases, your client will need to make slight adjustments to their strategy or execution of some tactics.  These changes can make huge differences though, in customer perceptions.

The investment in the research can have an almost immediate payoff in improved loyalty, and the bottom line.  Not only will your customers be happy, but so will your client.

3 Ways To Maximize A Client’s Investment

Your client is getting ready for a new product launch, and you’ve been charged with positioning the product’s message to shape the launch’s advertising campaign. You’re sure that some high-quality market research will provide you and your client with good direction.

Which of the following would you look for in a research partner?

• Industry experience.
• Expertise with a specific tool or methodology (e.g., live focus groups or telephone surveys) which you’re sure would be the best for you to use.
• Ability to identify the demographics and behaviors of your target audience.

Stop.

These requirements don’t maximize your client’s investment. Here’s why and what you can do to really leverage those research dollars.

• “Category expert” is not always synonymous with “research expert.” An agency or consultant working with a client with a highly-technical focus often believes that the researcher should have industry-specific experience.  If your client is a water-filtration company, for example, may want to see a bidder’s background conducting surveys about both charcoal and ceramic filters.  However, this requirement overlooks the experience and lessons that the researcher may learned through knowledge gained in a wide variety of industries. How to maximize your investment: Choose a researcher who can demonstrate how they’ve approached similar issues, and how they’ll apply previous experiences and solutions to the unique needs of your research objective.
• You may choose a hammer when you need a screwdriver. If you determine ahead of time that a certain methodology is the best way to go, you are short-changing yourself of harnessing the most value out of the researcher’s expertise.  This is especially true if you’re not even considering some of the new cutting-edge techniques with which any research agency worth their weight should at least have some level of familiarization.  How to maximize your investment: Ask bidders to recommend the best methods to approach the research project. Even better: Ask the researcher to identify some methods they considered, but ultimately did not recommend and why.
• You know the client’s market, or at least some information about it. Requiring bidders to suggest the characteristics of your ideal buyer is like asking someone to order food without showing them the menu.  How to maximize your investment: You have first-hand knowledge of who the client’s target market is; by being as specific as possible in terms of purchasing dynamics and demographics, you can make sure the researcher gets you the most accurate bid for your project, minimizing surprises down the road.

There are other variables that will most certainly impact the quality of the research project and the data it generates.  But by providing prospective prospective market research consultants with solid customer specifications, asking them to recommend the best research methodology, and insuring they can demonstrate how they’ve solved similar research puzzles in the past, you’ll put yourself one step closer to turning a good investment for your client into a great one.