I won’t complete customer satisfaction surveys

It’s a matter of principle for me.  I know that the field of Loyalty research has shown that understanding what your customers think of you help you improve your business.  Business with high loyalty scores do better than those with low scores.  Sounds good.  But it doesn’t convince me to actually complete them.

I used to try.  As a former Marketing Research Professional, I felt obligated to try.  But I found it annoying and unfulfilling.  It didn’t seem to matter what I really thought, the people who designed the survey were just after me to pick a number.

Plus, I have some other problems.  First, there is the manipulation problem.   A cashier asking you to fill out the survey to document the “wonderful” service she provided is manipulative.  The crew on the cruise ship who tells you that they are trying to reach 100% satisfaction on the survey is trying to make you feel guilty if you give them anything less.  I get why this happens, it’s because the surveys are used to determine bonuses.  But what does that say about their validity?  Would you trust the 100% from the cruise ship?

Second problem:  This contributes to the inundation of consumer with surveys.  It is one of the reasons (I believe) for the decline in response rates for surveys.

Third problem:  It measures the execution part of the equation, one that has less leverage than strategy and tactics.  It uses up some of the good will of declining number of consumers who will complete surveys on measuring execution.  But that means they will have less tolerance for surveys that help inform strategy and tactics.

Unfortunately, I have no say on this matter except in my behavior.   So, I am boycotting any loyalty surveys but I will gladly complete a true market research survey   (which I can now do, having left my career.)  I hope you consider joining me in making that distinction.

Is there anything good about Big companies?

It’s become fashionable to say that with the changes in technology that it no longer matters how big your company is, that small companies can do big things.  With contract manufacturing, outsourcing of functions, and even 3D printing, small nimble companies can compete with the big players. Fortune magazine has a page each month devoted to small companies that are succeeding against formidable competitors. Authors such as Nassim Nicholas Taleb in his book Antifragile, and Seth Godin in much of his work, reiterate this point.    Nassim Taleb goes onto say that big is fragile, that it makes companies less able to deal with shocks such as the global recession.  This of course goes against the rationale that is behind the formation of diversified conglomerates (which go in and out of fashion). Taleb’s point is that the risks are not unrelated, instead they are interrelated.

There is a disconnect.  Despite this, large companies keep growing.  Companies acquire other companies, and they grow organically.  But what occurs to me is that some of the examples cited by these folk aren’t exactly in condemnation of big but rather against big in some situations.  Two areas I can think of are examples in which small companies are more likely to innovate when there are risks involved – for example, new pharmaceutical drugs are now happening more often in small biotech firms and natural gas being fracked was discovered by small wildcatters.

But in both these situations, the endgame is often to sell out to or partner with the large companies.  The small biotechs sell out to or license to Big Pharma companies in order to develop and market those drugs. Why?  Because Big Pharma have a better track record of getting drug approvals, and they have the might and expertise to successfully launch new drugs.  Vivus tried to buck the trend when they launched Qsymia, a new obesity drug, but sales have been sluggish (it is said by Wall Street) because not enough doctors know about the drug.   Here’s the Pharmalot post discussing Vivus’ strategy.

http://www.pharmalive.com/fat-chance-fda-loosens-reigns-vivus-diet-pill-it-enough

Similarly, those wildcatters who innovated fracking are selling out to Big Oil.  It seems there may be something good about Big Oil taking over – the Wall Street Journal just reported that the safety records are better at the wells that belong to Big Oil after they are turned over.  Big Oil seems to be doing something right, despite a recent record of oil spills and pipeline leaks.

Full disclosure:  Having worked in Big Pharma perhaps I see too much benefit in large corporations, and I know that small companies are less able to pay for market research expertise such as mine.

But, besides potential improved safety, I see that big companies can invest in activities and have resources that small companies can’t.  Without being able to operate on a large scale, Walmart couldn’t even think about taking on the broken Indian produce supply chain*.  Walmart’s deep level of expertise in supply chain management and megasize give them the potential skills to accomplish this.

http://scm.ncsu.edu/blog/2013/01/12/is-wal-mart-really-ready-to-take-on-logistics-in-india/

I am editing this to add that the Wall Street Journal reporting of the Chinese bid for Smithfield is citing that they believe that Smithfield’s agribusiness experience will help the Chinese deal with their issues with food safety.  Again, another big business is considered to increase safety over small.

 

So, is there a value for big?  I’d love to hear more examples of the good and the bad.

*for those who don’t know, about one third of all produce in India rots before it gets to market.

Quakers and Business

Those of you who know me well, know that I am currently attending school for my Masters in Religion at a Quaker Seminary in Indiana.  I’ve been studying Quaker history in business and have uncovered some interesting history that isn’t widely known, about how Quakers handled debt, and how early 20th century British Quaker employers reacted to socialist criticism of them when their economy was declining.  I’m also studying the better known issue of how Quakers dealt with the issue of slavery.  (For those of you who don’t know, Quakers were very active in the abolitionist movement as well as the Underground Railroad.  But those who owned slaves in the South were in a very odd position.)

I’ve turned my research into a workshop in which the group will experiential replicate the situations the early Quakers found themselves in.

If you are interested in how devout religious folks dealt with applying their faith to their business, and the implications for today, please consider attending this workshop (even if you aren’t Quaker – I promise you will find it interesting.)  Here’s a link to the description of the workshop I am leading in Colorado during the week of June 30th.

http://www.fgcquaker.org/connect/gathering/workshops/let-your-life-speak-testimonies-business

Or if you want to know more, please email me at the address in the about me section.  I am also available to speak to groups in the NJ area about this issue after September.

Working at home and introversion: Is there a relationship?

There have been two items about working at home in the news lately.  Marissa Mayer (a self confessed introvert), CEO of Yahoo, has announced that working at home is no longer allowed at Yahoo.  To quote her:  “To become the absolute best place to work, communication and collaboration will be important, so we need to be working side-by-side,” the memo said. “That is why it is critical that we are all present in our offices.”

http://money.cnn.com/2013/02/25/technology/yahoo-work-from-home/index.html

Then, the Census Bureau reported that work at home had reached an all time high.  “Some 13.4 million people, or 9.4 percent of U.S. workers, labored at least one day at home per week in 2010, compared with 9.2 million people, or 7 percent of U.S. workers in 1997, according to one Census Bureau report released Tuesday.”

http://allthingsd.com/20130305/more-americans-working-remotely/

Susan Cain, in her book Quiet, notes that Introverts work better on tasks that need concentration when the noise level is low and extraverts (sic) work better when the noise level is high.  She notes that the open office plans that are taking hold right now can be problems for introverts.  I can attest to that fact, when I worked in a cube I was very frustrated and not as productive as when I had my own office just around the corner.  When I was in the cube, there was one woman whose voice was like fingernails on a chalkboard for me, but she didn’t seem to bother others the way she bothered me.  Now that I have read Quiet, I attribute a lot of my reaction to being an introvert.

I personally welcomed the ability to work at home as a way to overcome the problems of working in an open office plan.  So I wondered, whether more introverts work at home, or at least are happier working at home, especially if the option is a (relatively) noisy cube.   I raised that question to Susan Cain, who thought it was a very interesting question.

As I market researcher at heart (even though I am only consulting occasionally ), I am curious. So, I have created a survey to study this issue.  Actually, since am using the free version of Survey Monkey, I’ve created two, one for extraverts and one for introverts.  Below are the links for each, please click on the link that applies to you.  Feel free to pass it on to extraverts and introverts you know.  I will report these results in this blog when I have gotten a reasonable number of response to each.

If you are an extravert and have worked in more than one type of work environment (work at home, work in a cube, work in an office with a door) please use this link:

http://www.surveymonkey.com/s/R55X5SD

If you are an introvert and have worked in more than one type of work environment, please use this link:

http://www.surveymonkey.com/s/MYBVKJ3

Thanks for your participation and please feel free to pass it along to others so I can get enough responses to be meaningful.  (As of May 7th, I have 43 introverts and 23 extraverts – I need 50 of each minimum, so please pass this along to your friends.)

Big Data and Primary Market Research

One of the phrases we have started to hear a lot of lately is “Big Data”.  First, a definition for those who aren’t up on this trend.

From Wikipedia: Big data usually includes data sets with sizes beyond the ability of commonly-used software tools to capturecurate, manage, and process the data within a tolerable elapsed time.  Big data sizes are a constantly moving target.

Big data type analysis is used now in a lot of different venues.  One use of big data that has been getting a lot of attention is when people pull together data from disparate sources such as credit reports, on-line browsing behavior, car ownership records, and other sources to create individual profiles of people which can be used for targeting purposes.  Social media is generating a lot of data, which may be folded into this, as well as locatoin data from cell phones which now allows delivery of coupons based on where your phone is   Big data is finding uses in health care, with the advent of electronic health records.  It has been touted as bringing the ability to affect changes in health behavior such as reducing hospitalizations.  In essence, it is an extreme form of segmentation – we are now talking about segments of one.

Big data is giving rise to new privacy concerns.  I used to dismiss concerns about the safety of giving out information to Market Research both because I knew from experience (at that time) that the CASRO guidelines meant the data wouldn’t be used to sell plus that marketers weren’t interested in individual behavior and couldn’t deal with the volume of information on an individual basis. At that time in the past, detailed data like that had no value for them.  Well, the decrease in computing cost and the development of more sophisticated software has changed that.

Implication:  This may be another factor contributing to the decrease in cooperation rates for market research surveys. We may know that we are adhering to CASRO guidelines or HIPPA regulations, but our audience doesn’t know what those guidelines are, and can’t discern when something is true market research and when it is data collection to enable direct marketing.  Recognizing this factor could help us identify a potential solution to declining response rates. As I have noted before, if the decline doesn’t stop, we won’t be able to conduct quantitative market research for much longer See my post here for more details:

http://wp.me/p27tSX-12

Beyond these, there are some other implications of Big Data for Primary Market Researchers.

  1. Unless your corporate market research department shows that it is capable of dealing with Big Data, another  department will.  Find out how to make use of it fast!  or else you will lose an opportunity.  (It may already be too late.)  
  2. Learn how to integrate Big Data with primary market research.  You should use it before doing any primary study to inform what you do, and you should interpret your results in light of Big Data findings.
  3. There may be some projects that you don’t need to do with primary research because you can do them instead with Big Data.  Do it!  Don’t waste respondents time and energy providing estimates when you can get actual data.  Every unnecessary use of a respondent may contribute to declining response rates.
  4.  You should know which of your vendors can deal with Big Data, so you are ready to have them help you integrate Big Data with Primary Market Research.

However, in my opinion, Big Data should never substitute for Primary Market Research or for the insights that people can bring.   This article from the NY Times makes a great case for how Big Data can’t substitute for human reasoning and intuition.

http://www.nytimes.com/2012/12/30/technology/big-data-is-great-but-dont-forget-intuition.html

As always, I appreciate your comments and suggestions.

Market Research with Impact

One of the recent Research Daily Reports that Bob Lederer has posted on YouTube has stuck with me.  This showcased David Santee’s (former client side MR) views on becoming a trusted advisor.  I do recommend watching it.

His views dovetail very closely with what I have been saying about interaction.  To recap, McKinsey has identified that the types of jobs in which interaction are crucial are the growth jobs of the future. But when we in Market Research focus on getting our projects done and not on making sure they get incorporated into the companies DNA (David Santee’s words, not mine), then we aren’t doing the interaction part of our job very well.  When we think our reports will speak for themselves and don’t work on how to ensure they get acted upon,  we aren’t doing the interaction part of our job very well.  When we avoid meetings as a waste of time, and then complain that the brand team are idiots because they ignored what we wrote in our report, we aren’t dong the interaction part of our job very well.

I’ll repeat what I said in my back to basics entry.  The purpose of marketing research is to help a company increase sales.  If you aren’t working towards that, if you think your job is to create reports, then you aren’t doing your job.  No wonder senior leadership of MR departments is sometimes drawn from outside MR, such as the example that David Santee cites.  I saw that first hand several years in a department I was in. Back then, I didn’t get the reason, but I do now.  It’s a failure of Market Research to look beyond their work to what the impact of their work is.

David Santee has some good recommendations for change at the senior level which  you can see on the video, and I’ll add ones here for how to get this thinking further down into the organization.

  • Adding into people’s objectives things that measure the impact their research has had.  Perhaps, how often their research solved the problem for the brand or pointed to a new direction,
  • In status meetings, don’t just talk about active project status, talk about what efforts people are making to ensure that their previous research is being implemented.
  • In department meetings, highlight people or projects that changed the brand or company’s direction.
  • Make it mandatory that MR staff take a course or read a book on the topic of persuasion and identify one thing that they can do to ensure their ideas get listened to
  • Mandate that employees attend meetings at which they might have a chance to affect the decisions being made, regardless of whether it is based on their research.
  • And (echoing what Mike Garcia has added in his comments) get your vendors involved in making sure the project has impact!

I am sure there are other ideas that you can come up with and I’d love to hear them, and what happens when you start implementing them.

Back to Basic II: How does marketing research help marketing?

The role of marketing research is to increase the effectiveness and decrease the risk of marketing efforts.  Marketing decisions can be made without any input from customers, but decisions made by understanding customers often yield better results than if you don’t do research.

For example, 80% of all new product entries fail.  A good marketing research program can  help reduce the risk of that failure.  It won’t eliminate it, because marketing research has not yet reached the stage when it is infallible and because people ignore or misinterpret the results of research, but it can reduce the risk.  Failure of a new product costs a lot of money, which is why marketing research programs are worth the investment.

The best way to explain how this works is to look at the 4 P’s of Marketing and explain how Market Research can help with them in the context of launching a new product.

Price:  A product may fail because it is priced too high or too low.  Marketing research techniques have been developed to collect customer opinions on price.  One commonly used technique is called the Van Westendorf model.  However, the research is not infallible.  I have seen products priced in a way that fits with the research and still be perceived as too  highly priced.  But usually the results are better than if you didn’t do the research.

Place: This is a neglected area of market research but perhaps with mobile technology this area will get more interest.  It is important to know where your product is most likely to be purchased so that your product is distributed in the right way.  I have seen products fail because the marketing department didn’t take “place” into account in a clear enough way and there haven’t been good tools for researching that.

Product:  This, and promotion, are the areas that get the most attention in market research.  The belief is that if you get the product and the advertising right, that a new product will succeed.  Typical kinds of research done about the product in the consumer world are concept tests (where a written description is shown to respondents who rate how likely they are to buy the product) and product placement tests (where the consumers are given a product to try and rate.)  Some companies are more efficient and screen multiple concept tests at one time. Then the top scoring concepts are given more attention and polish.  Product testing may be skipped: It is one of the most expensive types of research plus some regulated products can’t be put into product testing, such as pharmaceuticals.

Promotion:  For many years the major (and most expensive) form of promotion has been advertising.   Market research can help you identify the key elements of developing an advertising campaign:

  • Target audience- this one is key.  When you do your concept testing for developing the product, you need to pay attention to who is most likely to buy the product.  That should go into your forecast (to determine if you have a big enough target market for the product to be successful) and also inform your advertising.  Advertising that doesn’t take into account who is likely to buy the product runs the risk of being annoying and unpersuasive
  • Perceptions of product and category- in order to create great advertising, the ad agency needs to know how the customers feel about the category as it is. Do they have a problem with products in the category that your product can solve?  If you don’t do research, you run the risk of making assumptions that are false, which can lead to failure.
  • What is the most effective message to say about your product? Once you know how consumers think about your product, you can develop several options for your basic message.  Testing the different options to find out which one is most compelling gives you a more informed basis on which to make this decision.  This may be overlooked, because people want to jump straight to advertising and/or they may think the strategic focus is obvious.  Getting the message right can have a huge impact on sales.
  • What is the most effective way to say your message?  Ads that say the same message can look and feel very different and have very different effectiveness at selling the product.  Thus, an ad agency will usually create multiple “creative concepts.” Testing the final options for the creative concepts is one of the most creative types of research there is.  There are many ways to do this from focus groups and one on one qualitative interviews to large scale ad tests to the new neuromarketing techniques. Problems crop up with this stage when you haven’t done the earlier stages.  I’ve also written about some of the problems of testing ad concepts in another post.   (Link here  http://wp.me/p27tSX-1U   )