About a year ago, my firm conducted a series of focus groups with fans of a professional sports franchise to gain insight into their preferences for team merchandise. In several of those groups female respondents wondered about the lack of merchandise designed specifically for them, and what really drew their ire was a team jersey executed in pink. Their responses were along the lines of “Why would they think I would even want a jersey in pink?” and “Why can’t they give me the same jersey they’re selling to men, but tailored to better fit my body?” Obviously, someone in that organization thought a pink jersey would appeal to female fans—but it didn’t occur to them until much later to actually ask their female fans what kind of merchandise they really want. There are many, many more examples like this in the marketplace.
A couple of years ago, for example, Dell famously tried to market laptops to women by launching its “Della” website which, among other things, offered recipes and calorie-counting advice. Customers felt patronized and stereotyped by the cutesy 1950s images and language Dell used, as if the company had forgotten the tech-savvy women it was targeting in the first place.
In part, what makes marketing missteps like these so surprising is that they fly in the face of the enormous purchasing power wielded by women. As Michael Silverstein and Kate Sayre of the Boston Consulting Group have pointed out, women make or influence approximately two-thirds of all purchases in a wide range of categories and even higher percentages in those such as personal care, clothing and household goods. Further, the role women play in the marketplace is only going to increase, since their share of labor force participation is increasing at the same time that it’s declining for men. Granted, women continue to earn less than men, on average. But that, too, will change since women are attending and graduating from college at higher rates than men.
Moreover, women shop differently than men: They actually shop, while men are much more prone to buy—two distinctly different behaviors. Women tend to pay careful attention to packaging and product attributes, and are highly attuned to the environmental, health and nutritional qualities of the products they consider. Men generally aren’t label readers and instead tend to rely on just one or two visual cues to identify products they know and are comfortable with.
Even more surprising, however, is that so many companies seem prepared to make important decisions about merchandising and marketing based on assumptions of what customers may want rather than on facts. In too many cases, market research either doesn’t factor into these decisions at all, or enters too late in the decision-cycle to have a meaningful impact.
Granted, good market research doesn’t come cheap and many companies shy away from it because they think it’s too expensive. But the costs of making mistakes are usually significantly higher, both in terms of dollars and lost or foregone customer goodwill. So the issue really isn’t whether you should do research; instead, the more relevant questions involve the types of research methods available to you and their particular pros and cons when you do research.
Research, Research, Research
The term market research basically means “collect information,” and there are lots of ways to do that. Market research consists of two basic methodologies: qualitative and quantitative. Qualitative research essentially involves collecting anecdotal evidence and impressions from respondents and is really about gaining insight into why your customers think and behave in the ways they do. Quantitative research is essentially about collecting and analyzing numerical data, which allows you to scale the breadth and depth of customer behaviors.
When companies think of qualitative research they typically think of focus groups, and focus groups are without question commissioned more often than any other type of research. A focus group is a relatively efficient way to collect a large amount of information in a short period of time. This methodology is particularly useful for uncovering in a broad-brush way the important concerns or interests customers may have, and it can also be a good vehicle for testing imagery and messaging.
The main advantage of a focus group is its dynamic: A good moderator will shepherd respondents into a lively group conversation, which can provide authentic and detailed “voice of the customer” feedback. But this dynamic can also be a focus group’s undoing: A poor moderator may let one or two strong personalities silence the other respondents. Even worse, a moderator may be so determined to “get the answers” that the conversation devolves into an interrogatory. In either of these cases, the information collected can be mostly worthless.
Another important qualitative tool is the one-on-one interview, which provides a good vehicle for gaining depth of detail that really isn’t possible in a focus group. And, from a practical standpoint, interviews are often easier and cheaper to utilize, since they can be conducted by phone and scheduled at times convenient to respondents. The downside to interviews is that they require significantly more moderator time and expense than a focus group. A close cousin to the one-on-one interview is the ethnography, which lasts over a period of several hours in a respondent’s home or place of work and is used mainly to construct “day in the life” profiles of customers.
An increasingly important qualitative tool is the use of online communities or bulletin boards, which has the advantage of collecting participant dialog 24/7. This methodology is less scripted and arguably provides more authentic insights than either focus groups or one-on-one interviews. Moreover, communities and boards can be very effective at uncovering the “unknown unknowns” that go unasked in more traditional qualitative research. The main disadvantage of communities and boards is that they can be comparatively expensive ways to collect data. A large pool of respondents needs to be recruited and incented to participate, and periodic respondent attrition and refreshment adds to this cost. Additionally, communities and boards function better when they’re moderated or at least monitored fairly closely—which adds another layer of expense.
A final qualitative method that probably doesn’t get as much use as it should is observational research of customers. The key advantage of observational research is straightforward—actual customer behaviors don’t lie. Observational research can range from very costly video monitoring and digital analysis of customer behavior in retail environments to something considerably less expensive and more akin to bird-watching—simple note-taking and video or photography capture. New York Yankees great Yogi Berra got it right when he said, “You can observe a lot by just watching.”
Surveys most often come to mind when thinking of quantitative research. Over the past decade, the ease of conducting surveys has increased and their cost has come down primarily because of the proliferation of affordable and increasingly robust web-based online survey tools. Moreover, online surveys tend to have higher response rates than telephone, paper or intercept surveys because they’re more convenient for respondents to take. The advantage of online surveying is simple: it’s an efficient and relatively inexpensive way to collect a lot of information very quickly. But online surveying is a two-edged sword, of sorts. If web-based tools have made surveying easier and cheaper than ever, they’ve also aided the proliferation of poorly designed surveys, which yield inaccurate or misleading information. In other words, just because you can launch a survey doesn’t necessarily mean you should, unless you have a working understanding of the principles of good survey design. The old adage about computers and data processing is very much relevant to survey design and to market research generally: “Garbage in equals garbage out.”
Another important quantitative tool is data mining. As point-of-sale systems have become more sophisticated, the ability of companies to accumulate valuable customer information has improved dramatically. Many companies fail to leverage the research value of this data, however, because they lack the tools and skills to make sense of the millions of bits and bytes of data they accumulate. But this data can yield critical insights into customer behavior, especially when matched to loyalty card or credit card demographics.
There are lots of ways to collect useful information about your customers. These are just a few. So take advantage of them to help you make fact-based decisions. Not only will it be profitable for your business, but it will also mean better business planning than simply relying on hope or luck to guide you to the right choice.
Dr. Harold Gross is President of Market Research Answers Inc., a full-service consultancy that provides both qualitative and quantitative research services. He can be reached at 972.331.5310 or at firstname.lastname@example.org.