May 312013

The other day I saw a comment that clients have a duty to keep themselves up-to-date with all the latest changes in market research, to make sure that their organisation is getting the benefits that are available. However, as soon as I read the comment, I was troubled.

After some thinking about the proposition that clients need to be up-to-date I was able to isolate my concern. It is unreasonable to create a duty or expectation that is not possible. It moves the blame from somewhere else to an unfair location. And, I believe that it is not possible for most clients to be up-to-date, or fully informed, about all that is new in market research – not even all the major trends and changes.

Nobody is fully informed
The first point is that it is not just clients who are not fully informed; providers and researchers are not fully informed either. No researcher I have ever met or heard of is fully up to speed on:

  • Social media monitoring, mining, and research
  • Neuroscience
  • Discourse analysis
  • Gamification
  • Computer Aided Qualitative Data Analysis
  • Big Data
  • Adaptive discrete choice modelling
  • Smartphone, participative ethnography
  • Predictive markets
  • Behavioural economics
  • Virtual focus groups
To name just a few!

The Vendor
Nobody really expects a vendor to understand all of these fields. It is, usually, sufficient for a vendor to fully understand their proposed technique, and its direct alternatives. For example, we look to researchers utilising predictive markets to say, here is how it works, these are the problems it tackles, here is its academic/practical/philosophical underpinning, and here is how it compares with other, major, alternative solutions to the problems it is suitable for.

The Buyer
For most research buyers, market research is only a part of their job, often a fairly small part. As well as market research, research buyers may need to be on top of advertising, marketing, production, NPD, logistics etc. If vendors can’t be fully briefed on what is new and available in market research, how can buyers be expected to up-to-date? Wolves nearest the sleigh’s, fashion, and favourites

I suspect that the right strategy for buyers, and a strategy that many of the buyers adopt, is based on three elements:

  1. Tackle the wolf nearest the sleigh first
  2. Check out what is fashionable
  3. Do a few things just because you like them or you are interested in them

The wolf nearest the sleigh
Most research buyers have some problems that are more pressing than others. Examples are research programmes that are not delivering insight, research programmes which are too expensive or too slow, or new research needs that are not being met. Getting information on new solutions to the most pressing problem is a sensible and common way of prioritising time and effort.

Vendors need to realise if they have a research solution that is 25% better (e.g. 25% cheaper, or faster, or broader) a buyer might not be interested if it addresses a problem that is adequately being tackled. Buyers have to prioritise, and a better solution to a solved problem is rarely a priority.

Keeping an eye on fashion
This might initially sound a little lazy or shallow – but there are two good reasons for adopting this as part of the research buyer’s strategy.

  1. Failing to know about something your boss has heard about can make you look foolish and ill-informed. At the moment Big Data is in the mainstream press, it is in the business press, there are radio and TV programmes about it. A wise research buyer will want to know enough about it to be able to say “We are not doing it now because …”, or “We are particularly interested in … – and we have a trial underway”.
  2. Things are often fashionable for a reason. Moving surveys from telephone to online was a fashion, but it was also the right solution for many organisations. Being late to implement a good and well known solution is more likely to be damaging to a career than being late to adopt a little known innovation.

Following your interests
Most of the really interesting client side researchers and research users spend a small amount of their time (and sometimes budget) looking at things they find interesting. These people are indispensable to the research industry and progress, these were the first people to try semiotics, MROCs, implicit association testing, etc.

Talking to these research users, the key benefit seems to be the creation of a better and wider context. The new system they try often does not deliver ROI, it is often not repeated (at least not by them), but the experience, and in particular the identification of what it answered and what it did not, help frame future projects and thinking.

Ask for the possible
So, I feel that it is lazy and unreasonable to say ‘clients should keep abreast of all the new developments’. Clients need to do that which is possible and that which generates the best net return for their business.

Vendors of new ideas need to do more to make their case, probably by tending to work with other similar vendors (as opposed to bad mouthing them). The number one task for a vendor of a new technology should be to grow the sector, unless they are happy with being a niche player I a niche market. Vendors need to realise that even if their system is better, it may not be the buyer’s top need or priority.

Comparisons and Guidelines
One way to help clients be more informed is to provide good comparisons and guidelines. The ARF studies into panels and into neuroscience were great for the industry and for clients. ESOMAR’s 28 Questions for Panel Owners are a great aid to clients. The study that Freshminds published in 2011 comparing several social media monitor tools was another good initiative.

The ARF study into panels was largely driven by research buyer concerns about quality – perhaps the answer is for buyers to fund comparative studies. Providers could fund it, but why would buyers believe a vendor funded report?

So, what are your thoughts? Do you think it is reasonable to expect buyers to be aware of every major new tool, technique, and approach? What strategies do you use, or would you suggest?

May 232013

In this month’s ESOMAR Research World magazine David Stark, GfK’s VP of Integrity, compliance and privacy for the Americas, has written a great article on W3C’s Do Not Track project (DNT). DNT extends the logic of Do Not Call legislation to the internet. If DNT (Do Not Track) is implemented, which it probably will be, probably next year, then a large part of online passive market research will become impossible. It will also be much harder for website to analyse their visitor and user statistics, which will, in turn, make it harder to optimise their sites and harder to make a living from selling advertising.

ESOMAR is involved in the WC3 DNT working group and is making the case that market research should be exempted from the DNT rules (for anonymous market research), just as market research tends to be exempted from DNC (Do Not Call) rules and some provisions of data protection laws. Clearly, defending the role of market research in these discussions is in the financial interests of market research companies and market researchers. However, do we feel that there is a social justification for what we are asking for?

In discussing ethics, we probably need to distinguish between research that is done for a public good (such as some social research) and research that is done for the commercial gain of the organisation commissioning the research (which is the aim of most commercial market research).

It is fairly easy to see why research that is created for a social good, for example looking into better ways of identifying and tackling child abuse, should be granted special exemptions. Society wants that research to happen, and it wants the research to be as accurate and representative as it possibly can. The social good can be seen to outweigh the individual’s preference not to be phoned, or to be mailed, or to have their door knocked on, or to be tracked online.

What about a typical piece of commercial research? Let’s, for the sake of the discussion, take a research programme designed to pre-test an ad for a new type of cake. The purpose of the ad is to encourage people to buy the cake, i.e. people who would not otherwise have bought the cake are tempted to try it, and/or people who are already buying it are tempted to buy more of it. Can we argue that there is sufficient social good for individual preferences to be ignored? Why in these cases should society extend market researchers the privilege of ignoring people’s wishes (e.g. contact people on DNC lists, tracking people who have set their browser to DNT)?

Of course, there is market research which may have some social good. Researching consumer preferences so that products and services can be designed so that they match their needs could be said to encompass a social good. But it is hard to argue, I feel, that most market research falls into this altruistic niche.

There is a slightly more nuanced defence of special treatment for market research. In this view, society (through its legislators) makes a deal with the market research profession. The profession agrees to a set of rules, such as anonymity, not incurring any cost or damage for the respondent, storing data securely etc, and agrees to police its own members. In return, society grants this profession some exemptions to make it worthwhile being a part of this system. In this case the individual receives a social good in return for the loss of personal choice (for example the loss of the right to stop market researchers phoning them or using tracking cookies on websites). However, as the so called ‘cowboys’ have shown, this system only remains viable is most people in the field agree to be bound by the rules – and in the area of many forms of passive research (cookies, tracking, social media) there are many organisations who are not bound by the market research rules.

If we look at the world from the point of view of an ethical, commercial research industry, we would want citizens to have a range of privacy options to choose from. They might be able to say yes or no to sales, yes or no to market research, yes or no to advertising – but not able to say yes or no (in advance) to social research. However, if we look at that from the point of view of the citizen, it is quite likely that they would not be interested in being offered that degree of choice – they may prefer to be able to say no to all of it, in one easy step.

My feeling is that the world is changing in favour of individual rights and away from statist assessments of what is good for people. I suspect that DNT will include market research (soon, if not straight away), and I would expect anti-spam and anti-call rules, systems, and laws to increasingly be applied to commercial market research. Personally (and I am not speaking on behalf of any of the organisations I work with), I find this hard to object to on moral or ethical grounds – although it will make it harder for my profession to make money.

What will happen if DNT, DNC, etc. become common and applied to market research? We’ll have to conduct market research with people who opt-in. We will see most market research being conducted with access panels and insight communities – which is where most of the industry is going anyway. So, perhaps the future is more of the same, and less of the past?

DNT being applied to websites is, however, likely to have some unintended consequences. In David’s article he points out that people who turn on DNT are initially freeloading on the system. Most free sites make their money by selling advertising; people who don’t see the ads are being ‘paid’ for by the vast majority who see the ads. If DNT becomes common (and it looks as though IE and Firefox will default to DNT – and most people don’t change the defaults) then the majority will be freeloading. At this point the business models will have to change. Many of the free sites will have to be gated in some way, either by asking people to pay, or to register, or to complete a short survey – which opens up a new set of opportunities.

So, what are your thoughts? Do you think there is an ethical or social reason why citizens should not be able to opt-out of being contacted by market researchers? Even if there is not a social reason for exemptions for our industry, is it our negotiators’ job to make our best cases, and for the regulators and legislators to assess the best solution?.

May 192013

1 It’s not your classic textbook
This book focusses on the questions that are part of the everyday practicalities of market research, the advice you don’t typically get from a textbook – the type of advice researchers would ideally have a mentor or more experienced colleague to ask – unfortunately not everyone has these support networks.

2 The contributors are practitioners
The content has been prepared by a team of experienced researchers, so the advice is relevant for researchers who are talking to clients, writing proposals, managing projects, developing questionnaires, analysing data, reporting results, etc.

3 A great resource for the generalist or research all-rounder
(Thanks to Sue Bell for emphasising this point.)
Many conferences and events, social media forums, and journals focus on specialist areas. This book, doesn’t cover everything, but aims to give a solid grounding on the basics, written and reviewed by experienced market and social research industry heavy weights who know what you need to know.

4 A balance between traditional and new techniques
The book covers the traditional areas – questionnaire design, qualitative, pricing research, B2B – as well as the emerging techniques, for example, communities and social media research.

5 A variety of views of expressed
In some areas of our profession there is not a consensus view – particularly in new and rapidly developing areas. This book highlights areas where consensus does not exist and presents the differing viewpoints.

6 The Client perspective is explored
Special attention is paid to one of the key relationships in market research, that of client and research provider, with an emphasis on the points of tension.

7 A Global Perspective
Unlike some textbooks, which focus on specific markets or regions, this book recognises many researchers are operating in international markets and also the issues and challenges faced by those working in markets with different levels of economic and technological development.

8 Ethics, Laws, Codes and Guidelines
As could be expected of book put together by ESOMAR, the book explains in simple and clear terms why we have these and how to fit them into everyday research.

9 Advice for both new researchers and more experienced researchers who are new to a topic
Thanks to Phyllis Macfarlane for emphasising this point.

10 It’s great value, at 20 Euros (including postage and packaging)
And, if you like it so much you want to bulk order for colleagues, clients, or students – better prices are available via ESOMAR!

Join us at the book launch
On Wednesday, 22 May, ESOMAR and NewMR are holding a virtual book launch, where contributors to the book will explain the book’s mission, its content, and more about how you can be involved. Click here to find out more details and to register to attend.

So what do you think?

Declaration of interest, I am one of the Editors and Curators of the project (as was NewMR’s Ray Poynter) – Sue York

May 152013

The Gen2 Advisors, headed by Lenny Murphy, have produced an 80 page report on Social Media Analytics, entitled “From online chatter to meaningful insights”, which is available for purchase, and they have produced a free 10 page resource as a ‘How to’ guide (click here to access the free guide).

The Gen2 Advisors were kind enough to share a copy of their full report with me and here are my thoughts, reactions, and observations.

The report starts by highlighting that social media analytics is necessary but not sufficient. Brands need to use it, otherwise they will miss key insights, but on its own it can’t provide everything that is needed. Although the report is a bit more evangelical than I would be, it does, mostly, manage to stay on the metaphorical ‘yellow brick road’, by providing information and views that are useful, rather than just hype.

The report is targeted at marketers who want to use social media analytics – which makes it of great interest to insight professionals, since we want to know what the marketers know (and ideally be a step ahead of them).

End-user view and quotes

Within the report, extensive use is made of interviews with client-side users of insights, including comments from:
  • Citigroup – calling for more judgement and less waiting for quantification, if the quantification is going to be too late
  • P&G – looking to use social media as a ‘real time equity monitor’
  • McDonald’s – the value of reading real conversations on Twitter
  • USA Marine Corps – listening to Facebook conversations to guide its future SM activities
This is a really useful approach as it helps frame social media analytics within the client’s ecosystem.

Case Studies

The report has several case studies, although they are a bit shorter than I would like, but I am a case study junky. Interesting examples include:
  • Microsoft and Alterian linking Twitter information, from several thousand volunteers, to demographics and answers to surveys
  • Shell’s crisis management around Greenpeace’s
  • Macdonald’s pilot and adoption of social media insights

Key Sections of the Report

Key items covered by the report are:
  • Monitoring brands and brand equity
  • Advertising
  • Public relations, promotions and crisis management
  • New product development
  • Monitoring product launches
  • Customer experience and support
  • How to establish a social media insights program in your organisation
  • The implications for market research
  • How to choose a system or vendor (including a long list of social media monitoring software and platforms)

In my opinion, the least convincing section is the one on the implications for market research. But I think that for most readers this will also be the least relevant. Most readers will be more interested in the breadth of what is happening, how companies are using it, and how to go about implementing it. Some people are interested in the implications for insight professionals, and they will enjoy agreeing or disagreeing with the opinions in the report.

A guide for neophytes?

Most of the report will not come as a surprise to people already active in the field, although there are certainly nuggets for them – especially some of the cases and arguments. However, the strength of the report is for people completely or relatively new to the field, people who want to understand the key techniques, wants to know the main arguments, and would like to hear some case studies.


The report is a relatively balanced view from perception of people who really believe in social media analytics. A balanced view from sceptics or neutrals would differ in places, but the key points would be the same.

A good example of the impact of it being written by enthusiasts is the point about crisis management where the report makes the point that monitoring social media can allow a brand to “Nip potential PR crises in the bud.” My view, as a sceptic who uses social media analytics, is that there too many potential crises in social media, so issues spotted in social media should be put on a watch list, and if they start to spread to other forms of media, or start turning up in other locations, then deal with them. The difference between the enthusiast, the realist, and the sceptic is mostly one of degree – pretty much everybody agrees brands have to listen to social media.

The report includes some great advice, for example ‘look beyond the brand category insights’. But probably its key strength is in emphasising the breadth of social media analytics and the wide range of organisations that are benefitting from it.

One minor niggle is that the report has a major USA slant. However, this is not a major problem, as most of the learnings are directly transferrable – especially to other Western and/or developed economies. There are some items which I disagree with. For example, the claim about the accuracy of automated sentiment analysis. But, unless I had written the whole report, there were bound to be areas of disagreement. No reader of any report (or blog post) should assume that everything in it is right.

Want the report at 50% of the cost?

Gen2 Advisors have offered readers of this blog a 50% reduction in the prices of the full report (its full price is USA$ 490). To buy the report with a 50% discount you need to go to the Gen2 Advisors website and use the following discount code GEN250?

May 102013

Marketers and market researchers are always looking for stories that provide evidence for the value of what they do. Sometimes we get the evidence in the form of stories where people implement the research and the campaign and there is a positive outcome. But it is rare for the other story to be told, what happens when marketers, market research, indeed the whole principle of evidence based decision making, is ignored.

However, the New York Times has a very clear expose of what happens when evidence is ignored, the story of Ronald B Johnson’s 17 months at the top of US retailer JC Penney. It would not be fair of me to steal all of the story, and I would not write it as well as Stephanie Clifford has written it, so please read it here. However, a few of the key points are:

  1. Johnson arrived with a stellar reputation after helping build the Apple stores.
  2. “many of his ideas were not tested and soon backfired”
  3. “he was pretty sarcastic about our marketing and how ridiculous it was”
  4. “He ignored a study Penney had just completed on customer preferences, and gave merchants a one-sheet grid explaining what prices they could use.”
  5. “When the new pricing was introduced in 2012, sales fell.”

After 17 months the board of JC Penney had had enough and at the beginning of April voted to remove Johnson. Those of us who believe in evidence based decision making can’t ascribe all of JC Penney’s woes to Johnson not using the available evidence, we can’t even ascribe all of JC Penney’s woes to one person. However, this report in The New York Times paints a very interesting story and highlights the dangers of not listening to customers and not utilising the best evidence available.

Many thanks to Quirks for highlighting this story – and please do read the full article, I have just cherry picked a few key points – read it here.

May 092013

One of the questions I am frequently asked about insight communities is ‘Why are most of them composed solely of customers?’ ‘Surely’, some people ask, ‘we should be conducting market research with the whole market?’ My feeling is that this question fails to recognise how much market research has changed over time. Over the thirty-five years I have been in the research industry there have been quite a few changes, in terms of technology, organisation, methods etc. One of these changes has been a major shift from researching whole markets to focusing research on customers.

If we look back at the 1970s and early 1980s, most market research was conducted with the whole market. But that approach reflected the times. There were fewer products, fewer brands, and fewer channels for advertising. Markets were less mature, brands were establishing themselves, they often had genuine product differences, and market researchers were like explorers, mapping an unfamiliar land.

Moving to the later 1980s and the 1990s we see a shift to researching target groups and customers. Ad and brand tracking focused on target groups, customer satisfaction focused on customers. Concept and product testing, which had previously used whole market samples, started to focus on heavy users versus light users versus non-users. In the market place, the number of brands and lines had grown, product advantages were proving to be illusory or temporary, and the battleground was shifting to logistics, sourcing, and image based advertising.

Since 2000 the focus in marketing has moved on again. Most brands manage to achieve product and service and advertising parity. Organisations have become much smarter about calculating the cost of customer acquisition, lifetime value, and the problem of churn. For many brands the issue has become increasing share of throat, size of shopping basket, and total usage. The focus in much of the business literature is to use customers, and co-creation, as a key source of competitive advantage. Forrester has even been advocating the customer obsessed organisation.

The writings of authors such as Mark Earls (Herd) and Rijn Vogelaar (The Superpromoter) have highlighted that brands tend to succeed through social copying, rather than through non-users being ‘persuaded’ by marketing or advertising. In many cases the best way to grow a brand is to increase the number of customers who ‘love’ it, because these people will recommend it, use it ostentatiously, and offer it in group settings. In most cases, a new line, a new campaign, a new service will only succeed if existing customers respond positively to it.

Given the shift from the whole market to customers in the wider research world, it is not surprising that most insight communities focus on customers. There is a community of interest between a brand and its customers, they all benefit if the products and services are improved. Customers know about the strengths and the weaknesses of the brand, they are in a position to give insight into where the brand should go next.

What proportion of research should be with customers?

For most brands and services (I will mention some exceptions in a moment) my feeling is that about 80% of research should be with customers. This would include measuring satisfaction, usage, testing product and service concepts, product and service refinements, and co-creating the future.

The 20% conducted with the wider market would include market sizing, mapping needs in the market, and competitive intelligence (for example why do users of competitive brands use that brand).

This 80:20 prediction is based on two key points:

  1. The brand is most likely to grow through social copying/recommendation/word of mouth.
  2. Most good ideas for the brand will be seen as good ideas by customers.

The exceptions?

The main exception to the 80:20 rule is where the main focus is to massively grow the number of users, either from a zero start (a product launch) or from a very small base. Examples of this situation would include Apple when it launched the iPod, iPhone, and iPad. When these products were launched Apple had no customers in these segments, and the users of existing MP3 players, smartphones, and tablets were not their primary target – so researching customers was not a viable strategy.

In summary

Most brands and services focus on customer retention, providing the right products and services to delight their customers. The thinking behind Fred Reichheld’s Net Promoter Score is based on data that shows that brands that do well have more people who recommend them. A key finding from Andrew Ehrenberg’s double-jeopardy model is that dominant brands have customers who are more loyal.

Most market research, for most brands, most of the time, should focus on customers. This customer focus is one of the key reasons why insight communities are currently so popular. Insight communities are not pushing brands to focus on customers; the focus on customers is pushing brands and organisations to use communities.

So, what are your thoughts? Feel free to add your comments, or vote on the poll below.

May 022013

There is a widespread view that people in poverty pay more for their products and services than richer people. This price difference was described by C.K Prahalad and Allen Hammond as the poverty premium, in an article in the Havard Business Review (HBR) in 2002 – which Prahalad expanded on in his book ‘The Fortune at the Bottom of the Pyramid’. However, an article by Ethan Kay and Woody Lewenstein in the April 2013 edition of the HBR cast doubt on the theory, and showed results of an experiment that illustrated that the poverty premium is not always present. The implications for this theory being wrong can have major implications for marketers and by implication market researchers.

The idea behind the poverty premium is that more affluent shoppers can buy more efficiently, for example by driving to discount stores or by buying in larger pack sizes. At one level we can see this is true, the price paid for a can of Coca-Cola in a convenience store in a poor neighbourhood is likely to cost more than the proportionate costs of one can of Coca-Cola purchased as part of a multi-pack from the local equivalent of a WalMart.

Kay and Lewenstein report on an experiment that conducted a study in two parts of Mumbai, India. The first region was one of the world’s largest slums, and the second was the up-market area of Warden Road. Kay and Lewenstein arranged for representatives to buy 40 products from 17 stores in the rich area and 17 in the poor area. They matched the products in terms of effective use, but not in terms of brand or format. The rice purchased in Warden Road might have been in a branded package, and the rice in the slum might have been unbranded and sold loose. The result was that the products, which included electricity, a comb, rice, a haircut, cooking oil, a dress and bananas, cost more in the richer area – i.e. the poorer consumers were not paying a poverty premium, indeed they were paying less than 20% of the figure paid by those in the better off area.

Kay and Lewenstein put forward a Western misunderstanding of the poverty premium as the reason why many new product launches in the developing markets. As an example Kay and Lewenstein describe how Dupont owned Solae launched a soy protein product in the slums of Mumbai – aiming to capitalise on Prahalad’s ‘fortune at the bottom of the pyramid’. The Solar product was launched on the market at 30 cents a packet and failed. Lentils, a staple part of the local diet (i.e. in the slums of Mumbai) can be purchased for less than half the price of the new product.

Kay and Lewenstein illustrate their point with several other cases, all illustrating how Western brands can badly misjudge the bottom of the pyramid. Kay and Lewenstein also explore some of the reasons for the low prices charged in the slum (beyond selling items loose and unbranded). The reasons include the assertion that many of the vendors in the slum are working in the informal economy, not paying taxes or license fees, nor paying the minimum wage, nor incurring the conventional costs of doing business.

The paper from Kay and Lewenstein does not definitively rebut the notion of the poverty premium, but it certainly casts doubt on the way it is sometimes interpreted. The doubt it casts is based on argument, a controlled experiment, and providing credible reason for why so many products and services aimed the bottom of the pyramid fail. The lesson for marketers and market researchers is that in assessing a new product they should not pay too much credence to theory, nor should they assume that the cost bases for competitors is as high as official figures might suggest it is.

The article by Kay and Lewenstein can be accessed here – be sure to read the comments, which include support for the Prahalad view, and an assertion that the authors had misquoted Prahalad’s explanation of the poverty premium. However, the interpretation that Kay and Lewenstein use is certainly a common one, for example it is the bases of Save the Children’s claim in 2007 that poor families pay on average £1000 a year more for essential goods and services in the UK.