Stacey and I went to the Insight Show at Earls court yesterday to have a look around and see what new methodologies and developments are on offer today. We were focused on online research since we have been moving our own tools into the online area as it seems to save cost, allow us to reach new audiences and creates speedier delivery.
But we found consistent with our own recent experiences, the online tools are now moving from being cheaper and quicker to being better and more effective.
One of the presenters, powerfully made the point that the research business has itself to blame for the slow development of online work. He showed an image of the Amazon website in 1996 and contrasted this with the tools and capabilities of the 2006 version. Whereas a look at a survey in 1996 showed not much difference from one in 2006. We are all still putting face to face techniques and paper questionnaires onto a screen.
But things seem to be changing. We noticed three powerful trends (of which we have used one and are developing the second)
- Introduction of flash tools to create much more intuitive survey formats that allow respondents to interact with the packs, the brands the images and the films in a way to creates a better and more useful response than can be obtained in traditional ways.
- Significant developments in the scope and penetration of online panels allowing recruitment of previously difficult to reach markets such as wealthier consumers and business decision makers.
- The creation of virtual panels to allow you to have continuous and direct feedback from customers. This is less structured and might have the purist screaming "unreliable" and "not validated" but the directness can be very powerful. See Virtual Surveys
- New possibilities to do qualitative in ways that are quicker easier to view and analyse.
So why is this? PJ smoothies were the first into the category, they now have the marketing and distribution power of PepsiCo, a range of great tasting products and some attractive new designs.
Innocent have also suffered some adverse publicity in recent months for making excessive health claims about their products.
I suspect the answer lies in the observation that Innocent have commandeered the Power Attribute in the category whilst PJ’s seem to have neglected it.
Innocent have made a big play on the fact that they are just crushed fruit and nothing else, whereas a quick study of PJ’s bottle reveals fruit juices and concentrates. This affects both taste and authenticity. When you combine this relative weakness with the fact that many food service outlets will only stock one brand, it becomes it hard for PJ’s to make headway.
This would need a consumer led view of what is important in smoothies to validate it. But the hypothesis illustrates an important point about understanding Power Attributes so you can ensure your brand is competitive.
I remain astonished at how much discussion takes place in the marketing press about packaging and advertising and how little on whether the fundamental proposition is less attractive or uncompetitive.
The importance of looking at what people do, not just what they say, was bought home to me by a humorous example from Dr Clotiare Rapaille last week.
In research potential passengers what they would like to see in a new plane if money was no object. You won’t be surprised to know it was more space, greater comfort, better service.
This is all very well but there is a problem. People’s actual behaviour when money is no object is completely different. As soon as they can afford it they take a private jet; which has less space, less comfort and poorer or no service!
Why the discrepancy? Why do people’s behaviour result in the exact opposite of what they say they want? It is because when money is no object they focus on eliminating the things they really hate. Of course they would like more space or better service but what they want most of all is “no airport”. Private jets enable them to get as close to this as possible. Sufficiently close in fact that they will forgo the space, comfort and service in order to minimise the airport experience.
On the basis of this you can be pretty sure that “simple, quick airport experience” could be a power attribute for an airline!
What can we learn from this? Framing the context of any research is critical. In this example for instance people make their travel decisions on a much broader set of attributes than just what happens on the plane. By limiting research to just what happens on board potential opportunities to improve the whole experience are missed.
When people pay more for things and lots of people buy them, many will look in awe and think, how did they do that? The answer is that somehow, the creator of the product or service has imbued it with some power attributes that make it more attractive than the alternatives. If you can work out what these attributes are, then it might help you come up with Power Attributes for your business.
Lets take a current example. The iPhone has created quite a buzz and is charging a huge premium price. They are charging £269 plus at least £35 a month for a minimum of 18 months, which comes to £899. For most fancy new phones today, people either pay up to £200 for the phone or £35 a month for a contract which is far more generous than the iPhone contract.
So will it work for Apple, will enough people pay? The early signs are that they will, O2 assert it is the fastest selling handset ever. This is despite a number of features that are missing from the phone. The camera is only 2MB, the internet is not 3G, there is no MMS, the battery life is short, limited ring tones, it does not work as laptop modem, the on screen keyboard is unfamiliar etc. Both iPhone competitors and the geeks on the blogosphere will point this out. (type in "iphone sucks" into Google)
Judging by the initial reaction, iPhone have got some things right. Obviously they have created a really cool image compared to a Nokia, Sony Ericsson on Samsung. How did they do that? In our experience there great image and reputation has a functional underpin. Identifying the Power Attributes will help you to work out not just the image strengths but to understand the functional benefits the product delivers. What might the attributes be in this case? Here is a short list
- beautiful appearance,
- the latest gadget
- smooth easy to use operation
- real internet access (not wap)
- easy to use email
- multi tasking between functions
- my friends notice I have it
- the best handbag/briefcase jewelry
- a big screen so I can read the content
- can watch real video.
There will be 20 or 30 of these attributes that can be discovered through brainstorming or workshops with consumers. The question is how to work out which are the real buzz attributes. Once you know this, then you will understand why people choose the brand and why they pay more for some things rather than others.
Our paper on Power Attributes discusses how to do this in more detail click here
Once you know which are your Power Attributes, then make sure you invest in them and tell your customers. If you are not sure which are your Power Attributes, then find out quickly before your competitors find out and steal them from you.
We have spent a lot time with our clients looking at these value offers. We have seen some really difficult situations arise as a result of both the brand and the consumer becoming addicted to value offers. What starts out as a simple idea to help the business hit sales targets in a difficult year, then starts to eat away at the business and soon the "offer price" becomes the "normal price" at which 70-80% of the volume is sold.
So when Marketing reported that the IGD found 25% of consumers have tried a new product as a result of a BOGOF, we were provoked to write to Marketing. The editor seemed surprised by this finding. We were not. Why should this be a surprise? Some really thorough and objective research by Andrew Ehrenberg has found that brands only get more growth when they attract new trialists AND get previous buyers to buy more often. Growth is always due to greater penetration and increased purchase frequency. It is just not possible to attract loyal consumers to buy more often without persuading new users to try the brand as well. The two thing always happen together. click here for articles
The other interesting observation is that trial is always the best way to produce brand growth as confirmed by the IPA analysis of marketing effectiveness. Programmes which had loyalty as the objective "underperformed on every single business metric". Whereas trial programmes were more effective.
So if trial is the goal and BOGOF’s produce trial, maybe they are a good idea? But the IGD states "people buy the BOGOF and do not come back". This leads to BOGOF becoming a drug. Value offers become the only way to hit volume targets, but they train buyers to wait for the next offer. So brand owners and consumers get addicted to them, when the real question is why is the product is not attractive at the normal price?
In contrast, the fastest growth is often in premium markets. I get regular Google updates on "premiumisation". Every week someone declares this is the reason for stronger sales growth. Maybe there is another way. Find out what buyers really want, because when you do, they will pay more for it and you will sell more of it.
See our Power Propositons case study for a great example of moving bags of compost away from value offers to premium products.
Synopsis of this post
Generating customer insights is still too formal, too slow and built around an old fashioned model of decision making. To get more growth, we must look for new entrepreneurial ways to understand the changing customer needs, so we can respond more quickly
Recently I was reading an interview with Gary Hamel on innovative management and the ways businesses need to adapt to a world that is shifting away from hierarchical control based organisations to a more interdependent network based style. So instead of teams just following the orders of the boss and using the company’s own internal resources, we find self directed people and motivated teams proactively seeking opportunities that will benefit the business. They do this using a mixture of internal resources and alliances with customers and suppliers.
This has become possible as businesses have moved from manufacturing products dependant on large scale capital and organised labour to creating value through ideas and services that are more thinking intensive and less dependant on these rigid manufacturing scale economies. See this link for more discussion on this.
Our earlier discussion about the role of the internal entrepreneur highlighted how growth is often driven by a few committed individuals who have the vision to ensure their idea will succeed and are prepared to kick down the doors and constraints of the organisation to ensure the new product or service is launched. These people seem to be in the vanguard of this change and are prepared to try out new ways of working to get things done. These internal entrepreneurs know that they need to deploy the entrepreneurial drive of the smaller business but must harness the financial, brand and system resources of their company to get the idea off the ground.
This is no different from the ways successful entrepreneuers operate. They see the need to find out what customers think and do it all the time. Anyone who has seen Stelios on an Easyjet flight or Richard Branson on a Virgin plane will know that they talk to the people on the plane.
Some specific things we have tried and seen other people try
- Fast turnaround online survey tools using something like www.surveymonkey.com
- Internal surveys to capture the organisations’ experience of customers
- Spend time at your internal meetings gathering customer experiences (encourages people to get some customer experience of their own if they know they are expected to contribute).
- Creating your own panel that you can invite in to react to new ideas and give feedback.
- Set up self managed product or concept testing in venues where the target market congregate e.g. university canteens, gardening clubs, trade shows.