Quirk's Blog

What digital addiction means for consumer ad consumption

Editor’s note: John Bremer is group chief research and strategy officer at research company Toluna, Wilton, Conn.

It almost goes without saying in the age of digital/social media but I’m going to say it anyway: The way and frequency with which media is consumed has changed dramatically, and those changes will continue to evolve over time. As market researchers, it’s our job to understand how marketing/advertising messages need to be constructed and delivered to reach the right audiences, with the right messages and at the right time. While behavior around media consumption has changed, our role as advisers and guides has not.

We recently conducted a survey of a representative sample of adults in both the U.S. and U.K. to determine exactly how media consumption patterns have changed.*

Not surprisingly, we discovered that people are consuming media differently than they had just a year ago, and that they are using a variety of devices to conduct an ever-expanding list of activities. Also probably not surprisingly, variations in consumption patterns are impacted more by age than any other demographic factor.

Technology and social media are impacting our lives

People are using the Internet and devices more than they had just a few months ago. PC’s remain the most frequently used device (79 percent), followed by laptops (73 percent) and then smartphones (55 percent). Tablets use came in at 46 percent. Seventy-three percent of adults access social media regularly, and 71 percent of those that do, do so using multiple devices. Interestingly, we’ve also found that with the exception of smart TV Internet users (23 percent of respondents), those that engage in the most activity across all platforms, tend to engage in the most the activity on each individual platform as well, so activity begets activity. Further, we’ve found that the more you do within a platform, and across a platform, the happier people tend to be.

There can be a point where consumption can be a bit obsessive. We found that there was a subset of those studied that are always on. Two-thirds of smartphone owners sleep with their phone by their bed. One-third of those who sleep with their phone by their bed wake up in the middle of the night to check the phone!

What does this mean for us as marketers and market researchers? People are online. They are engaged but engaged in more and different types of activities than ever before, and they likely have different levels of receptivity to messaging. We need to reach people in more complex ways and be cognizant that they’re not always going to see the messages we’re presenting to them (specifically those that wake up to check their phone – I hope).

We found that people between 18 and 24 years old use their smartphones for far more activities than their counterparts in the 35+ group, while still spending some time on PCs and laptops to surf the Web or watch TV shows and movies. This age group (let’s refer to them as youngsters) typically use smartphones for accessing social media, reading the news, searching contact details, watching video clips, banking and listening to music.

They consume more media overall (eight hours and 25 minutes as compared to seven hours and 54 minutes for the 35+) each day but almost an hour less watching TV. They swap this for more time on social media and surfing the Web.

Figure 1

Those in the 35+ age group are also consuming media differently. Further, we anticipate that they will adopt behaviors that are similar to youngsters with regard to their online behaviors (as they always do). As of now, activities like banking, using social media, watching television shows and general Web surfing are typically done via laptop or PC as opposed to a smartphone.

Figure 2 The study looked a bit more deeply into the possibility for media addiction. We included a battery of questions created by psychologists at East Carolina University, coupling behavioral and attitudinal indicators. Of 18-to-34-year-olds, 30 percent seemed potentially addicted to media consumption, while 18.9 percent of 35-to-54-year-olds could be considered addicts. Only 8.6 percent of respondents that were 55+ could be considered addicts. Addiction is a concern for many reasons for us in the market research industry. As we mentioned earlier, we felt that addicts (those that check their phone by their bedside likely included) were less likely to be receptive to advertising messages (Figure 2).

It’s clear that marketers are aiming at a moving target. Younger people consume more media differently, and as a result, are less tuned-in to advertising messages. Not only do marketers have the challenge of determining how best to reach consumers, and make their messages relevant, they need to realize that cutting through the clutter is not an easy task.

For our part, as market researchers, we need to offer holistic media measurement solutions, in addition to insights about the landscape as a whole, as media consumption changes are occurring in almost real-time. To that end, marketing must become more and more individualized. Market researchers can create more sophisticated segmentation aimed at reaching individuals on a more personal level. That’s how we can best help our clients understand and better deal with changing patterns in media consumption.

 

*The survey used the Toluna QuickSurveys platform, with data weighted with respect to the following demographic variables: age, gender, region and income.

Posted in Advertising Research, Behavioral Research, Consumer Psychology, Consumer Research, Market Research Findings, Social Media and Marketing Research | Comment

Share of shelf, share of wallet and now share of buttons: Amazon Dash

Editor’s note: Nicole Munsey is a director at research company Ipsos InnoQuest, Chicago. This is an edited version of a post that originally appeared here under the title, “Share of buttons? Yea, that’s a thing now.”

The other night, I logged onto Amazon looking for a new book to download. (Let’s all just assume it was something really smart about innovation strategy and not the latest young adult dystopian-future novel series, shall we?) As soon as I logged on, I was presented with a home screen image of a hand holding a button-like contraption with a Tide logo on it. As a Prime member, Amazon tells me, I have exclusive access to Amazon Dash. I made a mental note to figure out what this was the next day and settled into my dystopian-future novel riveting book about innovation strategy.

The next day my inbox and news feeds were flooded with articles about Amazon Dash. Is this an April Fools’ Day joke, some of the articles wondered? No but perhaps it is a brilliantly timed launch to get people asking the question and talking about it. Did this just change the future of shopping? Did the Internet of things (IoT) just reach a tipping point? Yes. No. Maybe. It depended on which article you read. Working primarily in CPG, my first thoughts were around how something like Dash could impact my CPG clients … and also, that Dash seemed like it was just ripped from the world described in my innovation strategy book dystopian-future novel.

What is Dash and why do I care?

laundry detergent podsDash is, simply put, Amazon’s 1-Click ordering in physical form right in my house. It’s a little button, or rather, many little buttons that I can choose from. I get a button – a Tide Pod button, a Cottonelle or Gillette button – and place it somewhere convenient in my house (it comes with adhesive and hooks for easy placement), for instance on the bathroom counter or adhered to my washing machine. When I’m running low on Tide Pods, I push the button. The button is synced to the Amazon smartphone app and just by pushing the button once I have a refill order of Tide Pods on its way to my house.

There are already over 250 products/buttons available on Amazon’s Web site, with a promise of many more to come. Dash 2.0 is already in the works – Dash Replenishment Service – which will allow appliances like Whirlpool washing machines to automatically sense when I’m running low on certain consumables (laundry detergent) and re-order the product for me automatically – thank god, I’ll no longer have to go to the trouble of pushing a button.

Why do you care about Amazon’s latest innovation? If you’re not Cottonelle in toilet paper or Tide in laundry detergent, you’ve got a problem with me (and likely many of my Millennial friends) … I ordered the buttons and by default, I just became 100 percent brand loyal to those brands.

That’s right. I just gave my loyalty to Cottonelle, Tide or any of 250+ other brands. Not because they are necessarily better quality or better priced but because they have buttons, and I don’t have to think about buying toilet paper and laundry detergent anymore. If you don’t have a button, how do you even get in my consideration set anymore? I’ve actually stopped considering the category entirely. I just push a button and the product shows up at my house.

The IoT, Dash buttons, automatic re-orders of previous purchases and automatic replenishment of supplies by our smart homes and our smart appliances are now fundamentally changing the way we interact with brands and categories. We don’t have to interact with them anymore. The challenge for CPG marketers in this dystopian world of the IoT is how to become the brand consumers rely on within a category so they can stop thinking about the category entirely.

You’ve got to get your button in my house.

Which means developing an IoT strategy that partners with retailers, appliance/durables makers or markets directly to consumers to get them not just to buy your product each time at the store but to install your button, your app or buy the washing machine that automatically re-orders your detergent so that consumers automatically buy your product every time.

But you’ve also have to think about how many buttons consumers are willing to put in their homes.

But, I make toilet paper … now I compete against razors?! 

You sure do. Just thinking about the bathroom: I could have buttons for a smorgasbord of shampoos, conditioners, hair sprays, make-up, skin care, soap, razors, toilet paper, toothpaste, etc. The reality is, I’m not going to decorate my bathroom with dozens of Dash buttons, even if they are all for different categories of things I need. Which means your IoT strategy must also think about how to compete against adjacent categories for a share of buttons. As a consumer, I’m going to stick either a razor button or a toothpaste button on my bathroom counter but not both.

The situation is similar if you have an app instead of a button. I might download a couple of CPG apps and a couple of retail apps but I’m not going to download all of them. Now you’re competing against other apps for share of my phone space!

I’m also only going to buy so many washing machines and coffee makers, and if I want them to do my product shopping for me, I’m going to be buying whichever consumable brand with which my appliances have partnered. Here at least you’re still competing within your category but selling to a different customer. In addition to consumers and retailers, you’ve also got to think about how to get your detergent or coffee partnered with the appliance makers and other adjacent categories innovating around the IoT.

Share of buttons – that just became something we have to think about and act against. Yep, in addition to share of volume, share of sales, share of shelf, share of wallet and share of voice, we’ve got to be thinking about share of buttons. This not only means actual Dash buttons but more broadly, thinking about a CPG world in which consumers are increasingly shifting from low involvement to no involvement with apps, Web sites, buttons and even household appliances auto-ordering.

Despite the numerous predictions over the years of an explosion in digital CPG marketing and shopping behavior, it’s still only a fraction of overall CPG sales and marketing. The IoT is still more of a discussion topic than an everyday reality. And while we don’t know when the tipping point will be, there will be one.

In the meantime, the launch of Dash does underscore that the next big thing to grow share, or sales, in a CPG category might not have anything to do with new product development within the category. It may, however, have everything to do with how people interact with (or don’t interact) the category, how they shop (or don’t shop) or which player in the category had the foresight to partner with the washing machine maker or the e-tailer on their new innovation.

Posted in Advertising Research, Brand and Image Research, Consumer Research, New Product Research, Retailing, Shopper Insights | Comment

Upholding data privacy standards is more important than ever

Editor’s note: Terry Wiley is CEO, Asia Pacific, of market research firm Lightspeed GMI, Sydney. This is an edited version of a post that originally appeared here under the title, “Data-driven marketing and the privacy paradox.”

As our lives become ever more digitally-focused, so do the means of technologically that amplify our reach to consumers. Data-driven marketing is now commonly accepted as standard practice for the industry. This is no surprise, as the online world intertwines with the physical world through the devices we have come to rely on.

Data privacyOur phones not only show us how to get somewhere but also track our location. Our computers help us locate our next purchase and also record our Internet searches. With the introduction of time-savers such as automated smart refrigerators, it is no wonder that marketers, researchers and consumers are all excited by the prospect of convenience brought by technological advances.

This advancement comes with great responsibility for marketing researchers ensuring protection and interaction are carefully balanced. Privacy has long been discussed in online market research, and rightly so. The conversation has gone from protecting personally identifiable information to more recent developments in the serving of cookies. As the world becomes more digitally driven, the number of ways to collect data and the appetite of brand owners seeking and utilizing data has exploded. The need to understand and uphold privacy standards is more pertinent than ever.

From a business perspective knowing what people are looking at, engaging with and creating can provide in-depth insights into their potential buying behavior and other consumer-driven decisions. But how much is beneficial for the individual consumer? How much is dangerous?

According to Truste, 87 percent of consumers polled are hesitant about data being gathered and used for corporate purposes beyond their knowledge or permissions, in comparison to a recent Lightspeed GMI survey which found a lower concern at 68.5 percent panelists, perhaps as a reflection of a slightly more online segment.

There have been arguments that consumer hesitance toward data collection is beginning to lower further due to the intimate relationship we have with our devices. However, our study shows that 70 percent of respondents are very concerned about data privacy on their smartphones specifically, in comparison to 58 percent on PC and 55 percent on tablet.

Consumers are not afraid to act on these concerns, with a 59 percent average deleting cookies, messages or browser history to control their security risk. Deloitte found that 70 percent of consumers would consider breaking off a relationship with a brand if that company failed to protect their data. Another 56 percent said that selling anonymized data – information that has had personal identifiers removed – would result in similar decisions.

Company compliance

Sixty-five percent of global panelists believe current regulations are not good enough. Privacy reforms in light of data growth are key areas of business ethical and legal policy. In fact, we saw the Privacy Amendment (Enhancing Privacy Protection) Act 2012 take effect. Why the reform? Because, as ADMA’s Jodie Sangster sums up, the world was a different place when the 2001 legislation was passed – there was no social media, online and mobile data. It needed to be reformed in order to reflect the current environment.

Many of the concerns about data collection are related to a lack of understanding and knowledge of how their information will be used. “The lack of transparency as to what’s being done post-data generation causes a lot of fear,” said Kord Davis, author of Ethics of Big Data.

Sixty-six percent of our respondents would like to be more informed about how their personal data may be used. Common sense, for the most part, tells us that if we ask politely for something reasonable – with some rationale – our request will be granted. Ask respondents or customers for the information rather than just taking it.

More so, it is about using it in a way that makes sharing the data useful to the consumer in their future actions and experience. That’s OK and the consumer will appreciate this seamless, mutually beneficial transaction. As Nick Bowditch brought to life at AIMIA’s Future of Digital Advertising, we appreciate walking into our local bar where the bartender knows our favorite drink and already has it poured. But it would be weird if he had the same drink in our kitchen when we came home from work. There is a fine balance between being relevant and being creepy.

ACCC Chairman Rod Sims recently said, “Our action in this area serves a dual purpose. When advertising is untruthful consumers are misled and honest traders are put at a competitive disadvantage.”

The consequences are grave, as Google found out the hard way. Privacy issues around many public places in the U.S. ultimately led to the demise of the Google Glass project in January of this year.

Privacy will remain at the forefront of our activity, this is clear. A certain level of hand-holding is necessary – from data suppliers to brand owners, marketing insights teams to the consumer. As technology revolutionizes our access to data, it will also bring reforms and amendments to policies that protect everyone involved in this multi-way relationship. Connecting while protecting is imperative and it’s up to us all to get it right.

 

Posted in Advertising Research, Behavioral Research, Big Data, Brand and Image Research, Consumer Research, Customer Satisfaction, Data Privacy, Innovation in Market Research, Market Research Best Practices, Market Research Findings, Public Opinion/Social Research | Comment

Retargeting ads: too much, too late?

Editor’s note: Demetrios Tzortzis is associate principal of digital strategy at marketing technology and services company acxiom, Denver. This is an edited version of a post that originally appeared here under the title, “Out with the old in with the new: The demise of re-targeting?”

Retargeting ads are cookie-based How many times have you visited a Web site, clicked on or even purchased a product, and magically you start to see that product following you around the Internet for days or even weeks? Surely there is a better way to market to consumers. With the amount of data many companies maintain, the evolution of predictive modeling and our increased understanding of consumer buying behavior, there is a new game to play: It’s called pre-targeting.

In my recent move from New York City to Denver, I was in search of a vehicle as I knew my legs would no longer suffice in getting me from point A to point B. After walking and taking public transportation for several years – which really isn’t so bad – it became a daunting task to find the right vehicle as I was inundated with the plethora of makes and models. I didn’t anticipate the immediate barrage of retargeting by each and every car brand and dealer site I visited. I couldn’t seem to escape it! I would see ads on my Facebook feed and on nearly every site that I visited. Now, months later I am still being targeted for cars I no longer have any interest in purchasing. Car manufacturers and dealerships are not the only companies that suffer from the retargeting dilemma, which overwhelms or targets at the wrong time in the consumer lifecycle. I’m not saying that retargeting is not useful in the right scenarios; however, it’s problematic when based on past interests.

For many marketers, retargeting has been seen as a saving grace or last chance to make an impact on the consumer’s buying decision. The challenge with retargeting is that it is not yet smart enough to know when to target a consumer with ads and when to stop those ads, aside for the use of generic messaging. It could be that I may have just purchased from a competitor and just because I clicked on a link or visited a site does not constitute purchase intent. I may not even be in the buying cycle at all. Retargeting ads are cookie-based so they follow the consumer until a set number of impressions are exhausted, which can lead to negative brand impact instead of creating the desire to purchase.

Enter pre-targeting which uses a combination of first and third party data to serve the consumer relevant and timely messages through the most appropriate channel. Now, with the massive amounts of data and advanced predictive modeling, companies can glean insight into the consumer’s future purchase intent. Retargeting is based on cookies, which don’t know the consumer or their actual intent and lifecycle. Pre-targeting looks to leverage a company’s known consumer data, preferences (product, channel, etc.), demographics and advanced propensity models to make a scientific prediction of their future needs and desires.

If you have ever used a Google phone you may be familiar with Google Now which is an app that can essentially predict your day. It leverages geo-location, preference data, e-mail, search history, contacts and more. A relatively short period of time after installing the app it will tell you how long it will take to get to work, the best route, give you live flight updates and even offer events, restaurants and sights to see along your way … all without you doing anything. I frequently use this app to find local events and plan my journeys accordingly.

At this point you can start to imagine all of the integrated uses of pre-targeting. Not only is this useful throughout the consumers day, it is also highly individualized and targeted, no more irrelevant blanket advertising that people tend to ignore. Advertisers can take this a step further and use it to direct consumers toward what they were already going to do in the future and seamlessly incorporate ads into their daily routine served in a contextually relevant and timely manner. Increasingly in our ever-connected world where devices talk to each other, this method of predictive advertising will provide true value, especially when ads are based on customer preferences. It’s time to stop betting on the past and plan the future with pre-targeting.

 

Posted in Advertising Research, Consumer Research, Customer Satisfaction, Shopper Insights | Comment

Apple car by 2020? Why brand trust can be a very powerful thing

Editor’s note: David Myhrer is senior vice president, brand strategy at Morpace Inc., Farmington Hills, Mich. Eric Roach is research director with the Claros Communities team at Morpace Inc. They can be reached at dmyhrer@morpace.com and eroach@morpace.com.

Brand trustStrong brands are valuable because they create an emotional connection with consumers and often command a price premium. This statement should not come as a surprise to anyone. However there is a recent example that Morpace experienced on how powerful a brand really can be.

Strong brands build trust through their core competency. This makes them more readily extendable, allowing them entry into new products and markets not previously exploited by the brand.

You may have heard that Apple, yes the provider of the iPhone, iWatch, iPad, iPod, iPay and iTunes, is planning to manufacture and sell an electric vehicle by 2020.

We thought it would be interesting to ask the Morpace MyDrivingPower community some questions about this strategy. This panel includes more than 250 consumers around the U.S. who own electric and/or hybrid powertrain vehicles. Given that this panel matches the market that Apple would be targeting with such a vehicle, we thought the results would be representative of the strength of the Apple brand.

Among the more notable highlights of the survey:

  • Thirty-four percent of consumers would be “extremely” or “very” likely to purchase a new Apple car.
  • Sixty-four percent of consumers would be willing to pay between $30,000 and $50,000 for an Apple electric vehicle in 2020; another 22 percent would be willing to pay more than $50,001.
  • The vast majority of consumers expected the design of an Apple electric car to “be better” than other electric vehicles (79 percent).

 

Additional data gleaned from the survey further indicated that there was a high level of trust in the Apple name. Think about it. These consumers have a very positive view of an electric vehicle manufactured by a company that has never been competitive in the automotive market!

Trust is emotional but it is not irrational. Consumers trust Apple because of its sustained excellence in designing devices and offering services which are attractive and intuitively delivered based on the consumer experience. This trust is the reason consumers grant Apple “license” to continue to venture its brand into new markets.

In this case, Apple, no doubt, benefits from Google’s continued development of a driverless vehicle, paving the way for technology companies in the vehicle space.

In the automotive market, the exterior and interior design of the vehicle is extremely important. Apple’s ability to consistently deliver sleek and attractive designs may leave consumers with little doubt about the brand’s ability to deliver an attractive vehicle design.

Furthermore, given that vehicle infotainment systems are more and more important to consumers, Apple’s brand likely offers some intrinsic value to consumers here as well. Many of the systems developed by traditional auto manufacturers remain plagued by perceived usability challenges which hurt them in the eyes of consumers and vehicle buyers. So is it any wonder that consumers are bullish on Apple’s potential in this marketplace?

The lesson here is that no matter what industry you are in, your brand should be nurtured and actively managed. This requires a keen sense of your brand’s core competency and the drivers of brand trust. What can the consumer rely on your brand to do better than anyone else? Qualitative insights, social listening and regular brand equity tracking are key strategies to actively manage your brand to improve its health and profitability.

How can opportunity space be identified to fuel the future growth of the brand? Answering this question requires the ability to anticipate how today’s core competency can be leveraged and extended, in the light of rapidly changing social and technological trends. It requires making business judgments based on quick yet imperfect information, like that collected through a research community.

Consumers can’t answer the business questions that we so often ask them, as if they were the marketers. We must infer them, connecting the dots. Ideation sessions which suspend disbelief about what is possible can produce insights which can help marketers see potential game-changers not identified through other forms of research.

To thrive, brands must grow. You need to make sure that your brand is being viewed favorably by your current target market and potential future targets, even where your brand does not yet play. Because a brand that is not trusted could be a sign of troubling times ahead – think of the many brands that were once iconic to American consumers that have disappeared, or are on their final legs.

 

Posted in Behavioral Research, Brand and Image Research, Business and Product Development, Consumer Psychology, Consumer Research, Market Research Findings | Comment

3 qualities of successful innovation teams

Editor’s note: David Rauch is senior vice president of RTI market Research and Brand Strategy, Norwalk, Conn.

Innovation The quest for creative breakthroughs and deeper insights is evident at every level of business across the globe seemingly every day. Truly innovative insight has become the new Holy Grail of business growth.

The quest too often leaves people feeling frustrated and boxed-in. These mundane realities remind us of a familiar old adage: If every problem is seen as a nail, then every solution will be a hammer! That notion rings true in today’s fever-pitched creative renaissance.

A veritable gold mine of promised insights surrounds us. If only we had the right algorithms, the right out of the box thinking to magically unlock the secrets to the next innovation, the next marketing breakthrough.

Thinking outside of the box seems to be the new mantra for achieving creative innovation. What we are finding is that there is nothing mystical about finding the way to think outside of the box – to see well beyond what is in front of us to innovations that will be successful in the real marketplace. Yes, imagination is a must but imagination alone won’t be enough!

There are three qualities often missing from innovation-tasked teams that, when present, really can pay off:

Team diversity

To significantly elevate the likelihood of surfacing the outside-of-the-box ideas, it is important to move beyond traditional team brainstorming to teams of thinkers from diverse fields of experience and expertise.

The good news is that there is an increasing recognition of the essential truth about problem solving that Albert Einstein recognized more than 75 years ago: “We cannot solve our problems with the same thinking we used when we created them.”

Many business teams and managers are energetically seeking new creative thinking beyond the box in an effort to uncover pathways to new opportunities. A growing number of enterprises and organizations are realizing that having diversity in thinking as well as problem solvers can have a dramatic, positive impact on creative solutions and innovative insights.

Quoting investigative journalist and documentarian Scott Christianson, author of 100 Diagrams That Changed the World, “Most noteworthy of all is … the awareness that everything builds on what came before, that creativity is combinatorial and that the most radical innovations harness the cross-pollination of disciplines.”

As noted by V. Krishna Kumar, a professor of psychology at West Chester University in Pennsylvania, problem solving can be dramatically enhanced by utilizing the “broadcast search” problem-solving approach. This approach makes the problem information available to people from diversified fields. Experience has shown the more removed the problem is from the solver’s area of expertise, the greater the odds that the problem was solved.

Workforces or teams philosophically committed to the inclusion of a broad diversity of thinkers are far more likely to interact and produce innovative solutions. The cross-pollination and the hybridization of ideas are fundamental to successful outcomes. Reach beyond the enterprise to educators, scientists, artists, authors, consumers, entertainers, entrepreneurs, etc.

Independent thinking

Diversity alone is insufficient. To foster innovative ideation, innovation teams must be able to explore solutions in a speak-up culture that encourages rather than inhibits the full creative capability of each team participant or employee.

In order for an idea to be developed and brought to market, key decision makers from across the organization must be receptive of new ideas.

Brain power

In addition to a diversity of independent thought, breakthrough ideation teams need to be powered by the fertile minds of genius-level, polymath thinkers. Not all team members need to be geniuses but breakthrough ideas are considerably more likely when there are high IQ thinkers playing an active role.

Remember, ingenuity matters. Plan to recruit/include at least some genius-level thinkers from diversified fields. As team members, high IQ participants have the imagination to provide vitally needed doses of truly outside the box insight.

Encourage openness and independent thinking. Innovation teams thrive when they are able to tap into their imaginations in a free and unencumbered way. At the same time, teams that are supportive of the ideas of other team members are more prone to have aha insights.

I think it’s probably summed up best by Steve Jobs. He led Apple through a series of innovations that outdistanced IBM, which at the time had a larger research and development (R&D) budget. Jobs had great clarity of understanding of what makes an innovation process successful: “Innovation has nothing to do with how many R&D dollars you have. It’s about the people you have, how you’re led and how much you get it.”

 

Posted in Innovation in Market Research, Research Industry Trends, State of the Research Industry, The Business of Research | Comment

4 steps to a more successful customer segmentation strategy

Editor’s note: Conor Wilcock is research director at B2B International, a business-to-business market research agency, New York.

customer segmentation American firms are lagging behind European peers when it comes to employing customer segmentation within a firm’s marketing strategy, according to a recent survey of large U.S. businesses with average revenues of $6 billion, conducted by B2B International. Just 42 percent of U.S.-based B2B companies use sophisticated segmentation that goes beyond simple firmographics, which is in stark contrast to Germany, where that figure is over 60 percent.

Segmentation is closely linked to value marketing – it enables businesses to better communicate the value of its offerings by prioritizing key target audiences – and should be first on the agenda when it comes to informing marketing strategy. The best B2B customer segmentation research recognizes a client’s requirements because it gets as close as possible to the client. Here are four steps on how to successfully achieve this:

1. Look beyond basic firmographics

Many businesses take a simple approach, looking at groupings according to size, geographical location and so on. There is nothing wrong with this: these firmographic considerations are fundamentally important to a company’s sales strategy. But the needs of customers will cross over so it’s not enough to group them so simply. Furthermore, the chances are that competitors are using the same methods, making it difficult to achieve a competitive advantage.

2. Differentiate by utilizing qualitative market research

Using market research to inform segmentation is critical as it is tough to get to know so many clients in detail. A good analysis starts by speaking to customers in an unstructured manner – via one-on-one interviews or focus groups – in order to reveal preferences. This encourages wide-ranging discussions which allow customers to articulate their current and anticipated future requirements in detail. Focusing on such factors can pay huge long-term dividends in customer loyalty and market share as satisfied customers tend not to look elsewhere.

3. Contemplate behavioral segmentation

While identifying desires is preferred, behavioral differentiation can also be useful in providing insights into what clients want. By deducing behaviors and making simple classifications, companies can use the understanding of client needs as a key foundation to tactical strategy.

4. Execute the strategy

Implementation is arguably the most difficult task. Each grouping must be given a recognizable, individual offering that can be demonstrated as such. It’s important that the sales force is engaged with the segmentation strategy and understands its benefits so that salespeople are equipped to ask the necessary questions to determine which segments customers fall into. If this is achieved, the appropriate solutions can be directed at relevant groups to satisfy needs, and ultimately, maintain customer retention and drive revenue.

The research was based on an online survey conducted by B2B International in the U.S. and Europe with 226 decision-makers and influencers on B2B marketing.

 

Posted in Business-To-Business Research, Focus Groups, International Research, Market Research Best Practices, Market Research Findings, Market Research Techniques, Qualitative Research | 1 Comment

Mobile wallets: A trend retailers can’t ignore

Editor’s note: Kelly Short is director of global communications for San Diego-based Interactions Marketing and the editor in chief of Retail News Insider. The following article first appeared in Retail News Insider in March 2015.

Woman paying with mobile phone, restaurantFor years, experts have been predicting that mobile wallets — the ability to pay with the swipe of your cell phone — will be the next big thing.

But for nearly just as long, mobile wallets remained largely a novelty, or sometimes even a nuisance. Now their time has finally come. Mainstream mobile wallet solutions that consumers want to use — and retailers can actually synchronize with — are finally here. And they’re set to become even more popular than many retailers may be ready for.

The proof? For starters, Interactions’ latest Retail Perceptionstrend report shows that nearly 30 percent of shoppers are already using a mobile wallet and 62 percent of those who don’t say they expect to start using one within the next year. Add to that the fact that all of the major credit card networks in the U.S. participate in at least one mobile wallet solution and it’s clear that this is a trend that can’t be ignored. This article will take a look at what technologies are out there, what they mean for retailers and what the future holds for the industry.

Today’s mobile wallet leaders

Search the Google Play or iTunes app stores and you’ll find a myriad of mobile wallet options. Some only work with credit cards issued by a specific bank, while others work only at certain stores. But with few exceptions, the biggest players today are those mobile solutions that work with multiple banks, forms of payments and/or retailers. Here’s a roundup of some of the most popular choices.

It’s important to note that any discussion of mobile wallets can’t be complete without mentioning Starbucks. While its app only enables payment at its own stores, it has been hugely successful and stands as a testament to the potential success of mobile payment solutions. Today, the app handles an estimated six to seven million transactions per week – nearly 16 percent of Starbucks’ U.S. sales.

PayPal, Google Wallet and proprietary payment apps have been around for several years. So why are they just catching on now? “Apple Pay is what’s triggered that,” says Dave Berry, Chief Information Officer for Daymon Worldwide. “Apple has really set up a global infrastructure capability that resets the notion of mobile payments. Google tends to be on the fringe and comes up with cool ideas but when Apple comes up with it, it tends to have more stickiness and be more serious across the globe.”

To Berry’s point, Apple has significantly heightened retailers’ awareness of newer mobile payment solutions that can be more easily integrated into existing point-of-sale (POS) systems using third party hardware and software – a significant change from many of the earlier payment solutions that came to market.

Along with the growing awareness and ease of integration on the retailer side come consumers’ growing expectations. A seamless experience in a retailer’s store, on its Web site and through its mobile app is increasingly becoming a must-have, not just a nice-to-have. Mobile payment systems can help further the omnichannel experience for consumers. The systems may also provide an extra layer of security for consumers as compared to a traditional credit card swipe. Many solutions require users to enter a PIN, password or fingerprint before making a charge – and allow users to suspend or cancel their mobile wallets instantaneously if their phone is lost.

Some believe the next big break for widespread mobile wallet adoption may be just on the horizon. CurrentC, a mobile payment solution backed by a consortium of retailer power players including Wal-Mart, Target, CVS, Rite Aid and Best Buy, has been under development since 2012 and is scheduled to launch nationwide later this year. To date, the merchants involved in its development have refused to accept other mobile wallet solutions, significantly limiting their reach.

What remains to be seen, however, is the willingness of shoppers to sign on to CurrentC, which plans to bypass credit card processing fees by tying directly to consumers’ bank accounts. This could potentially mean big savings for retailers. But as Chris Doherty, consumer loyalty expert and vice president of Galileo Branding, notes, “Linking your credit card, which has a higher level of protection, to your mobile payment account is different than linking your bank account. [Retailers will] have to do something to incentivize customers to use it … for low-margin retailers like grocery stores, that may mean giving most or all of those transaction savings back to the customer.”

While on the surface this may seem like a reason not to adopt a mobile payment strategy at all, Doherty notes there is still a significant benefit to be had. Even if a retailer isn’t adding the transaction savings to their profit, they’re still growing consumer loyalty – a tried-and-true solution for increasing repeat sales.

“Mobile payments also have the potential to increase productivity,” adds Berry. “Standing in line, swiping your credit card, signing the receipt – that all takes time and ultimately slows down sales. The speed of mobile payments has the potential to improve foot traffic, throughput and sales. And the net of that is increased revenue generation.”

For retailers looking to join the mobile payment revolution, most experts agree it all comes down to knowing your audience. Will they use a mobile wallet tied to their credit card? What about their checking account? Is there an existing mobile payment system they already use and like that could work for you too? As with so many of the changes affecting the industry today, retailers must remember that consumers are now the ones calling the shots. Gathering insights to deliver a solution that clearly takes consumers’ needs and preferences into account is the only way to truly succeed.

 

Posted in Behavioral Research, Brand and Image Research, Business and Product Development, Consumer Research, Customer Satisfaction, Retailing, Shopper Insights | 1 Comment

The IoT revolution: too much data and not enough insight

Editor’s note: Terry Lawlor is EVP product manager at market research software firm Confirmit, London.

IoTThe Internet of Things (IoT) – the network of physical objects that contain embedded technology to communicate, sense or interact with their internal states or the external environment – has quickly become a hot topic for 21st century business.

Gartner recently estimated that 4.9 billion connected “things” would be in use by the end of 2015, expanding to 25 billion in 2020, with each device capable of providing potentially invaluable customer insight that could be vital to commercial survival.

But how do you know if your business is prepared for the booming IoT revolution?

Businesses today must prepare themselves for the barrage of data coming from the IoT by embracing next-generation customer experience and market research best practices. This means taking a more sophisticated and automated approach to listening to these “things” to better understand your customers, using a smart hub that intelligently brings the data together. As the contextual data that Internet-connected devices can capture increases, it also becomes easier for the new generation of digitally-savvy consumers to openly share feedback and opinions. Best practices need to incorporate social and text analytics – alongside traditional methods – in order to simplify and streamline the entire customer experience management process.

Take Apple’s entry into the wearable tech market with the Apple Watch. Consumers will have a device that automatically captures context such as location and health data, while enabling instant payments and allowing for easy social interactions.
As a result, companies need to analyze all kinds of data: unstructured and structured, solicited and unsolicited. And they need to do this across multiple platforms, channels, countries and languages to help them identify and track issues that could make or break them. Sifting through this massive volume of diverse data has become a hugely complex and labor-intensive task that is virtually impossible to achieve manually. By the time any insights are uncovered it is often too late to make any impact on the business.

As Sony Mobile has found, the automation of the process for listening to its customers across thousands of social media channels has transformed its ability to identify, analyze and act upon feedback and trends in hours, instead of days.

Text analytics + IoT
A February 2014 report, How To Use Text Analytics In Your VOC Program by Jonathan Browne, senior consultant at Forrester Research, Inc., found that text analytics help organizations provide more intelligent service recovery, drives continuous improvements in operations and supercharges executive decision-making.

This indication of the need to help companies mine the large volumes of data resulting from the IoT has been a significant factor behind new text analytics technology development.

Mining both solicited and unsolicited free-form content, organizing feedback according to the categories important to the business and analyzing complex and sometimes conflicting sentiments held within each piece of content are important capabilities for companies. To future-proof your business, you must be prepared to address these challenges by meeting the need for categorization and sentiment analysis for free-form text, verbatim and other unstructured survey data. This also means capturing social media feeds, online media feeds, forum comments and blogs, and enabling your business to capture, analyze and respond to customer and market feedback across multiple channels and sources in real time.
With the likely explosion of new connected devices, and with continuing rapid innovation in social networking, consumers have an amazing array of choices for providing feedback on an organization’s brand, products and services. They are voicing their views on new channels so it is vital that social and text analytics are incorporated into customer experience best practices to complement the insight that traditional, structured data delivers.

Organizations cannot ignore the changing landscape of customer interactions and the need to intelligently manage, map and mine them if they are going to correct the imbalance between too much data and not enough insight.

 

Posted in Behavioral Research, Big Data, Business and Product Development, Consumer Research, Data Processing | Comment

Keeping our furry friends healthy: 5 trends changing the veterinarian industry

Editor’s note: Melanie Papandrea is assistant marketing director at research and data collection firm qSample, Chicago. This is an edited version of a post that originally appeared here under the title, “5 veterinarian and pet health trends taking over.”

What does the future hold? For the veterinarian industry, the answer is Marmaduke strides in pet health care. Everyone wants to be able to keep their furry friends healthy, and with the new trends of the future it is becoming easier and more manageable.

With that in mind, here are five trends that are creating a vast impact in the veterinarian industry:

Holistic medicine

The American Holistic Veterinary Medical Association defines holistic medicine as “treatment that is minimally invasive.” This means the techniques and products used to treat the animal cause less physical stress and typically produce fewer side effects than with traditional drugs.

According to the National Center for Health Statistics, almost 40 percent of Americans in 2007 utilized holistic medicine (also referred to as integrative/complementary/alternative medicine).

Holistic medicine’s popularity has sprung from the fact that many pet owners have personal experience with alternative medicine (herbology, acupuncture, massage therapy, chiropractic, etc.). In turn, they are searching for less invasive ways to treat their pets. Holistic medicine is traditionally a natural, non-intrusive and often affordable alternative that focuses on preventative treatments – as well as the emotional wellbeing of the patient. For more information on the topic, visit our article, “Is holistic medicine for pet care the next big trend?

Pet insurance

Treatment for pets isn’t cheap, and pet owners don’t mind putting down the money. According to a recent survey by Kroger Co., 61 percent of pet owners say they’d spend between $100 and $1,000 for life saving medical treatment. Another 15 percent would be willing to pay between $1,000 and $3,000 for treatment. Ten percent of owners said they would be willing to pay $3,000 or more for medical care if their pet required it.

Beyond the heroic sentiment, animal health insurance has become increasingly popular in a world of unexpected veterinarian costs and tightening budgets. Several years ago, few companies offered animal health insurance. Now the market is booming. Our internal research found that 97 percent of pet owners surveyed had personal health insurance, and 60 percent of those employed animal health insurance for their pets. Pets Best and Petplan were the most popular choices.

Female veterinarians

Women have come a long way from what once a male-dominated field. The Houston Chronicle reported: “As of 2010, the veterinary profession was about 50 percent men and 50 percent women, according to the American Veterinary Medical Association.”

Fast forward two years, the percentage of female veterinarian students grew immensely in 2012. Dvm360 noticed this trend when more than 75 percent of graduates were women, with Tufts University leading the pack with almost 88 percent of its graduating class represented by female students. The current enrollment in veterinarian medical colleges is approximately 80 percent female.

Move over boys, the girls are taking over.

Mobile technology

Today, almost everyone has a smartphone and access to mobile apps, and this is spreading into the animal kingdom.

Mobile technology has facilitated the communication between pet owners and veterinarians. Through numerous mobile apps and automated SMS messages, facilities can transmit patient test results, appointment reminders and notifications pertaining to new services and/or medications. Clinic techs are even able to perform an X-ray on pets and send it to the veterinarian for a review within just a few minutes.

Other apps that assist pet owners are real-time Webcams to ensure the safety of animals (and slippers, too!), pet training programs and (yes) social media platforms exclusively for pets.

Exotic pets

There are no sightings of a Baby Groot as of yet but owning exotic pets is certainly a trend. For example, in the U.K. alone:

“The number of monkeys and other primates being kept as pets has soared to an estimated 9,000 animals in England and Wales as rising interest in exotic creatures fuels demand while the Internet makes them easier to trade.”

According to the American Pet Products Association, cats and dogs were still king in the pet world in 2013 but already 19.4 million U.S. households owned exotic animals. The term “exotic” is loosely defined but it commonly refers to reptiles, amphibians, birds and small mammals. The reasons for owning exotic animals go beyond just being provocative and unusual; they can include being suitable for people with allergies (as with reptiles) or that they require less space than dogs or cats (as with hamsters).

In other words, it’s not just hipster monkey business.

We are still waiting for that flying car and commercial trip to the moon. Yet it’s wonderful to know we are close to a future where a large percentage and variety of animals are treated well and with the best possible care. With the continued support of a maturing and hard-working veterinarian profession, all dogs might possibly be in heaven while on earth.

 

Posted in Consumer Research, Health Care Research, Market Research Findings, Research Industry Trends | Comment