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21st century market research.pdf


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21st century market research.pdf

  1. 1. :
  2. 2. written by Manila Austin, Ph.D., Director of ResearchJulie Wittes Schlack, Senior Vice President, Innovation & Design
  3. 3. executivesummaryAdvances in social media, the empowerment of everyday consumers, The choice facing the industry need not be to invest blind faith inand the need for more actionable insights fuel a mandate for market old, authoritarian research techniques or in uppity, untested newresearch to do more, faster. These developments create great ones. This paper sets out to collaboratively build a foundationopportunity for researchers to exercise strategic leadership, to for a 21st Century understanding of market research—what it caninspire and innovate by bringing the voice of the customer to life, accomplish and how. We seek to pose some provocative questions,to apply new insights to complex business problems, and to offer some initial thinking, and engage the industry as a wholeproduce creative, timely and actionable recommendations to in an ongoing conversation about how to embrace the blurreddrive business results. boundaries between marketing and market research, and activateBut the use of social media-driven research also fuels the quality the ability to quickly garner and act on customer insight.debate that’s been raging for years, creating worries about declining A New Model for a New Ageresponse rates, questionable respondents, sample size, andprojectability. Market researchers need to consider and address The emergence of social media challenges us to recognize andthese legitimate concerns, while also recognizing the ways in which figure out how to intelligently embrace a new way of doing research—online, social, community-based research can actually strengthen one that is sure to generate insight, to both inspire and inform,validity and enhance quality. and to provide strategic value. We see an integrative paradigm emerging—a 21st Century model—in which research is:To take that leap, it’s helpful to think in terms of tradeoffs, tounderstand what researchers are risking—and gaining—by • Conducted in real time, so that it’s relevant and actionableshifting their focus and methods. • articipatory and engaging, which means adopting P humanistic and consumer-centric methodsTRADE BECAUSE • extured and nuanced, with the potential of getting T Purity for Pragmatism Pragmatic = Actionable rich detail on a really large scale • ontinually evolving to meet new marketplace C General for Specific Specific = Relevant demands from consumers, clients, and competition • ore dynamic, where we will rethink and re-invent to M Artificial for Natural Natural = Authentic drive innovation on an ongoing basis Anonymity for Transparency Transparency = Engagement Taken together, these criteria feel pretty different from the somewhat dry language many of us grew up with. The online era Distance for Relationship Relationship = Candor challenges many of our assumptions about data quality—validity, projectability, bias—and it represents a significant change in how Randomness for Purpose Purpose = Productivity we think and go about our work. As an industry—and to varying degrees as individuals—we are being nudged, or shoved, out of Control for Collaboration Collaboration = Creativity our comfort zone. Looking Backward Looking Forward = The Future for Looking Forward Leaving Our Comfort Zone: 21st Century Market Research | 3
  4. 4. The New Roads toQuality RequireChallenging OldAssumptions AndMaking InformedTrade-offs. Quality is an urgent issue but there’s a more important issue to do with what needs to be done going forward, because the industry isn’t keeping pace with the change going on around us. People are too focused on quality, people are too focused on probability and non-probability samples, people are too focused on respondent engagement—this is all about making minor changes to what we are doing right now. Those are all necessary, but they’re not sufficient conditions for the success of the function. “(COCA-COLA’S) STAN STHANUNATHAN ON WHY QUALITY DOESN’T MATTER,” RESEARCH., 22 OCTOBER 2009 Leaving Our Comfort Zone: 21st Century Market Research | 4
  5. 5. Pragmatic =ActionableIt is time to decouple the notion of “quality” from purity. Today, it is Top-down, researcher-centric approaches are best for generatingmore important for research to be actionable than irrefutable. This feedback, for confirming what is already known or suspected. Bymeans shifting our focus—aiming not for the perfect, bias-free study, design, they do not expand a problem space nor do they generatebut for an approach that pragmatically applies a range of methods to knowledge outside of the researcher’s frame of reference. They alsogenerate and test hypotheses. Integrating elements of both humanistic run the risk of alienating the very people—everyday consumers—toand experimental approaches allows us to produce timely, “good whom companies desperately need to listen. Are there circumstancesenough” research targeted to specific business needs. Rather than under which you want and need to hear from the population ofitemizing the statistical significance of individual data points, we less-engaged, more neutral customers? Of course, but they areneed to focus on synthesizing findings that are relevant, insightful, not and should not be the only game in town.and actionable. We believe that there clearly is a place for both kinds of knowledge— exploratory and confirmatory. But while researcher-centric approaches are necessary for some purposes, numbers don’t tell Integrating consumer- researcher-centric approaches the whole story, or even close to it. By grounding knowledge generation in the humanistic tradition, we ensure that we are focusing on the consumers’ world view and framework, not just Consumer- researchER- the brands’. And combining elements of both traditions in an centric Design centric Design iterative, agile, and pragmatic way allows researchers to move Discovery Feedback between exploring and testing, generating and confirming Exploring Focusing Hypothesis generation Hypothesis testing to produce the most actionable information in support of specific business needs. Delivers: Delivers: Insight and Meaning Confirmation and NumbersWe have learned that a longitudinal, iterative approach—one thatcombines humanistic, person-centered approaches with moretraditional, experimentally derived ones—is most effective.Humanistic methods (such as ethnographic-type activities that treatparticipants as active co-investigators, as opposed to simply passivesurvey respondents) are consumer-centric, reflecting how real peoplewant to engage with researchers. They are discovery-oriented andexploratory, most suitable for uncovering connections, insights, andnuances that lead to innovation and competitive advantage. Anditerative, as opposed to episodic research, supports researchers andparticipants in an ongoing discovery process that allows everyone toask new questions as they uncover and reflect upon what they learn. My call to action is that we would figure out the way to return to the consumer’s backyard…We have to rebuild that trust and we have to gain much better insights than we are today…We need to listen to them on their time, their turf, and in the ways they want to communicate to us, not in ways that we choose to communicate with them. And we need to re-establish the trust and the confidence that they deserve to have in us… Kim Dedeker, ARF Leadership Forum 2008 Leaving Our Comfort Zone: 21st Century Market Research | 6
  6. 6. SPECIFIC =RELEVANT Market researchers have been concerned with the quality of online data collection since the dawn of the Internet, largely due to fears that online consumers fail to accurately represent the general population. These concerns, however, are becoming increasingly irrelevant for two main reasons. First, more people are accessing the Internet, making distinctions between online and offline groups less meaningful. Second, if relevancy of insight is an important quality factor (which we believe it is), then researchers have more to gain by listening to the “right” group of people than they do by trying to generalize findings to a generic population. There is plenty of evidence showing that, except for a few discrete segments, the Internet population in the U.S. is quickly becoming the general population. Many European countries’ Internet penetration is higher than what we have in the U.S., and projections for developing markets (with the advent of smartphones) indicate that soon, two billion people will be online.1 Online versus offline is quickly becoming a non-issue. More importantly, quality research must produce relevant findings; and we have learned that listening to targeted, specific groups of customers is the surest road to relevancy. If you want to deepen customer loyalty, who better to engage than members of your brand’s loyalty program? If your goal is to broaden your brand’s appeal, then hearing from fans of your competitors’ brands may be the most useful approach. Researchers can be more confident in taking action when they trust they have the right people assembled to address their specific objectives. We advise our clients that whether or not they generalize from communities depends on the community composition and on the particular question they’re trying to answer. Many questions—like the ones featured in the United Airlines example shown here—can be explored and findings effectively generalized when the community is specific and the target market is defined enough.On REPRESENTATIVE SAMPLESWe recruited a community of our most valuablecustomers—a relatively small population—from our customer list. Because the communityaccurately reflects my population of interest,and because the purpose of the community is tounderstand our most loyal customers, I believethe results of my community’s research arereflective of the larger target population. So eventhough it’s not a traditional panel, I’m comfortableusing the community more quantitatively.Dan Comenduley, Project Manager, Customer Metrics Insights,United Airlines 1. Leaving Our Comfort Zone: 21st Century Market Research | 8
  7. 7. NATURAL =authenticPerhaps one of the most overlooked ways to enhance quality is Trading artificial approaches for more naturalistic (private, online,leveraging the power of a naturalistic research setting. Natural at-home) research settings can strengthen validity and data quality,settings promote authentic participation because the researcher especially when researchers are asking people to reveal intimateengages people on their own terms, refraining from barging into aspects of their lives.people’s lives or extracting them from their homes to answer We have found that the freedom and relative safety of privatequestions they had no say in generating. One benefit of online online communities allow for the iterative exploration of theresearch—and private communities in particular—is that it allows most intimate content. We have seen that in naturalistic settings,people to participate on their own time, on their own terms, and regular people openly share detailed information about theirfrom their own homes or smartphones. They are able to use social financial situations, experiences with serious illnesses, stressestechnologies to bring their own lives to the researcher. and hopes, relationship worries, and even embarrassing quirks and habits. Another benefit of naturalistic settings is that they not only provide more authentic contexts for engagement and discovery, but they strengthen researchers’ ability to generalize findings. Participating in focus groups and anonymous surveys requires people to step out of their daily lives; thus findings generated from these approaches do not always translate to real-life situations. And with so much public distrust in how companies use electronic information (e.g., identity theft, subversive marketing, etc.), people are less likely to be truly open and forthcoming if they don’t know or cannot trust the researcher. But a willingness on the part of researchers to model the kind of self-disclosure that we hope to elicit from our participants, coupled with the kind of ongoing connection enabled by social media, make it possible to build a trusting relationship between researcher and “subjects” over time.On intimacyWe formed a community of newly diagnosed cancerpatients and primary caregivers who participatedno matter where they lived, whatever hour of theday and regardless of their condition. In contrastto typical market research, the richest ‘aha’s’ camewhen the patients and caregivers initiated theirown discussions, and we had the opportunity toreally just listen—observing how the memberssupported each other and learning from thestories they shared. We were a fly on the wallin the treatment room, which for healthcaremarketers is very unusual.Alana Brody, Former SVP Strategic Development,National Comprehensive Cancer Network (NCCN) Leaving Our Comfort Zone: 21st Century Market Research | 10
  8. 8. transparency =ENGagement One way to get quality information is to trade anonymity for a transparent, open approach. Researchers are often concerned that findings will not be valid if participants speak freely with one another, know who the sponsoring company is, or are active co-participants in the research process. Our experience and our five-year program of research-on-research suggest this is actually not true. We have found that when companies trade in anonymity, they gain better engagement, more textured insights, and increased value overall. First, transparency in research is just simply more engaging for people. When companies are upfront in disclosing their identity, when they invite people into the fold, and when they demonstrate that they are truly listening, people respond in kind. The research we have done on community member participation clearly shows that branded communities outperform unbranded ones.2 And our research on corporate listening shows that community members value feeling that their voice is heard and that their contributions are making a difference.3 Engagement is critical for quality; when people are engaged they try harder, they do and share more, and go to great lengths for companies when they know who they are talking to. Second, companies undermine the ROI of research when they fail to be transparent. Participation is lower, researchers must concoct and field “dummy” research to disguise their identity (which waters down the learning agenda and wastes time), and members’ energy is often diverted into guessing games that are not valuable for the client. And last, many of our clients have conducted parallel studies comparing results from communities with those generated from blinded approaches (e.g., panel surveys, focus groups, etc.) We have collected over 25 examples across a range of clients, and the comparison results are consistent: findings from data collected through a transparent, community approach are directionally similar to those obtained by other methods.On AnonymityWe found that in an unbranded community we werecontinually challenged with talking directly toour members without revealing our identity, andthus being forced to find ‘creative’ ways to askquestions and conduct ‘decoy’ research. Ourreal objective was to have a direct dialoguewith our consumers and gain valuable insightsinto their needs as shoppers. When we did moveforward and unveil our identity, becoming abranded community, we found member engagementincreased and conversations become much more 2. Katrina Lerman and Manila Austin, The Fifth ‘P’ of Marketing: relevant and valuable to both parties. Participation (Communispace whitepaper, 2007)Michelle Laslo, Senior Manager,Customer Strategy and Insights, PepsiCo 3. atrina Lerman and Manila Austin, What Companies Gain K from Listening (Communispace whitepaper, 2006) Leaving Our Comfort Zone: 21st Century Market Research | 12
  9. 9. relationship =candorIt may seem counter-intuitive, but quality can be heightenedwhen researchers trade distance and objectivity for closeness andrelationship. A common fear market researchers share is thepossibility that the feedback from people participating in brandedresearch communities will be tainted, inflated or somehow nottrustworthy as a result of their ongoing involvement.Our research shows that, if anything, members become more honestand forthright as their tenure increases. Over time, members do cometo view company sponsors more positively, but this does not affect theirability to provide valuable—and critical—feedback.For example, we have developed a method for coding open-endedresponses for both “candor” and “richness” and have found thatmembers continue to provide critiques and textured detail intheir contributions, regardless of tenure.We have also found that the relationship that develops betweencompany sponsors and community members can actually increaseclients’ confidence and trust in what they hear. Because communities aretransparent, composed of the “right people” for the business objective,and because companies really know who they are hearing from, clientsfeel more comfortable acting on the advice of the research community. On candor In a past job at a major food company, we had members react to a new product concept early in development. Internally, we really loved the concept we were fielding, and had high hopes for it. Members responded quickly to the concept test—within 72 hours—and they hated it, totally rejecting the idea. But it wasn’t just a gut response. Because they felt they knew us, were invested in us, and didn’t want to see us screw up, they also provided us with ample, very clear feedback on why. Our loyal users saw a fatal flaw in the product that we had missed in our own excitement. Based on their responses, we pulled the product idea within three weeks, saving the company costs on further development. In this case our community helped us fail faster, and allowed us to feel good about the decision because we knew we could trust that critical feedback. Adrian C. Bing-Zaremba, Consumer Insights and Market Intelligence, Boehringer Ingelheim Consumer Health Care Products Leaving Our Comfort Zone: 21st Century Market Research | 14
  10. 10. purpose =productivityConcern about professional respondents has been acute in recent We also need to re-evaluate our fear of the dreaded practiceyears, but it is time to realize that quality requires trading in the effect—the idea that repeated participation in research necessarilymyth of the “fresh,” unpracticed consumer, and focus instead on creating erodes quality. Recent research and our experience suggest justpurposeful relationships with people to help them do a better job of what the opposite.they are already doing anyway. The notion that there is a “random” There is mounting evidence that practiced research participants—population of people in the world that do not take surveys, answer people who are motivated and engaged, and well-versed in how tomarketers’ questions, post and read reviews, or engage with brands on best contribute—actually produce better results. A study releaseda regular basis is wishful thinking in the 21st Century. Consumers today by the ARF’s Online Research Quality Council actually foundare extremely marketing savvy; and if there are untapped consumers out that increasing panel membership lowered “bad” survey takingthere, then they certainly aren’t representative of the general population. behavior (such as straight-lining or speeding).4 “Professional” respondents, then, do not necessarily threaten—and may actually improve—quality. This sounds counter-intuitive, but we have also found that experience participating in research—especially when the purpose is transparent—produces better results. Members are motivated, proficient, and simply more productive. This is certainly the case with new product development communities, but it is also true for insight communities. Our participation research also shows no relationship between greater monetary incentives and increased participation.5 Intrinsic motivation drives engagement. There is something inherently energizing about a shared purpose and goal-directed activity; when research participants know why they are being asked to make electronic collages, take videos of a family dinner, or brainstorm ideas, they are motivated to do a better job.On practiceI like problem solving, and this community is aboutproblem solving, in terms of identifying what peopleneed, what they want to see done differently, andhow you can meet their expectations.After a few months, I guess the [incentive] becametiresome and the conversation kind of addictive. 4. obert Walker, Raymond Pettit and Joel Rubinson, Foundations RI like many of the topics and hearing guys’ thoughts of Quality Knowledge Brief (The Advertising Researchon them, as well as having the opportunity to give Foundation, 2009)my own perspective.Members of two Communispace Communities 5. atrina Lerman and Manila Austin, The Fifth ‘P’ of Marketing: K Participation (Communispace whitepaper, 2007) Leaving Our Comfort Zone: 21st Century Market Research | 16
  11. 11. collaboration =creativityMarketers must also consider trading sterility and one-to-one tactics fordynamic collaboration based on many-to-many interactions. To reapthe benefits of collaborative creation, however, researchers need to getcomfortable with—and figure out how to leverage—the group dynamicsthat naturally arise when people get together for any purpose. Thelikelihood that research participants will influence one anotherthroughout the research process is an understandable concern;because interaction is encouraged and happens transparently in onlinecommunities, we worry that members are subject to “group think.”But the days of isolated, pristine research are over. In this era of tweetingand lifestreaming and rating and review sites and human billboards,everyone is subject to influence from their peers. Rather than attemptingto isolate people or control their interaction (or worse, constraining thenaturalistic community setting by virtually hiding responses or forcinganonymity), we need to ask ourselves how to observe influence behaviorand learn from it.The alli® example demonstrates the creative potential in building ongroup processes for breakthrough solutions. On Influence When GSK Consumer Healthcare introduced alli, we did so knowing that this was a product that could elicit some intense emotional responses. Our private communities gave us a chance to pose questions of users and non-users alike, but more importantly, to see what questions alli non-users posed of users, and of how passionate alli consumers answered them, described their own experiences, and made their own recommendations. I’d like to think that we were visionary market researchers doing cutting- edge work, but honestly, I think we were just being realistic about the fact that consumers have unprecedented opportunity to influence one another online. So our goal wasn’t to pre-empt ‘group think’ so much as to understand it, to see the peer-to-peer influence process in action and learn from it. Andrea Harkins, Manager, Integrated Insights, GlaxoSmithKline consumer healthcare Leaving Our Comfort Zone: 21st Century Market Research | 18
  12. 12. looking forward =the future The industry’s historical focus on producing irrefutable, nationally representative data points is meaningful only if we limit the role of market research to testing and confirmation. But if market research is to win a permanent seat at the executive table, if it is to be integral to brand strategy, then it has got to be about creation, not just prediction. It is time to trade a backward-looking and confirmatory stance for a forward-looking and generative approach. It is no longer clear in today’s long-tailed, filtered, personalized world that it is actually, scientifically possible to accurately predict behavior. But what we can do is co-create with our consumers, rapidly, ideally one step ahead of them, but at least with them. Markets are becoming more diverse and will continue to change rapidly. So generating insights and engaging in co-creation upstream in the development process and doing it in an agile way (with short time frames and a focus on niche markets as they emerge)—these are the ways market researchers will keep pace with customers and “go where they go.” And those market researchers who can “do” upstream creation as well as prediction will play strategic roles in driving business.On Co-CreationScholastic Book Clubs recently won a ForresterResearch Groundswell award for our work witha customer community comprised of parents andteachers. Our goal was to redesign the Book Clubflyer in an effort to improve the way parents, kids,and teachers find and buy the right book for theright child. By zooming out and exploring not justhow teachers evaluate books, but how parentsevaluate their kids’ readiness and interest inreading, this group helped us effectively redesignour iconic flyer. This fruitful co-creation couldn’thave happened if we had simply solicited feedbackon flyer designs from one group or the other inisolation. The transparency and opportunityfor mutual influence, along with active, visiblefacilitation is what made this process so productive.Judy Newman, President of Scholastic Book Clubs Leaving Our Comfort Zone: 21st Century Market Research | 20
  13. 13. trading offcan meantrading up. The industry has moved away from just being seen as a quasi-scientific activity, providing hard quantitative measurement that is detached from the creative process and the complexities of intuitive decision-making. Today, it is seen as also embracing a much more pragmatic approach that requires high levels of creativity and imagination in order to tease out key insights. DVL Smith, University of Hertfordshire, U.K.It’s about understanding the human condition. We’retoo focused on understanding consumption behaviorand shopping behavior. We need to understand thehuman condition, which you’ll only know by observing,listening, synthesizing and deducing.“(COCA-COLA’S) STAN STHANUNATHAN ON WHY QUALITY DOESN’T MATTER,”RESEARCH., 22 OCTOBER 2009 Leaving Our Comfort Zone: 21st Century Market Research | 21
  14. 14. summary The kinds of results we have observed over the years are specific to communities as we do them at Communispace, where insights are generated in the context of continuous, longitudinal, intimate, purpose-driven groups, and where community members forge real relationships with one another and with our clients over time. But beyond our own experience, we generally believe that an online, iterative, consumer-centric approach mitigates some of the risks and challenges of conventional market research, can actually enhance quality, and uncovers relevant insights quickly in a way that is fun and authentic for real people. By leveraging emerging technologies that foster connection, researchers can avoid the pitfalls of barging into peoples’ lives and instead meet them where they are. As a result, research efforts are likely to yield more spontaneous and revealing insights. And as an added advantage, there are also efficiencies and cost-savings researchers can achieve by capturing a high volume of rich, open-ended data at a relatively low cost. 21st century method Potential Gain Engaged, motivated participants who Human, transparent approaches generate higher quality data Consumer-centric settings (leveraging online, “Naturalistic” settings that feel safe, maximize mobile, and other technologies) comfort, and encourage intimacy Collecting an unprecedentedly large number Large scale “qualitative” of open-ended data at a relatively low cost Research findings that are relevant, timely, Fast, targeted inquiries and actionable Deep knowledge of participants as real people, Building relationships that leading to greater insight and increased endure over time confidence (you can trust that you really know the people participating) By using humanistic, transparent approaches—in essence, by encouraging consumers to become engaged in the form as well as the substance of the research—we get really engaged, motivated participants. By involving customers as actors, not just as subjects; by bringing their voices into every organizational function, market researchers will enable consumer-led growth. They’ll ensure that their companies generate solutions that are relevant to customers—in design, function, packaging, and messaging—and in so doing, drive growth and innovation. Leaving Our Comfort Zone: 21st Century Market Research | 22