Oct
0

Article Synopsis: How to Link Customer Loyalty to Profits

Quirks July 2014
How to Link Customer Loyalty to Profits
By Michaela Mora

“Can’t get no (customer loyalty insights) satisfaction?”  Don’t just listen to the Rolling Stones; take the advice of Michaela Mora. In this article she discusses how two key elements in customer research, customer satisfaction and likelihood to recommend, must be analyzed along with data on customers’ actions in order to link these two elements to loyalty.  All too often, Mora observes, clients look for indicators that directly contribute to company profits, therefore rushing to conclusions.

The author cautions that customer satisfaction does not lead directly to motivation to purchase. Often, “…first-time purchases are filled with expectations and the product’s ability to meet them will have an impact on satisfaction but not always on repeat purchases.”  Additionally, dissatisfied customers may continue to still buy a product for a variety of reasons, including contractual obligations (subscriptions); lack of available alternatives; lack of drive to research other products; or price. Alternatively, satisfied customers may discontinue purchasing products for a variety of factors.  Thus, we know that satisfaction is not the only predictor of future purchasing.

Another hot topic in customer research is NPS (Net Promoter Score), based on self-reported likelihood to recommend as a measure of loyalty. However, as the author points out, respondents may give high recommendation scores at the same time they give low satisfaction scores, as satisfaction and recommendations are often driven by different factors. And haven’t we all seen cases where we may be satisfied with a product but not willing to recommend it—perhaps because it is from a category that is too personal, or because we don’t want to share an “inside” tip? As Mora says, NPS scores alone may be an oversimplification in some cases.

Further, Mora points out that it is easy to make erroneous connections between customer satisfaction, customer loyalty, and profitability: “To make loyalty an actionable concept and link it to profits, companies should take into account the value contributed by customers… Repeat customers driven by deals and discounts are unlikely to be profitable and are far from being loyal.”

 

This synopsis was written by Lynn Croft, independent marketing and market research consultant. With 15 years of experience at companies such as Genzyme, Bayer Corporation, Shire, and Eli Lilly, Lynn has expertise in market research, market analysis regarding product launches, pricing and lifecycle management. 

 

Aug
0

Article Synopsis: Listening In on Social Media: A Joint Model of Sentiment and Venue Format Choice

By David A. Schweidel and Wendy W. Moe

Journal of Marketing Research

Published online June 19, 2014

Does brand sentiment vary by social media platform? According to research by David Scweidel and Wendy Moe, the answer appears to be yes. The authors discuss the results of their 2014 study, in which they modeled previous data collected from different social media venues (blogs, Facebook, Twitter, etc.), in an effort to determine if consumer brand sentiment varies by venue type.

In this article, Scwheidel and Moe uncover the risks of using social media metrics without accounting for differences across venues. Previous studies had already suggested that what people say in a post is related to where they post. In this study, the authors set out to examine this further and to find out why blogs have the most positive posts, forums the second most positive posts, and microblogs the least. The result? The article points to two factors: 1) Consumers often choose to participate in online communities whose member share their interests and opinions; and 2) The limitation on numbers of characters allowed has impact on the opinion expressed. Forums and blogs, (Facebook) because they are lengthier, allow for more expression. Additionally these sites actually expose posters to more varying amounts of social dynamics, including peer pressure, etc. On micro blogs, (Twitter) where text is limited, consumers tend to post more extreme opinions so that they can convey their perspective succinctly.

The results from the authors’ modeling shows that the inferences marketing researchers obtain from monitoring social media are dependent on where they “listen.” For example, Facebook tends to be more positive, and Twitter more negative in the opinions expressed, based on the dynamics stated in the above paragraph. Common approaches that either focus on a single social media venue or ignore differences across venues in aggregated data, can lead to misleading brand sentiment metrics. The authors conclude “… the current research demonstrates the potential for social media monitoring to supplement “market” research programs, but further investigation using both social media and survey data from a range of categories is essential before market researchers can rely exclusively on social media for customer insights.”

1Muniz, Albert M., Jr., and Thomas C. O’Guinn (2001), “Brand Community,” Journal of Consumer Research, 27 (4), 412–32.

 

This synopsis was written by Lynn Croft, independent marketing and market research consultant. With 15 years of experience at companies such as Genzyme, Bayer Corporation, Shire, and Eli Lilly, Lynn has expertise in market research, market analysis regarding product launches, pricing and lifecycle management. 

 

[Want to learn more about social media monitoring, social sample sources, and more? Get a practical perspective on how you can use social media in your market research projects in our 90-minute, live, online Social Media Meets Market Research class. MRA approved for 1.5 hours of PRC credit.]

 

Jul
0

Article Synopsis: Still Full of Beanz (Effective Data Management)

How does a 150-year-old company stay relevant?

Originally published in Research Magazine July 9, 2014

By Lucy Fisher

Writer Lucy Fisher asks Colin Haddley, director of strategy, insight and capability at Heinz, “How does Heinz, a 150 year old company, stay relevant with consumers in a competitive market?”, the answer is research.  Innovation doesn’t just happen, “Generating great ideas is essential in marketing, but to generate these ideas you need to be disciplined in your approach,” Haddley points out. Managing market research data efficiently is the key.

Using a philosophy of test and learn, Heinz looks to multiple information sources for research, including electronic-point-of-sale, Nielsen data, panel data, and social media and brand monitoring.  One such panel, Heinz 57, is an online community of 300 consumers that the company uses as a source of customer feedback.

How then does Heinz manage all this data and turn it into successful marketing strategies? With customer insight teams of marketers trained in innovative thinking.  However, a big challenge is integrating the sources of data, and not focusing on any one source of insight. “Penetrating, meaningful insights are derived, felt and observed through a variety of sources of information. It is like building a jigsaw… it all starts with effective data management,” Haddley says.

By piecing all the research together, from the different sources, relevant pieces of customer insight emerge: what consumers like, do not like, want more of, or think is a flaw. “But it all starts with effective data management,” Haddley cautions. While the article didn’t specifically address how different types of market research data are integrated (perhaps that’s a recipe too dear to share), it’s still a great real-world glimpse into the value of leveraging multiple information sources.

This synopsis was written by Lynn Croft, independent marketing and market research consultant. With 15 years of experience at companies such as Genzyme, Bayer Corporation, Shire, and Eli Lilly, Lynn has expertise in market research, market analysis regarding product launches, pricing and lifecycle management. 

 

[Is your quantitative market research data collected & ready for analysis? Now what? Check out Research Rockstar’s real-time, online training program “Introduction to Quantitative Data Analysis” for help getting started. MRA PRC approved for 6 hours.]

 

May
0

Market Research Lessons from Edward Snowden

Love him or hate him, Edward Snowden is a catalyst for change.

How did he do it? And what can we market researchers learn from it?

The Big Reveal Gets Big Attention

Snowden didn’t suggest that there might be an issue. He didn’t send out a 50 slide PowerPoint. He didn’t bury his key point on a slide with 4 other “results.” He had a single message, and it was bold:  he stated that there was massive, secret surveillance of US citizens.

Would his message been as powerful if he revealed three other accusations at the same time? Probably not.

As researchers, we often have several key conclusions from a study. On one hand, that shows a good ROI; our client paid $X, and got several key take aways. But should there be a “primary” conclusion? Should we be doing a better job of creating a “star” result, something that is likely to be shocking enough to grab attention, without be diluted by other points?

Multiple Proof Points Create Legitimacy

Snowden didn’t just leak one document or one piece of data. He had many documents to support his conclusion (different news reports vary as to the exact number, but the range is 20,000 to over a million documents). I bet very few people actually looked at the documents; just seeing that there were lots of them was convincing.

Would his accusations have been as compelling if he only had one document? Probably not.

In research, we often draw conclusions from a single study. We do a survey, focus group, ethnographic study or some other method, and then deliver the conclusions from that single study. It can be hard for clients to trust data from a single study, no matter how compelling.  Can we be doing a better job of using multiple data sources?

Market Researchers versus Whistleblowers

Okay, delivering market research results is quite different than releasing classified national security material. But these two lessons do apply, especially if our goal is to have our research truly get attention. If you were a whistleblower, how would you build your case? Prepare for your big reveal? And could you be doing the same things when you are preparing to deliver your next research-based insights?

 

[New to Research Rockstar? Interested in market research training? Try a free sample class. Sign up today: Sample Class Offer]

Feb
0

Mobile Ethnography: The New ‘Organic’ Market Research Tool to Try in 2014

mobile ethnographyWhat’s the most promising aspect of mobility in market research? Mobile ethnographynot pushing surveys to mobile devices.

Mobile Ethnography: Innovation in Progress

While there are only a few tools available so far, this area is developing quickly.  Imagine being able to ask people to basically research themselves. They can opt-in to a research experience using their mobile phones, take pictures and videos of where they are, capture sound bites as they’re happening, scan barcodes or QR codes of interest, and so forth. Cool? Yes.

So what’s the downside? This market research technique isn’t perfectly controllable. Participants will vary in their adherence to instructions, volume of contributions, and time spent.  There will be inconsistencies, and surprises.

So like anything else, it’s a trade-off. Yes, there are inconsistencies—but for some research needs, mobile ethnography offers superior speed, respondent engagement and ultimately insights.  It’s not as structured as a “conventional” survey, but that’s ok.

Healthier Market Research?

I like organic produce. But it tends to be more inconsistent in appearance than “conventional” options. Similarly, some new ‘organic’ market research tools (like mobile ethnography), are a bit more inconsistent—but perhaps more nutritious. We researchers need to raise awareness with our clients, be they internal or external, that the flaws of some new methods are really cosmetic; that at the heart of new methods, we’re getting something that’s potentially a lot tastier.

Next steps?

Check out some of the early products. Three are below and, when you check them out, you will see they are very different from one another.

  • QualMeetings from 20/20 Research
  • EthOS from EthOS App, a UK-based firm
  • And the folks at MyServiceFellow are offering a free demo (as of January 2014—this may change at any time).

 

[Want to read more about organic market research options? Download our white paper here.]