How to use market research to help drive your business forward
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This presentation explains the importance of understanding your customers and in turn emphasises the need for your business or brand to be well understood by them. It then offers 10 ways in which insights from market research can help you drive your business forward with confidence.
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How to use market research to help drive your business forward
- 1. How to use market research to help drive your business forward with confidence © Habit5 2014
- 2. 2David Jones, Managing Director, Habit5 • Full Member of the Market Research Society (MMRS) • Fellow of the Institute of Direct Marketing (FIDM) • Chartered Marketer (CIM Diploma) • 15 years in Planning and Strategy roles at leading regional communications agencies • 10 years in senior client side roles, including being Head of Communications at first direct • Balanced appreciation of research, marketing, brand and customer needs • Led research and consulting projects for: Intercontinental Hotels, first direct, HSBC, The Open University, Travis Perkins, Budget Insurance Group, Thompson & Morgan, Bravissimo, Topps Tiles, Acdoco, Keycamp and many others Who am I?
- 3. At Habit5 we believe that the brands that understand best, demonstrate this understanding and are in turn understood by their customers, will do best in their markets. 3
- 4. We believe the brands that understand best, demonstrate this understanding and are in turn understood by their customers, will do best in their markets. Humans have a deep seated desire to be understood, it is a key part of the social construction of the self. 4 Why Find out more at: http://www.scoop.it/t/human-understanding
- 5. Brands need to be very well understood by their customers in order to lead their markets. Simon Sinek – Start with why 5 Why
- 6. There is a growing imperative on brands and businesses to demonstrate understanding and deliver value, based upon the data they hold on people. 6 Why
- 7. - 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 Current needs Future needs Preferences Use of information Pricing Overall Understanding Brand Why Brand Understanding Comparative Satisfaction Recommendation MUM Score Mean score Top score Lowest score 7 Why Source: Habit5 - Mutual Understanding Measure 2013 The leading brands get a lot of things right but they can still make improvements in understanding.
- 8. But how to navigate your business into this advantageous position? 8 How
- 9. Research serves to make building stones out of stumbling blocks. Arthur D. Little Founder of International Management Consultancy 9 How What is research, but a blind date with knowledge. William Henry 1774-1836, British Chemist Research is formalized curiosity. It is poking and prying with a purpose. Zora Neale Hurston American folklorist, anthropologist, and author Research
- 10. Research is a means to an end. The end is insight. 10 How "A new understanding, probably of human behaviour or attitude, as a result of which action may be taken and an enterprise more efficiently conducted.“ Jeremy Bullmore Former President of the Market Research Society (MRS)
- 11. 10 ways in which research can help drive your business forward. 11 How
- 12. 1. Predict future needs Using desk research, horizon scanning, scenario planning or simply asking the ? 12 How
- 13. 2. Improve understanding of current needs Using qualitative or quantitative methods 13 How
- 14. 3. Learn from life Using ethnography and mystery shopping 14 How
- 15. 4. Build upon behaviour Using observational techniques and nudge 15 How
- 16. 5. Appreciate how customers like to do things Using journey mapping to optimise the experience 16 How
- 17. 6. Collaborate on product improvements Using offline or online co-creation 17 How
- 18. 7. Get the price right Using pricing sensitivity research 18 How
- 19. 8. Evaluate brand strength & performance Using brand health measures 19 How Advocacy Satisfaction Conversion Consideration Awareness Bonding Advantage Performance Relevance Presence Frequent lower value purchase Infrequent higher value purchase
- 20. 9. Measure customer satisfaction Using touchpoint research tools 20 How
- 21. 10. Test for success Using prototypes, beta & hothousing 21 How The 2 T’s of Test The Planning T The Design T
- 22. 10 ways in which research can help Drive your business forward with confidence 22 1. Predict future needs 2. Improve understanding of current needs 3. Learn from life 4. Build upon behaviour 5. Appreciate how customers like to do things 6. Collaborate on product improvements 7. Get the price right 8. Evaluate brand strength & performance 9. Measure customer satisfaction 10. Test for success
- 23. 23 THANK YOU. David Jones Managing Director T. +44 (0) 1522 519388 M. +44 (0) 7702 596260 david.jones@habit5.co.uk www.habit5.co.uk Where Main Office Location: Habit5 Unit S15 Sparkhouse Enterprise@Lincoln Building Rope Walk Lincoln LN6 7DQ UNITED KINGDOM If you would like a copy of this presentation. Please give me your business card or send me an email and I will provide a Dropbox link to it.
- 24. Any questions? 24 What would you most like to know, to help drive your business forward?
Notas del editor
- Welcome Thanks for coming along Hopefully you’ll get some value from my talk today on…. Do ask any ?s you may have at the end or over a slice of pizza
- So, a rather existential ? To start us of ‘Who am I? (to talk, I guess) I’m not going to blow my own trumpet through this you can have a read for yourselves. The bottom line is that I’ve got a lot of practical experience to draw upon. I’ve got to an age where it would be great to have a little less experience to draw upon. Get a few years back. That said Habit5 itself is only one year old so – new beginnings…
- To kick us off with a hypothesis of sorts, if you like…where all good research should start from… “At Habit5 we believe that the brands that understand best, demonstrate this understanding and are in turn understood by their customers, will do best in their markets.” It sounds like common sense in many ways. But very few brands and businesses achieve this. Mainly because it takes, expertise, time and effort. So why do it? Why bother?
- First and most importantly because… Humans have a deep seated desire to be understood, it is a key part of the social construction of the self. I want you to understand me because what you say to me and your behaviour around me, helps me understand myself. Social media has created a new platform for understanding, misunderstanding and being understood in multiple ways. You can find out more on human understanding on my Scoop.it curated topic that starts with John Locke’s ‘Essay on Human Understanding’ from 1690 and goes right up to today.
- Perhaps less obvious, is that brands need to be well understood by their customers in order to lead their markets. Ted Talk guru Simon Sinek has written a compelling book and delivered an equally compelling talk on the importance of starting with ‘Why’ your brand or business exists. His very simple Golden Circles model illustrates that market leading brands most of their time communicating ‘Why’ they exist. Their purpose. Their mission. What they stand for or against. Some time communicating about how they do things and a small amount of time communicating about what they do. Follow and also ran brands do the opposite.
- Thirdly, there is a growing imperative on brands and businesses to demonstrate understanding and deliver value back, based upon the data they hold on people. The EC Commissioners are threatening to introduce legislation in 2015 enabling consumers to compel a brand to digitally forget them. This is already hitting search engines following an EU Court of Justice ruling in May this year. The brands and businesses that get this right will outperform their competitors.
- The leading brands get a lot of things right but they can still make improvements in understanding. We ran some research back in the autumn of last year that looked at how well 20 leading UK brands understood their customers and in turn how well they were understood by their customers, across a sample of 1,128 UK Adults. We call this the Mutual Understanding Measure. What we found amongst other things was that:- Whilst Amazon does lead on ‘Use of information’ performance on this dimension lags that in all other areas Very few brands are doing a good job at explaining in a memorable and compelling way ‘Why they exist’ There was a big performance gap between the best and worst performing brand on every dimension, even though we only researched household name brands The market leaders on understanding in every industry sector researched had the most satisfied customers and the customers most prepared to recommend them Customer understanding goes deeper than satisfaction and recommendation (because there is more at stake – they really know me, what I like, the way I like to do things) and understanding is likely to be a stronger indicator of long term customer loyalty
- But how to navigate your business into this advantageous position?
- Research can help. It isn’t the full answer but it can help a lot. In research we like to use verbatim quotes. Here are a few good ones on research itself….
- I should stress that research is a means to an end. The end is insight. What do I mean by insight… "A new understanding, probably of human behaviour or attitude, as a result of which action may be taken and an enterprise more efficiently conducted.“ Jeremy Bullmore is a highly quotable chap…he also said… “Why is a Good Insight Like a Refrigerator? Because the moment you look into it, a light comes on.”
- Hopefully, I have convinced you of the importance and business benefits of understanding your customers better. What follow are 10 ways in which market research can help you do that…
- Habit5 is currently working with Best Western hotels on a brand strategy out to 2020. Putting this in place has involved lots of desk research on all published sources looking at future trends and industry projections. Scanning the horizon for ‘adjacent’ opportunities – new indirectly related digital technologies that could enhance the hotel guest stay experience. If you don’t do this already, subscribe to emails from the likes of springwise, trendwatching and trendhunter, look out for things that could positively or negatively impact your sector or category. Mashable, Wired and KickStarter can give you a different take on the near or now future. As author William Gibson said “The future is here, it is just not evenly distributed yet”. Why not ask your customers about how they see the medium to long term future? We encouraged HSBC to do that in order to support its marketing of ‘financial planning’.
- Back to the here and now. How to get a better handle on your customers or clients - current needs? Asking them in research can make a lot of sense. Consumer concerns around being sold to are largely removed, particularly if the research is done independently. This can help them open up and reveal more, safe in the knowledge that their input is anonymised. You can use qualitative research – semi-structured flexible 121 depth interviews or focus groups informed by how personal or social the purchase tends to be Alternatively…. Quantitative research – online or offline surveys, questionnaires and sampling, etc can yield a lot of insights here. To investigate the degree of fit between what the customer needs and what your product or service delivers. You may want to work your way up Maslow’s Hierarchy of Needs to see which higher order needs your product is, or could meet – how aspirational is it? how readily can it be personalised, customised or individualised? A research investigation of customer needs could inform a segmentation of your base, into clusters that share the same motivating needs.
- Just studying where people live, the environments they inhabit can tell us a lot – formally this is called ethnography. Whilst often used in relation to tribal cultures it can just as readily be applied to the UK:- - We investigated how hotel rooms were left by guests for a leading hotel chain to inform room design. - Recent experience in conducting research for the Woodland Trust the presence of sunrooms full of toys were a recurring theme – all spoke of creating more space and valuing a middle space between outside and inside, also a strong desire on the part of parents to keep their children positively occupied and engaged - Mystery Shopping the customer experience can be illuminating too – for First Buses we left cuddly toys on board to test out the Lost Property Customer Service standards
- Exploring how people behave can deliver great insights too through… Personal observation Accompanied shopping online or instore Mechanical observation - eye-tracking analysis of web pages, a technique we’ve used in testing prototype software for HSBC business managers across Europe Data analysis - We are currently examining patterns in ‘out of catchment’ ticket bookings for Lincoln arts venues Understanding how patterns of thought influence behaviour are key too I imagine that you’ve heard of ‘Behavioural Economics’ a field popularised by Noble Prize-winner Daniel Kahneman, that amongst other things investigates cognitive biases like: anchoring effect and the optimism bias that illustrate we are all a long way from the highly rational ‘Economic Man’ of classical theory. Practical ‘Nudge’ applications of Behavioural Economics have emerged ‘Pension Opt Outs’ rather than ‘Pension Opt Ins’ being a current topical example.
- Have you mapped out the touchpoints or contacts in your current customer or client journey? Doing so can often reveal significant weaknesses.. Points were customer expectations are not being met or set Badly worded procedural or administrative letters and emails Hard to navigate process steps We’ve got lots of experience in mapping each step in the journey, examining: data held, customer feedback, communications used, opportunities missed, etc And providing practical recommendations on how to improve things.
- Your customers or clients probably already know, from being on the receiving end, how to make significant improvements to your product or service. Why not engage their help. We’ve recently devised and run both online and offline co-creation sessions with teenagers for the Woodland Trust, to inform the development of new ways of engaging with the charity.
- Research has proven approaches to product and service pricing optimisation that don’t rely on Brucie… Westendorp’s Pricing Sensitivity Model (PSM) on the right, might not be as much fun but it gets the job done, when applied in quantitative research.
- You may decide to invest in marketing your brand but how to evaluate the performance of that investment, over time, given that the sales impact might be deferred or hard to pinpoint. Market research can apply tried and proven models to track the performance of a brand through time and compare performance against key competitor brands. Different brand health or brand dynamics models can be applied to reflect the kind of industry or sector being researched.
- Monitoring how your business, product or service is performing for customers on an ongoing basis can be vitally important. Net Promoter Score (NPS) as illustrated here, is one way to track the positive or negative impact of experiencing a particular touchpoint upon a customer. NPS score or Customer Satisfaction Indexes can be a useful and necessary counterbalance to profit targets. This form of research is a good predictor of the future sustainability of profits and the trajectory of the business.
- Research can help you learn fast about how to achieve new things successfully. That might involve running prototype research – as we did for Optima Graphic Design on be half of BHF and UEFA for a new healthy eating app they were developing. Or In designing test marketing or hothousing in such a way that the results will be robust and repeatable upon rollout.
- That’s at about a 95% Confidence Level with a +/- 3% Confidence Interval. Hopefully either now or in the future your business will benefit from the insights that research can reveal.
- Are there any easy questions? Are there any questions you would like to put into research? I have a question for you..to leave you with.