As we get ready for this year's Shopper Insights in Action Conference, we are taking a look back at last year's co-presentation by Stephen Day of Electronic Arts and CMB's Brant Cruz on research to help with the launch of EA Active, EA's entree into the fitness gaming market.
Following last year's session Stephen was kind of enough to sit down for a quick interview on the topic.
CMB: What were the big takeaways from your presentation?
This segmentation really helped us define and refine what we are doing on this specific product (EA Active) in the marketplace. For this product in particular, we didn’t have a whole lot of data about who we should market to, who these people are, etc., so it really helped us not only really understand this marketplace and market to them in a way that makes sense.
CMB: One of the things you talked about was using in home ethnography on the front end and the quantitative ethnography on the back end, how did you merge those two information sources together?
The qualitative was really used more to guide the product development and refinement phase, along with some demographic information. We used the data from that to help our product development efforts. With the segmentation we incorporated some product development components but really looked down the line at the product development road map to match key segments with new innovative products once we’re out of the gate with this initial offering.
CMB: Was there anything in particular you think made this segmentation particularly successful or useful?
The segmentation for us, at a holistic level, was exactly what we needed. We didn’t know a lot about the fitness marketplace in general. We had ideas and hypotheses but this helped us clarify the internal thinking about where we need to go and what we need to do. And it really helped us map out the future of this product line.
CMB: Now that you’ve launched EA Active, how will you use this information?
We’re definitely going to use it. Going forward we’ll be looking at some of the specific segments you (CMB) recommended as high priority segments that we can develop products for, and market to effectively. It is definitely going to help us clarify the road map for future product development and product market strategies.
CMB: As we wrap up here at the Shopper Insights in Action Conference, any big takeaways you can use?
The one big takeaway for me and for us as a company is that we really need to do a bit more research that enables us to get into the mind-set of the shopper. We haven’t done a whole lot of work in that area. Our work is primarily focused on product development and product marketing, but given the status of the economy and changing times I think it is more critical now to understand consumer behavior at the point of purchase so we can design the best products and services for them.
CMB: Thanks Stephen!
Posted by Josh Mendelsohn. Josh is our VP of Marketing and loves live music, tv, great food, market research, New Orleans, marketing, his family, Boston and sports. You can follow him on Twitter @mendelj2.
At 9:00 PM tonight east coast time, the NBA’s LeBron James will announce which city he will be playing basketball in for the next 5-6 years via a one-hour special on ESPN. As a near-rabid Boston Celtics fan, I’ve been spending a bit too much time lately thinking about LeBron's destination (and other free agents), and frankly tonight’s spectacle has me fascinated. Fascinated as a basketball fan, and probably fascinated as a wannabe agent and/or high-profile public relations executive. Given that my day job is as a market-research-based consultant, however, I figure that if I’m going to be spending any time today thinking about LeBron, I better tie it in to what I really do in some way. Below is my (somewhat feeble) attempt at this.
Sure, on one hand, market research is a science. And each of us who work in the industry can likely spout off a couple hundred 50-cent words related to methodology, sampling, or analysis. But where the rubber really meets the road is when we recommend to our clients (internal or external) what they should do about what the numbers say. One thing that all great market researchers (and the business decision makers they partner with) do is to always consider “The Law of Unintended Consequences” [screen fades to rolling thunderstorm with lightning and Vera Miles simultaneously screaming from the shower at the Bates Motel). Given ESPN’s insiders are largely reporting that LeBron is likely headed to Miami, I’m worried that LeBron and/or his advisors have either not considered this “law” or haven’t considered it from the right angles. So, I’ll use this forum to take my shot at it.
There’s an old saying in supplier-side Market Research: “Good, Fast, and Cheap. Pick 2.” Those of you who work in research know exactly what I mean. I think LeBron faces a similar trade-off (I promise not to start delving into the relative merits of Dual Choice Based Conjoint versus Adaptive Choice Based Conjoint as much as many for you may hunger for that). I think the three legs of LeBron’s choice set are:
- Championships – if and how many titles he can win over the next 6 years
- Legacy – how he will be remembered by basketball fans for what he has done on the court
- Brand Image – what the world beyond basketball will think of him, including the less tangible (general public sentiment) and tangible (short- and long-term sponsorship opportunities) associated with being LeBron and this decision
Where’s money you ask? I consider money a constant in this equation (and we market researchers love constants). He has the best combination of cost of living and tax rates in Miami. He can get the most guaranteed money from the Cavs. He has the best baseline opportunities for sponsorship dollars with the NY Knicks – likely followed by New Jersey (soon to be in Brooklyn), Houston (connecting with Yao Ming and his huge following in China) and other big-market teams like the LA Clippers and Chicago Bulls. In my mind, this all evens out. With the right people advising him, he can earn crazy, and “about equal” money in any of these destinations. Therefore it is probably not a key driver of his decision due to a lack of variation in this independent variable (how’s that for fancy market research lingo?).
I’m also taking “lifestyle” out of this equation. If I can travel 75-80 nights per year, criss-crossing the country in coach class all the way, then LeBron can make any of these cities work. Again, given his resources, and the fact that we’re talking about a relatively short span of what I hope is a long life for him, I just can’t see this being as salient as the other three. Maybe he’s considering it, but it must be a secondary or tertiary driver.
We market researchers love matrices, don’t we? I do anyway. Below is a matrix I’ve created to summarize the “performance” results on what I think LeBron should be considering in his decision for each city.
My simple analysis says that he should pick Cleveland, but I could also easily support a decision to join the Knicks or maybe even the Nets. But Miami? I just don’t see it. “Championships” seem a fickle basket to put all one’s eggs in, as basketball is a team sport and injuries and other human tragedies happen.
And to spend an hour telling us that he’s decided to team up with two other superstars all making maximum money? It feels like a possible PR nightmare, and it seems like cheating to me, Yankees style. The ultimate dismissal of The Law of Unintended Consequences. (Note: I fully expect that this will result in many nasty posts about the Celtics and Red Sox from my NY friends who will perhaps rightfully call me hypocritical). I just don’t see how LeBron can possibly position this in an hour-long special, and then choose anywhere other than Cleveland or New York. The only spin I can see his team giving this is the “became friends while representing the USA during the Olympics” or “laser focused on winning.” But I think we’re too smart to fall for the flags, and Tiger already owns the “laser focused on winning” brand, perhaps to his own detriment.
My real problem is that I love LeBron the player, and everything I’ve read about him the person. I think he’s going to be making a mistake in a few hours. LeBron - if you’re listening, pick Cleveland, or the Knicks. And if you’re worried about being stuck for 6 years, how about structuring a deal so that years 4 and 5 are player options, and year 6 has both a player and a club option. This all seems fair to me, and both the Cavs and the Knicks should be amenable – as there is no viable Plan B.
Editor's Note: Brant is a great researcher, despite his lack of success in this prognostication.
Posted by Brant Cruz. Brant is a VP and segmentation guru at CMB. He is also proudly the judge of the Brant Approved awards in our upcoming CMB Cookbook and the self proclaimed funniest man in market research.
We have a lot of great events coming up here at CMB that you might be interested in. In addition to April 29th's Segmentation Best Practices webinar, we have three great conferences lined up for May including co-presentations with AMD and Tauck Worldwide. If you're interested in attending, let us know and we might be able to get you a discount.
1. Social Media and Community 2.0 Strategies, May 3-5, Boston
Understanding B2B Social Media: An AMD Case Study
CMB's Chris Neal and AMD's Georgeanna Liu will presenting a case study of how CMB helped AMD better understand and capitalize on social media to drive their business. In this session, we'll explain the steps that AMD took to review and refine their social media strategy focusing on very specific target audiences.
2. The Life Stage Marketing Summit, May 10-12, Chicago
Building a Boomer Focused Travel Package
CMB's Judy Melanson and Tauck Worldwide's Jeremy Palmer will share a case study of how the two companies worked together to develop a full understanding of Tauck Worldwide's current and potential Boomer guests and translate that information into a Boomer-focused tour product.
3. Netbook Summit, May 24th and 25th, San Francisco
CMB's Don Ryan will be speaking and moderating several sessions at the Netbook Summit May 24th
and 25th in San Francisco. Don will be sharing research on the consumerization of IT and where Netbooks fit into the purchasing agenda for the enterprise market.
Stock market volatility, consumer pessimism, economic instability, healthcare legislation, spring training... these are unquestionably uncertain times. When it comes to custom market research, the easiest thing to do is nothing. Wait it out. But for how long? And what will the opportunity cost be if you don't begin the process now?
Obviously, we all need to be cognizant of economic factors when deciding when to launch any project. However, as markets and consumers evolved any good information can help, whether it's external data or indications from your customers that their sentiments have stabilized - even if that stabilization is on the pessimistic side.
For market segmentation in particular, which involves a major investment and can be especially challenging during periods of uncertainty, it's important to at least begin the process for conducting the study.
Below, CMB's segmentation guru, Brant Cruz, highlighted three major concerns about conducting segmentation in the current economic situation, their validity, and how to address or even overcome those challenges.
Concern #1: A market segmentation exercise is less actionable in a bad economy than in a good one
Not so. Remember that segmentations make you smarter about how you make all your investments.
And as resources get scarcer, knowing who is most important (currently and in the future) makes tough decisions a bit easier. You could even make the argument that segmentations are actually more important in bad times.
Concern #2: The research could produce different (or invalid) segments
This should not be a cause for worry, and should not stop you from launching a study. For example, if you think about the key basis variables that would make for a great motivationally-based segmentation scheme (e.g., needs, attitudes, etc.), these things would not change based on economic climate.
The one area where you should expect to see some change in priority is the price dimension. But this is not necessarily a negative thing, and certainly no reason to throw your segmentation study in the recycle bin. Price is probably more important to nearly everyone now, and you may see more variance in any price variables included today than you would have a year ago. But this is the reality you will likely need to deal with for at least the next 12 months and possibly beyond.
The key is to understand the relative price sensitivity for each segment. This is critical as you make investment decisions in the current economic climate and as recovery continues.
Concern #3: The study will have a shorter shelf life, and the ROI from the research will be materially smaller
This is a small concern. I typically consider the shelf life of a segmentation study to be roughly 18- 30 months, with 24 months being about right for most companies. A major upturn in the economy might affect some segments more than others, and therefore change how we would value those segments. Each company would need to weigh the possibility and cost of needing to explore segmentation again earlier than this benchmark against the risk of proceeding in this market without this information.
Segmentation Best Practices webinar
April 29th at Noon: Chadwick Martin Bailey's Brant Cruz will present best practices of market segmentation based on his years of experience he has as CMB's segmentation guru working with clients like eBay, Electronic Arts, Plantronics, and Microsoft.
Register here to watch the full Webinar.
The best-laid strategic and tactical plans are doomed to fail if those tasked with executing them don't understand "who" they are building for or speaking to, and "why" they are different from other customers and prospects. To be successful, the whole organization needs to embrace the segments, and to do so, they need an easy way to learn all the important facts about them.
That's one reason why it is critical to engage the users of segmentation research in hands-on settings, ensuring true organizational understanding of and commitment to the segmentation. For example, we often run client workshops that include several group breakout exercises designed to accelerate action.
In many cases, participants in the workshops are asked to take an online "quiz" based on segmentation "magic questions" so that the segments are brought to life among the group. At least one of the main exercises is typically focused on product design and/or positioning, with another focused on marketing messaging and/or targeting. Shooting video footage and creating short vignettes using real segment members can also further brings segments to life for the people who in the end will be using this information to do their jobs.
Finally, these exercises are most successful when incorporating a competitive context and bringing together diverse groups of decision makers, forcing them to think outside of the box. This is needed because great segmentation research almost always provides a completely different lens through which to view your company, how it builds and sells products, and your view of the competition.
What steps do you take to make sure people understand the segments that will be marketing to, developing for, or providing service to?
Want to learn more? join us for our upcoming segmentation webinars:
February 17: Using Segmentation to Understand the Small Business Market: A Premera BCBS Case Study. Join CMB's Laurie Manos and Premera BCBS' David Barnes to learn how Premera used segmentation research to better understand the small business market. Register here.
April 29: Best Practices in SegmentationBrant Cruz will present best practices of market segmentation based on his years of experience as CMB's segmentation guru working with clients like eBay, Electronic Arts, Plantronics, and Microsoft. Register here.
Segmentation Best Practices webinar
Chadwick Martin Bailey's Brant Cruz will present best practices of market segmentation based on his years of experience he has as CMB's segmentation guru working with clients like eBay, Electronic Arts, Plantronics, and Microsoft.
Register here to watch the full Webinar.
Posted by Brant Cruz. Brant is a VP and segmentation guru at CMB. He is also proudly the judge of the Brant Approved awards in our upcoming CMB Cookbook and the self proclaimed funniest man in market research.