Voices: the CMB Blog

Dear Dr. Jay,

We’ve been testing new concepts for years. The magic score to move forward in the new product development process is a 40% top 2 box score to purchase intent on a 5 point scale. How do I know if 40% is still a good benchmark? Are there any other measures that might be useful in predicting success?

-Normatively Challenged

Dear Norm,

I have some good news—you may have a big data mining challenge. Situations like yours are why I always ask our clients two questions: (1) what do you already know about this problem, and (2) what information do you have in-house that might shed some light on a solution? You say you’ve been testing concepts for years.  Do you have a database of concepts already set up? If not, can you easily get access to your concept scores?

Look back on all of the concepts you have ever tested, and try to understand what makes for a successful idea. In addition to all the traditional concept test measures like purchase intent, believability, and uniqueness, you can also append marketing spend, distribution measures, and perhaps even social media trend data. You might even want to include economic condition information like the rate of inflation, the prime rate of interest, and the average DOW stock index. While many of these appended variables might be outside of your control, they may serve to help you understand what might happen if you launch a new product under various market conditions.

Take heart Norm, you are most definitely not alone. In fact, I recently attended a presentation on Big Data hosted by the Association of Management Consulting Firms. There, Steve Sashihara, CEO of Princeton Consultants, suggested there are four key stages for integrating big data into practice. The first stage is to monitor the market. At CMB, we typically rely on dashboards to show what is happening. The second stage is to analyze the data. Are you improving, getting worse, or just holding your own? However, only going this far with the data doesn’t really provide any insight into what to do. To take it to the next level, you need enter the third stage: building predictive models that forecast what might happen if you make changes to any of the factors that impact the results. The true value to your organization is really in the fourth stage of the process—recommending action. The tools that build models have become increasingly powerful in the past few years. The computing power now permits you to model millions of combinations to determine the optimal outcomes from all possible executions.

In my experience, there are usually many attributes that can be improved to optimize your key performance measure. In modeling, you’re looking for the attributes with the largest impact and the cost associated with implementing those changes to your offer. It’s possible that the second best improvement plan might only cost a small percentage of the best option. If you’re in the business of providing cellular device coverage, why build more towers if fixing your customer service would improve your retention almost as much?

Got a burning research question? You can send your questions to DearDrJay@cmbinfo.com or submit anonymously here.

Dr. Jay Weiner is CMB’s senior methodologist and VP of Advanced Analytics. Jay earned his Ph.D. in Marketing/Research from the University of Texas at Arlington and regularly publishes and presents on topics, including conjoint, choice, and pricing.

“How do I love thee? Let me count the ways.” “You’re my favorite brand ever.” “You’ve taken such good care of me over the years we’ve been together.” “I can see myself spending the rest of my life with you.” How many of your customers would say such things about you?

Loyalty is a behavior, and behaviors often have underlying attitudes that drive them. We might continue to purchase the same product over and over for a variety of reasons. Don’t get me wrong: repeat business is almost always a good thing. But, if it comes at a negative margin, it may not be a good thing. If you frequently incentivize your customers, you might be buying loyalty (deal loyalty), but are you making money doing it? If your deal loyals are promoting you, are they promoting the deal or your brand? In a perfect world, we not only create a behavioral commitment, but also an emotional bond with the brand and, ultimately, the company.

Many companies track the Net Promoter Score (NPS) as a measure of loyalty. This adds another potential behavior to the mix—advocacy. If we look at a traditional purchase conversion ladder, advocacy or evangelism would be at the top of the pyramid. Promoters are certainly advocates, but are they also evangelists? Is promotion really enough? Don’t you really want to know what they’re saying?

Advocacy is attempting to influence decisions. Evangelism is relaying information about a particular set of beliefs to encourage conversion. Advocacy may encourage lexicographic information processing—buy cheapest, buy fastest, etc. Evangelism should encourage a more holistic view of evaluating the brand. The implication is that beliefs are probably more deeply rooted in brand performance. This creates a bond with the brand that transcends getting a good deal. You want folks that are proud to wear your logo and serve your product as well as folks who would gladly buy other goods/services from you if you want to extend the franchise.

In a recent survey, we found that about 60% of brands promoters love the brand. If they don’t love you, what are they saying about you? On the flip side, over 80% of those that love you are promoters.  Clearly promoters have value to the franchise in helping grow the brand. As a company, you not only want more promoters, you’d like to believe they are, in fact, promoting the brand and the company and not something else.

How can we improve on tracking the NPS score? We find a way to capture the emotional bond of your true loyals. Those customers who love you will clearly go out of their way to buy you, pay more for your product or service, and proudly share your brand with others. Growing this share of your customer base will certainly help you grow both the top line sales and bottom line net profits.

At CMB, we’ve been looking at the Emotional Fingerprints™ brands leave on their customers. We’ve developed a measure of the emotional bond customers have for brands. When we look across different segments of your loyal customers, we can clearly see that those that love you clearly are more bonded to your franchise.

So, even if you forgot the roses this Valentine’s Day, don’t forget to send your favorite customers a forget-me-not. Let them know how much you appreciate their business and their love.

Dr. Jay Weiner is the top digit-head at CMB. Starting next month, he’ll answer your burning market research questions in his new blog series: Dear Dr. Jay. You can send your questions to DearDrJay@cmbinfo.com or submit anonymously here: http://forms.cmbinfo.com/dear-dr.-jay