Voices: the CMB Blog

This summer, a Harvard Business Review case study presented the dilemma of a modern dance  company caught between their mission to grow and enter new markets, and their mandate to remain creative and groundbreaking. The arguments on both sides are pretty compelling.  A new employee pleads her case that the dance company needs to know who their customers are and what they want, while the Company’s founder argues this information would be detrimental to creating challenging dance performances— “if we ask them what they want, we’ll end up doing Swan Lake every time.”Conversations like these aren’t just happening in the halls of fictional dance companies, they’ve been challenging companies for at least a century. Take this quote from Steve Jobs, founder of what is arguably the most consistently innovative company today:

We figure out what we want.  And I think we’re pretty good at having the right discipline to think through whether a lot of other people are going to want it too.  That’s what we get paid to do. So you can’t go out and ask people, you know, what’s the next big [thing]?  There’s a great quote by Henry Ford, right? He said, ‘If I’d have asked my customers what they wanted, they would have told me ‘A faster horse.’ [2008 Interview with Fortune magazine]

In the past several years, I’ve sat in on talks, read articles, and spoken to lots of product developers who now feel that research and talking with customers provides little, if any, value.  They invariably point to Apple or that ubiquitous Ford-ism, but it seems to me that those who are dead set against customer research are missing the point.  It’s not the customers’ job to develop the solution, it’s simply the customers’ job to tell you about their experiences and what they’re trying to accomplish.  In the famous quote by Henry Ford, the takeaway isn’t that they should develop a faster horse.  Instead, it’s that people want to travel faster, and Ford came up with a better solution.

Let’s look at Apple, for example, if you take the latest version of the iPad, you’ll see they haven’t ignored customers at all.  People are more connected today than at any other point in history; our desire to connect with people and share, access, purchase, and manage media/content from anywhere at any time has only grown stronger with time.  Recognizing these trends, Apple made an incremental shift in current tablet technology and created a game-changing product.  The iPad might not be the perfect device for every user, but it performs great on attributes that allow us to connect with one another and consume content. 

What makes Apple special is their ability to anticipate needs becoming more important and that's what they did in the case of the iPad. But they don't just understand the customer needs from a macro level, they have a complete and nuanced understanding of the detailed needs that make up the entire customer experience.  So when it came time to build the next generation of tablets, they made the right decisions about screen size, processing speed, connectivity options, virtual keyboard size, touch screen sensitivity, gestures, etc., because they knew what mattered to customers.  The customers’ experience was the driving force behind those decisions.  This vision allows Apple to consistently churn out game-changers.

But donning a black turtleneck and taking the buttons off of your products won’t get you the next iPad.  While Apple may not engage in typical customer experience research, they have a culture that is customer focused from top to bottom. Their product development process is motivated, from concept to implementation, by the goal of providing seamless, user experience. Apple’s greatest innovations—the iPod, iPhone, and iPad—embrace simplicity and usability. Uncovering customer needs and creating products and services to meet them doesn’t require one of the greatest visionaries of all time, it can come through comprehensive customer experience research.

So we’re back to our dance company. How can they maintain their desire to grow with their commitment to boundary breaking dance?  The answer is customer research that identifies all of the customer wants and needs for a given product/service, and then tells you which ones matter the most.  Show goers may say they want to see Swan Lake, but do they really mean they want to recreate a powerful experience they had the first time they saw dance? Customer research that focuses on needs is a powerful tool, and critical to innovation whether developing a dance program or building a new processor. By knowing what matters to customers, organizations can discover unmet needs, find opportunities for disruptive innovation, know where to focus resources, and set the foundation for developing game-changing products and services

Needs based customer research is not about asking the customer to dream up the next new product, feature, or technology.  Nor is it about learning new ways to sell customers products they don’t really want.  It’s a proven method to help organizations connect with their customers and focus on what matters to them.  Apple’s success is based on a fundamental and detailed understanding of their customers.  Do you understand your customers in that way—or are you giving them Swan Lake?

Posted by Andrew Wilson, Andrew is an Account Director at CMB, he isn't sure about modern dance but awaits the iPad Mini with baited breath.

Headed to TMRE in November? Enter our code at registration and take 25% off the conference pass: CMB2012

On Sunday, The New York Times Magazine published a piece: How Companies Learn Your Secrets, by Charles Duhigg, author of the forthcoming The Power of Habit: Why We Do What We Do in Life and Business.  It’s an interesting article, especially for market researchers, and I recommend everyone take the time to read it.

Consumer "habits” are a big focus of the work we (market researchers) do as we seek to understand consumer behavior. From the perspective of the article, a large part of what we do is identify behavioral habits to help marketers find ways to insert their product or service into people's habit processes. 

In this blog, I want to focus on the insights the story shared about predictive analytics. Much of Duhigg's article looks at how Target conducts advanced analytics to identify data within their CRM system to predict whether a shopper is expecting a baby.  From a business process POV, and how we think about using predictive analytics, it’s important to point out a few relevant facts for market researchers:

1. It wasn’t a “fishing expedition”: The analysis started with a clear marketing benefit as the outcome – Target wanted to begin promoting itself to expectant mothers before the baby is born. As the article points out, by marketing to these families before the baby becomes public knowledge, Target can get beat the flood of marketers that begin pitching a range of products and services once the birth is entered into public record.  It was the marketing team that came to the analyst with a high-value opportunity.  The analyst did not create the winning marketing idea (“Hey! Let’s market to expectant mothers before the baby is born!”).  Instead, the analyst looked under every stone and in every corner of the data to find the key to unlock the opportunity.

2. The research didn’t stop with finding the key: The application of these insights required a lot more research to determine the best method of implementing the campaign.  For instance, Target ran several test campaigns to identify the best offers to send to the expectant mothers, and cycled through several messages to find just the right one in order to avoid revealing that Target was prying into the data.  Although the predictive analytics found the key, Target still relied on a comprehensive plan to make sure the findings were used in the best possible manner.

3. Don’t let this story increase your expectations: The Target approach has had a big impact on how the company markets to a highly valuable segment of shoppers.  It's a great success story, but it's also something that happened ten years ago.  While I’m sure the Guest Market Analytics team achieves many victories along the way, they also spent a lot of time reaching “dead-ends,” unable to find that magic key.  And most of the time, the predictive solution yields valuable but incremental gains, these high-profile stories are few and far between.

The article shares many interesting ideas and insights; the story about the re-positioning of Febreze highlights another great research success. I'm looking forward to reading Duhigg's book, and if it covers more of these thought provoking business cases, I expect we will be seeing Charles Duhigg’s name popping up in other discussions on market research.

Did you read the article? What do you think?

Did you miss our latest Webinar? Learn how Aflac Unleashed the Power of Discrete Choice, Positioning their Brand for the Future 

Posted by Jeff McKenna, Jeff is a Senior Consultant at CMB, and the creator and host of our Tools and Techniques Webinar Series.

The new year is a time for reflecting and looking forward to the next 12 months. And for businesses, as we enter the last weeks of 2011, it is critical that companies in all industries reflect upon the past year’s decisions and peer into the future.

There is little doubt that the economic strain of the past three years will continue to affect companies across industries. Yet, 2012 will hold both opportunities and challenges for market researchers.  More than in the past, our clients will need the ability to manage, analyze, and integrate massive amounts of data while gleaning insight and recommendations within very constrained budgets. 

Price sensitive clients will be asked to choose between mountains of data at low prices, or more targeted consultative approaches focused on insights, action and outcomes. To differentiate ourselves, research companies will need to create true partnerships that work to address the core needs of our clients. My prediction is not that 2012 will be an easy year, but that we as a company will continue to evolve and perfect practices that help our clients make sense and use of the data we collect.

We are urging our clients to read Drinking from the Fire Hose; authors Chris Frank and Paul Magnone effectively detail the issues related to having too much data and how effective companies and managers can ask the right questions to insure focus on their companies’ goals and decisions. Take the time to explore the “7 Questions” that they outline and revisit these questions throughout the year.

As with every year, 2012 will have its own set of challenges, but success lies in our ability to channel the lessons of the past year and make smart decisions for the coming year by asking the questions that count.  At Chadwick Martin Bailey we believe more than ever, in the importance of being true partners with our clients, so together we can connect the data points and develop strategic insights that lead to better business decisions.

For more on Drinking From the Fire Hose, read Christine Gimber's take on our recent event with Chris and Paul here.

Posted by Anne Bailey Berman. Anne is the President of Chadwick Martin Bailey and enjoys volunteering in the community, traveling with her family and spending time in her vegetable garden.

Last week, 14 CMBers headed down to sunny Orlando for The Market Research Event (TMRE). Back in the office, I asked my fellow attendees which parts of the conference stood out to them. As expected, Jim’s presentation with GE Care Credit, and Rich’s session with Aflac were fan favorites (and these were votes from people other than Jim and Rich!). But over and over again the same talk was highlighted—Sheena Iyengar’s keynote on the nature of choice based on her 2010 book The Art of Choosing. Dr. Iyengar’s presentation was my favorite as well; so much so, that I bought the book, guarded it from jealous colleagues, and read it in two days.

Iyengar, a psychology professor at Columbia, explores the nature of choice through a social-psychological lens, and by conducting rigorous and thoughtful academic research— refreshing in a time when fluffy pop-sociology books rule the book lists. She contends choice is at once  central to self-identity, and capable of overwhelming us when they we are unable to effectively process them.

Though we live in an age where abundance is worshipped, and Target and Costco thrive, those of us who’ve found ourselves staring open mouthed at the cereal aisle for too long understand the paralysis that can accompany too much choice. In particular, it can be debilitating to be faced with an array of choices we are not readily able to distinguish from one another. Iyengar, who is blind, told a great story about asking two women in a nail salon to help her choose a color by describing the difference between the virtually indistinguishable Adore-a-ball and Ballet Slippers light pink nail polish. Her point is we’re often drawn to the places that offer us the greatest choice  (would you go to a salon that only offered 5 colors?), but if we’re not experts, we don’t know how to choose without a way to articulate what makes one product different from another.

Iyengar’s famous ”jam experiment” (you may have heard about it, even if you don’t know her name) illustrates this point nicely. In the mid-90’s as a Stanford grad student she set up two tables with samples of jam at a California supermarket. One table featured just six choices, while the other offered nearly 30. She found that shoppers who visited the table with fewer samples were significantly more likely to buy the jam, as compared with those who’d sample the greater selection. What was more striking was that those who were offered fewer choices also reported greater satisfaction with their purchase as well.

What does this mean for market researchers, for companies, and for those of us standing around perplexed in the grocery store? Iyengar does propose “7” as the optimal number of choices a person can handle, but concedes choosing is more complicated than a “magical” number — it’s informed by context and culture. Perfect number or not, she argues that limiting choices to what can truly be differentiated will make for more satisfied and effective choosers. Iyengar makes a good case that focusing on improving the process of choosing is far more effective tool than just increasing the number of options.

Posted by Megan McManaman. Megan is CMB's Content Marketing Manager and would happily go to a nail salon with just 5 nail polish colors. Follow her on Twitter at @Megz79.

Nearly a year ago, my friend and long-time client Chris Frank (formerly of Microsoft, now Vice President, Global Marketplace Insights at American Express) told me he’d been approached to write a book.  Several good-natured digs and a decent steak later, I learned that Chris was serious. By the end of the meal I had been sworn to secrecy. Over the course of the last 10 months I’ve gotten a sneak peek at the title (Drinking from the Fire Hose) and its contents (based on a proof copy Chris sent me last month).  Now the book, a clarion call for smart effective data use—not just more data, is officially available for sale. The time is right for me to tell the world about it.

• I wanted to see if I could do it.

• I consider Drinking From the Fire Hose a “must read” for anyone who either uses data to make decisions, or who provides data, insight, and recommendations for decision makers to use in their decision making. 

“Fire Hose” asks researchers and decision makers to step back and siphon the jet stream of data most of us have at our fingertips, and to be parsimonious about which insights we bring to the decision makers we support to help them act confidently.  One of my favorite sections was the description of the Customer Impact Assessment (CIA).  I’ve seen versions of this standard used at most great companies with outstanding market research/consumer insights teams.  Jeff Resnick (formerly of eBay, now at Zynga) always asks the question “Okay, so who wins here and how do we make sure they know it?  Who loses here, and how do we help them win somewhere else.” It’s a great reminder of questions we should always be asking ourselves as researchers whenever we frame up recommendations. 

I’ve read some of Fire Hoses' predecessors in this “making sense of a data-driven world” genre. "Fire Hose" goes beyond the field, providing an important contrast to books like Ian Ayers' “Super Crunchers” and Stephen Baker’s “The Numerati,” books whose fascination with the amount of data obscure the importance of analysis in real world application.  While these books do fabulous jobs of describing the possible, Frank and Magnone do an equally great job prescribing what is practical.  If Ayers’ and Baker’s approach is the excitable young resident eager to make the most exotic diagnoses; Fire Hoses’ is your trusted primary care doctor who gets your diagnosis right because he understands the science of what ails you, and because he’s treated the ailment before.

Note:  I am very tempted to insert a whole slew of equally bad analogies here, but will wait until my next post.

But, who is this book for?  My guess is that most of the concepts in "Fire Hose" will feel familiar to all of us.  But that few or none of us practice all of the concepts as thoroughly and habitually as we should.  For me personally, I learned a number of new tricks.  But at least equally important, I was reminded of some key “rules” that are very familiar, but that I don’t follow as religiously as I should.  The book has left me energized and re-committed to nailing some of the fundamentals that can separate very good research from great research.  I hope you all feel the same when you read it.

Now, for those of you who prefer a more whimsical Brant, I provide the following “sneak peak” of my next Drinking from the Fire Hose blog post…

“I didn’t realize he had such kind eyes.”  That was my wife’s initial reaction when I plopped this month’s issue of the Market Research Association’s “Alert” magazine in front of my wife.  And you know what, I think she’s right.  I never expected to see a nearly life-sized photo of Chris Frank’s mug quite so close up.  But truth be told, I must admit he’s pretty photogenic.

Posted by Brant Cruz. Brant is a VP and resident segmentation guru at CMB.