Voices: the CMB Blog

You may have heard the latest from Disney—they’re about to introduce a new “MagicBand” wristband letting wearers take advantage of perks like skipping to the front of the line for rides, as well as pay for meals, and purchase gifts.  It offers guests the ability to leave the wallet and paper tickets at home and focus on having fun.  The benefits to Disney can be huge, and a lot of people are seeing it that way; as one headline proclaimed: “Disney creates the happiest data mine on earth.”  Pretty clever, but of course there are those who aren’t quite as happy about the innovation; besides the thought of Big Brother entering our lives, won’t somebody think of the tan lines?But let's focus on the business aspect, the ability to track all activities and purchases on-park creates an immense opportunity for marketing, and much of the chatter concerns how Disney can use the data for direct marketing.  Did the guest ride all of the roller coasters?  Target promotional offers touting the latest thrill rides.  Did the guest get a picture with one of the cast members?  Send a doll to the guest’s suite to increase engagement.  Did the guest make a purchase at any of the retail stores?  Give them a coupon for a Disney store near their home.

Nearly everyone is coming up with ideas for how this might help Disney directly sell more of what it offers.  I’d like to think about how Disney can learn from this data in order to innovate and improve the experience.  In the direct marketing examples, the data remains data— it’s used solely to trigger marketing offers.  For market researchers, the data isn't useful until we find relationships that are relevant to decisions.

So, here is my challenge for you: what type of analysis do you think needs to be done?  What potential relationships might Disney find to innovate and change the experience?

I’ll get it started:

Disney could run on-property communication tests to improve messaging and information delivery.  By placing unique signs throughout the park, Disney can track all guests who pass each sign and capture behaviors after passing the sign.  Instead of waiting many weeks or months to gather feedback, Disney can get an “immediate” understanding of which signs work best – and potentially why.

Tell me your ideas in the comments:

Jeff is VP, Market Science Solutions at CMB. He'll have a pair of shiny new mouse ears for the most interesting idea. If he's not wearing his wristband you can still find him tweeting @McKennaJeff.

A practical and innovative approach to new product development.

The Challenge

Tauck Worldwide, an industry leader with over 85 years experience in premium guided tours, wanted to create a new travel concept to meet the needs of a population increasingly comfortable with researching, planning, and traveling on their own. Tauck needed innovative thinking to define and build a new type of tour product – one that appealed to next gen customers, conveyed a unique brand identity while standing out from competitors in the crowded travel market space. What We Did

CMB and principals from South Street Strategy Group used a multi-method, multi-source approach to:

• Select top opportunities on which to focus

• Ideate across functions with executives and senior managers, leveraging insight and experience in the market

• Research and assess the competitive landscape and baby boomer’s core  travel goals and needs – particularly un-met needs

• Test alternatives to guide product development, pricing and identify target guests who are most interested in the new product line

• Identify acquisition targets in the travel industry, new business models, and new product offerings, by leveraging core competencies, that would create significant value for the company and address baby boomer’s needs

• Work with the CEO, CFO, and COO and the New Ventures Group to ensure recommendations were aligned with business constraints, addressed operational challenges and met business goals

How It Was Used

Tauck launched the Culturious brand as a totally new product line on time and with unanimous board approval. The new brand, which currently consists of 8 packages and destinations, meets customer needs by offering small-group tours geared toward active baby boomers with an interest in active, culturally engaging travel. The brand has won awards, including the 2010 Innovation prize from the Connecticut Quality Improvement Award Partnerships (CQIA).

To learn more about our approach to New Product and Service Development click here.

For more of our award winning case studies click here. 

On a recent trip to Washington DC, I had a two hour delay on the flight out, and a broken Direct TV on the flight back, and yet when I got home I was delighted with my airline. I know this sounds unlikely, but as a result of the delay and the broken TV I racked up $75 in credits towards my next flight with JetBlue. Imagine that in the era of bag fees and paying for snacks!

Why is JetBlue, unlike many of its competitors, so willing to fork over credits for annoying, but still manageable service interruptions? To find out, I did what any curious market researcher without access to a ton of data would do, I Googled. Jet Blue’s Customer Bill of Rights was born after a series of storms in February of 2007. Thousands of vey unhappy customers were stranded on the East Coast for days.

Winter storms are typical and plague airlines around the globe, but JetBlue got itself into icy waters because they failed to react appropriately. Hesitant to cancel flights and tarnish their industry leading record for the fewest cancellations, executives waited too long to take action. By the time they did, passengers had been stranded on planes and at gates for upwards of 10 hours. Aircraft were literally frozen to the ground, customers were unable to rebook flights because gate agents were overloaded and the website did not allow for re-bookings. And compounding the problem, JetBlue did not have robust enough information systems to record and track the many bags lost in the chaos.

According to Texas A&M marketing professor Leonard Berry, JetBlue violated two core customer service codes during this storm – it did not provide customers with reliable service nor did it seem to resolve problems fairly. Clearly JetBlue had some work to do to regain the trust of its customers, and its Customer Bill of Rights was implemented shortly after the storms of 2007. JetBlue now offers vouchers or refunds for many frequently occurring flight snafus, including a free flight for a plane unable to reach a gate within two hours of landing, or $50 for two to three hour delays.

As a delighted customer, despite the inconveniences, I thought this was a great example of a company putting its money where its problems are. It should be a model for other companies as they try to provide customers with the highest level of service despite circumstances that are sometimes out of their control.

For more on Customer Experience and Loyalty, you might like: Do you care about your customers? Really care?

Amy Leathe is a Project Manager in CMB's Financial Services practice. She wrote this entry during a ground halt of an already serious delayed Virgin America flight. Here’s hoping they follow JetBlue’s lead!

All seasoned business travelers have their share of funny or painful airline stories, and I’m no exception.  But a particularly memorable incident on a recent flight to SFO got me thinking, and it’s the genesis for this blog.

Long story short, I was sitting by the window and celebrating the open middle seat next to me when a 6’8” 350 lb. man shuffled down the aisle and plopped into it.  Our conversation went exactly like this:

Giant:  “I know, I know, I’m a giant. Sorry.”
Brant:  “I have to admit, I was chanting ‘not him, not him’ from the moment you walked on.  Sorry.”

From there the conversation (between my snores) was amiable.  And then, somewhere over the Great Plains, my new friend spilled cranberry juice all over his seat-back table, and himself.  Have you ever seen a man that size try to clean himself in an area that small?  Not pretty.

My mind ran with this incident, and I immediately started thinking about the seemingly ridiculous (to me anyway) amount of cranberry and tomato juice that is consumed on airplanes.  The data below is completely fictitious, but I bet it is directionally accurate.

 

Now, what does this have to do with market research?  Not much… but I’ll reach.

To me, the chart above segues nicely into a discussion of the differences between Market Segmentation, and Needs-State (AKA “Occasion-Based”) Segmentation. 

Market Segmentation groups people or businesses into mutually exclusive and collectively exhaustive (MECE) groups.  It is limited by the realities that people and businesses are complex, don’t always think or behave the same way all the time, and because of this any segmentation scheme is forced to be an over-simplification of reality.  However, despite these limitations, great market segmentation can provide businesses with a common lexicon to use to describe the audiences it serves, prioritization of who to invest in, and the foundation for understanding what to say and where to say it in marketing at a brand level.  Market Segmentation is great for setting strategy.  If I’m a cranberry juice company, I’m going to go after segments that drink a lot of juice (kids, active women in their 40s, health/energy motivated people, etc.)   But it is far less useful in some important areas … namely in identifying the best places to reach our core segments, what improvements to make, and how to grow our business beyond the core.  This is where Needs-State Segmentation comes into play.

Needs-State Segmentation groups together occasions (e.g., shopping trip types, travel trip types, usage occasions and information gathering moments) based on common needs, rather than grouping people or businesses.  While the Needs-States are mutually exclusive, each person/business can experience multiple needs states as they interact with the category.  Needs-State Segmentation has two major orientations:  purchase decision occasions, and usage occasions.  A segmentation focused on purchase decision occasions will break down all of the critical moments in the purchase funnel where the process of buying is impacted (from seeing a commercial on T.V. to chatting with a friend / WOM).  This type of segmentation will dramatically improve a company’s ROI on their integrated marketing plans by highlighting the most important occasions to hit and what to communicate in them.  In contrast, a segmentation focused on usage occasions will lay out all of the moments when actual product usage occurs and what distinct needs must be fulfilled in each.  This is the bread and butter of innovation for both short-term improvements within an existing line of products and for longer-term high growth innovation where a new niche in the market is identified (like when Red Bull figured out that it could target the mid-night clubbing need state rather than the afternoon-pick-me-up occasion).

Market Segmentation and Needs-State Segmentation complement each other.  I can only assume that cross-country flights are a unique need state, where multiple segments swerve from their typical behaviors and begin pining for bright red liquids.  The question here is do the bright red liquid companies know this?  And if they do, do they understand the need state deeply enough to take full advantage of it?

Posted by Brant Cruz and Lori Wahl, Brant is resident segmentation guru and the Vice President of CMB’s eCommerce and Retail Practice. Read more of Brant’s thoughts on segmentation here.

Lori is a former CPG marketer turned researcher, who now runs her own strategic qualitative research consultancy, BIGinsightz.  Lori is an expert in strategic market research, having built three best-in-class insight processes for her former company that drive product, branding and selling strategies.  You can reach her at BIGinsightz@gmail.com

A recent report from Starwood Hotels made the provocative claim that: “73% of travelers would choose loyalty-program benefits over a spouse if they could take just one on the road.” It's a great headline, but speaking as a member of three airline loyalty programs, I would choose my husband over any benefits.

Travelling back and forth to Japan with my daughter since she was an infant has only reinforced this. For example, my loyalty program gives me the following benefits (this includes the family loyalty program benefits that I get from using my father’s points):

• Possible upgrade to business class (depending on dates and vacancy)

• Being able to bring more luggage

• Use of the airline lounges in Tokyo before boarding

• Priority boarding

• Connecting to an agent faster on the phone

• Earning of duty free “points and gift certificates” that can be used to buy duty free products, extra food, and alcohol on the plane

These loyalty benefits sounds pretty appealing, but of course they are not nearly as exciting when you are travelling alone with a small child, when there is absolutely no time to enjoy your extra benefits. I've had the following experiences more than once:

• When I go to the lounges I’m greeted with the why-are-you-bringing-a- screaming-toddler-in-here-face.

• I can get priority boarding having a toddler traveling with me anyways, so I don’t need the loyalty benefits to board earlier; I usually wait until the last moment to board anyway so my daughter uses up as much energy as possible before we board.

• I never have the time to flip through the duty free magazine to shop, and by the time my daughter is finally asleep, the on-board duty free service on board is over.

So, it seems I’m part of the 27%, according to this research. I would much rather bring my spouse on the long flight to Japan.  In fact, I would give up all of my loyalty benefits just so I can take some time to sleep, rest, go to the bathroom alone, not have to walk back and forth to walk my daughter on the plane, and not have to chase her all over the airport during transition.

The article also claims three-quarters of respondents would take extra trips to bump up their loyalty status.  I would definitely consider taking extra trips to bump up my status to get free daycare at transitioning airports, and maybe a nanny to watch over the kids and change diapers on the flight. But for now, I wouldn’t trade my husband for any of the loyalty rewards they could offer; especially since I'm taking my 5 year old and a newborn to Japan this summer.

So what do you think, what loyalty rewards matter to you?

Posted by Tomoko Shimizu-Brennan, Tomoko is a data manager at CMB; she welcomed an adorable baby boy on April 3rd. She is very excited about the new direct flight from Boston to Tokyo in April.