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 PROBLEM:
"I Don't Know How to Use Customer Research to Increase Sales."

Also look at: Creating Research Surveys

Using Consumer Research and Focus Groups
to improve Sales
By Gary Witt, Ph.D.

 Research is one of those activities which most businesses want to do, but somehow never get around to doing. Instead, they tend to rely on "gut instinct," customer feedback, and monthly product sales figures. Part of the reluctance to do research is an unstated fear that research is hard to do, hard to understand, and expensive. It's for the "big boys." Of course, research was often one of the things that helped them become big boys.

This article looks at some of the fundamentals of research which every business person should be aware of, then looks at one useful, simple research tool: the focus group. A separate article looks at creating a simple but effective survey and picking the people to take it. (Click HERE.)

Why might consumer research be useful to you? Would you like to know which consumers are most likely to buy your product or service? What criteria they are most likely to use in deciding? What your brand image is in their minds? How they feel about your brand versus your competitors? What price they would be willing to pay? Of course you would. That's the value of research.

Don't shy away from research. If you can run a business, you can do the basic research that will help you understand your buyers and see your product through their eyes. If you can afford professional help, you'll learn more. But with even a little money, you can learn enough to give you valuable ideas about what you're doing wrong, and how to sell more.

TYPES OF RESEARCH: There are two basic types of research: Qualitative and Quantitative.
If you want to understand in depth what your buyers want, like, dislike, fear, and need from your product, product class and industry, you want to do Qualitative research. There are several ways, but the most common is the Focus Group. In the last part of this article you'll find some basic guidelines for doing a Focus Group.

If you want specific, numerical evaluations of your product's features, you want Quantitative research. The most common method is the Survey, which we'll construct next month. A survey uses a set of questions, often with a selection of answers, to learn more about the buyer's attitudes and behaviors. Surveys allow you to collect data from a lot of people and combine it into average scores. For example, if you wonder about people's attitude toward Real Estate agents, your Survey could quickly collect evaluations on a dozen different attributes, like honesty, reliability, courtesy, and so on. The average score could show you where your profession is strong, and where it needs improvement in the minds of your customers.

FIRST STEPS: Like anything else, good planning yields better results. If you want to do research of any kind, here's how you need to proceed:

1. Go someplace quiet where you can think. Take a notepad. Ask yourself, "What are my five biggest problems related to buyers?" It might be poor sales in one line, or poor response to direct mail ads, or not enough store traffic. Then ask yourself for each problem, "What should I know about my buyers (or desired buyers) that would help me figure out what to do?" Your research should have a specific purpose grounded in its value to your business. That way you can judge what is important to know, and what is just "interesting."

2. Call a meeting of all the people who will use the results of your research. Tell them to bring a list of ways in which they could use some good consumer research data. Marketing will have one set of ideas, while sales will have a different set, and long-range planning will have a third set. If you have managers who wear more than one hat, tell them to prepare lists for each type of responsibility they have.

This is a brainstorming meeting. Have someone write down all the ideas on a white board or large pad. Consider your current customers, and those you want to attract. Then as a group, put the ideas into three categories: Must Know; Should Know; and Nice to Know. Be tough. Every idea on the Must Know list should be justified.

3. Compare the Must Know and Should Know list with the one you did, and create two final lists. Turn each idea into a question, like "What do customers think of our self-service drink island?" Review the questions to be sure they cover all the topics you'll need to know about. That list gives you the target you want your research to hit. Knowing the target inside the buyer's mind is the bedrock of Psychological Marketing.

SECONDARY RESEARCH: There is probably some data out there about the topics you're interested in. Looking for it is called secondary research. Usually there are four major categories to look in: (1) Research you've done before. (2) Government publications, like the Statistical Abstract of the U.S., the Annual Survey of Manufacturers, or the Beige Book. (3) Trade and marketing periodicals, like Journal of Marketing, Journal of Consumer Research, or your industry's trade magazines. (4) Commercial Sources. These companies specialize in providing research, such as A.C. Nielsen does on TV ratings, retail sales, and magazine circulation. Other well-known companies include Market Research Corporation, Market Facts, and Simmons Market Research Bureau. There are many others. The Internet is a great place to start searching for secondary research information.

The value of secondary research is that someone might have already found the answers to some of the questions that concern you, or that the information will help you to create better questions.

FOCUS GROUPS: Focus groups are very useful in generating new ideas for product improvements, new products or new ways to use existing products; understanding your buyers' perceptions of your brand and competing brands; testing new concepts, like an advertising approach, packaging, a new distribution channel, a new brand name, and so on.

Focus groups will help you understand a lot about how consumers feel and think. The disadvantage is that the results are usually not quantifiable (you can't turn them into percentages or averages), and they are not generalizable to your entire target consumer population because the sample size is so small. But the depth of ideas and attitudes focus groups uncover make them one of the most popular forms of research.

Focus groups usually consist of 8 to 12 people from your target consumer group. They are selected on the basis of certain shared characteristics (like "smokers" or "over 65," etc.) Size is important because you want the group small enough so everyone has an opportunity to talk, but large enough to give a diversity of perceptions. Try to stay away from members who would naturally dominate the others, like a boss with his/her employees. That reduces spontaneity and increases the number of "safe" ideas. Whenever possible, its preferable that no one in the group knows the others. Members are often paid a nominal fee for their help, and provided with food and drink at the meeting.

The meeting should be in a quiet room with a table and comfortable chairs. Professional focus group researchers use a room with a one-way mirror so the client can watch unnoticed. No outside distractions, like telephone calls, crying children or street noise, should be permitted. Give everybody a name tag and be sure they can all see each other.

Your moderator is important. The moderator exercises a mild, unobtrusive control over the group, guiding the topics, raising questions, keeping the group on track, but never injecting his or her own ideas into the session (including such comments as "great," or "wonderful.")

Some of the most important qualities of a good moderator are that they appear interested in the topic, treat all the guests with respect, have enough knowledge about the topic to explore useful areas of concern, and be a likable person without distracting attributes like bad breath or poor grammar. The most common type of comment the moderator makes is "Could you explain your idea a little more?"

Usually no more than a dozen questions or topics are raised by the moderator during the 90 minute session. The moderator encourages all members to voice their opinion, and to respond to the opinions of others. The session is recorded, with the permission of the group, either on audio or videotape, for further study and analysis.

You can learn a lot just by listening or watching the tape a couple of times. However, keep in mind that the opinions of two or three people aren't necessarily representative of the majority of your target buyers. Think of focus group ideas as springboards for investigation, rather than signposts for change.

There are a number of more sophisticated techniques to use in evaluating the responses. These and a great deal of other useful information can be found in several books on focus group research, including Focus Groups, a Practical Guide for Applied Research by Richard Krueger.

Focus group results often provides good ideas for changes in the product or marketing strategy. These specific ideas can then be pre-tested using quantitative research, such as a Survey.
Click HERE to learn more about constructing an effective research Survey.

(c) Gary Witt, 1998

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