Last week I attended the 7th Annual Marketing Directors Conference in Athens, Greece. The topic of the conference was marketing accountability. As I suggested in my previous post, I am not sure we got a definitive answer on how to measure the full contribution of marketing to a business, but we certainly heard some strong opinions about the value of market research.
Professor Malcolm McDonald told us that most market research is useless because there is no such thing as an “average” consumer. Professor Tim Ambler told us that most market research is a waste of time, but that some is crucial. He suggested that neuroscience offers the means to tell fact from fiction when it comes to what’s in people’s heads. Peter Fields, ex-planner and consultant, stated, “Whenever you ask people to think how they feel, you are in dangerous territory.”
In contrast, Elena Mathiou, marketing manager at Athenian Brewery S.A., proposed that research must be an integral part of developing an effective advertising campaign. And David Haigh, CEO of Brand Finance, made it very clear that without measures of brand equity that are linked to future revenue outcomes, you cannot develop an effective brand scorecard. (In that regard, he gave Millward Brown a very nice plug, suggesting that our metrics proved their worth in work he conducted for Vodafone.)
Needless to say, I was not going to let the naysayers go unchallenged. But when I queried the professors about their lack of faith in research, both suggested that they were decrying the use of simplistic surveys and literal interpretation of results. If that was really what they were trying to say, then I must agree with them.
Unless your questions are rooted in a sound understanding of how people make decisions and act on them, the results of your survey are likely to be misleading. The old principle of “garbage in, garbage out” still applies. People do not lie to us deliberately, but neither do they think carefully about the questions we ask, or consider all the possible influences on their behavior.
Take the example of brand consideration. In research conducted to develop BrandDynamics, we asked people what brands they would consider buying. Based on their subsequent purchasing behavior, we observed that people were less likely to follow through on their consideration to purchase small brands than large brands. Why? Because there are other factors, besides consideration, that stop them from doing so. For instance, a small brand is less likely to be available when they shop the category than a brand leader. This is one of the key drivers of Double Jeopardy (see my recent post on this topic) and one that we have built into our models to more accurately predict consumer behavior.
The fact that there is a divide between intention and action was driven home in a presentation by Helena Chari, managing director of TNS ICAP. She highlighted the need to fill in the “marketing blind spot” of what happens at the point of purchase but also reminded us that “data is a journey, not a destination.” During her presentation, she gave a great example of how consumers can overestimate their loyalty. Referring to an unnamed Greek retailer, Helena reported that in surveys, 80 percent of people claimed to shop at that store exclusively. In reality, the percentage was far lower.
But then, this sort of disconnect leads us to the need to interpret research results rather than simply accept them at face value. Does the disconnect between consideration and action highlight an issue with the survey results or a potential opportunity for the retailer? If consumers believe they are doing something that they’re not actually doing, what is stopping them? Do they only associate a particular retailer with a specific type of shopping trip? Or is the retailer simply lacking enough stores to be a convenient place to shop? Has it lost relevance to modern needs and shopping habits? Identify and remove the barriers that prevent people from fulfilling their latent demand, and sales could increase dramatically.
I hope I have done a reasonable job of defending the value of market research. What do you think?
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November 19th, 2009 at 10:48 am
Great piece this week. In my years at BASES, I learned that they (and much of the market research industry) had a good handle on interpretation of scores.
BASES knew how to “adjust for overstatement” - whether among different genders, races, countries, ages (for example - old, poor and women tend to rate higher on scales than young, rich, and men. And we know that Philippines use the higher ends of scales than Germans) and they knew that although 50% of a general population SAID they “definitely would buy” a new product, only 5% ACTUALLY WOULD TRY the product (depending on marketing support). The first thing I learned at BASES was that “people don’t accurately say what they’re going to do, but they CONSISTENTLY overstate their intentions” - allowing a research company to create predictive models that can be used to interpret those scores. Norms help as well. I think Millward Brown does this too - not so much in adjustment factors but in interpretation; who cares what the absolute number of a branding score is in a certain country as long as we can determine the ad’s impact - and that’s the interpretation that I think our clients want.
November 19th, 2009 at 12:37 pm
The comments of the professors remind me the most qouted Akio Morita’s advice:
“Carefully watch how people live, get an intuitive sense as to what they might want and then go with it. Don’t do market research.”
In other words: don’t do bad, inappropiate or obsolete MR, but keep doing research or die in business.