Taking the Pulse

They say that you are supposed to survey your customers to find out what they think about your organization.   You tell yourself, "My customers ARE NOT shy about sharing their complaints opinions, especially when they perceive something is wrong.  Why should I spend time and resources asking for more?"

They say that it is important to understand your customers' motivations, interests and feelings.  You think to yourself, "I know when they make a purchase.  Why do I care about anything else?"

They say they can tell you within one standard deviation how your customers will respond to your new product or ad campaign or store location.  You wonder to yourself, "What the heck is a standard deviation?"

Market research is often the most neglected tool in the marketing tool box.  There are many reasons for that.  First of all, many business people who understand a lot about marketing don't really understand the processes or the terminology of research.  Second, market research often seems to gum up the works and slow things down.  We just want to get started and research seems to delay things with no tangible payoff.  With research, not only do you have to take time for the survey, but you have to analyze the results and hope that the results don't indicate a change in plans.  It seems easier to avoid it.  Kind of like the dentist.

But ultimately, I think the primary reason that market research is so often skipped is that marketers don't see the value. They have a view of the world that they are comfortable with and they don't want to risk disrupting that view with research.  As Nate Silver says in his book The Signal and the Noise, "[w]e focus on the signals that tell a story about the world as we would like it to be, not how it really is.  We ignore the risks that are hardest to measure, even when they pose the greatest threats to our well-being.  We make approximations and assumptions about the world that are much cruder than we realize."  Well-crafted research can help refine those approximations and assumptions.

Marketing is primarily about building and nurturing relationships.  Those relationships are with customers, staff, suppliers, board members, media, the industry, the public, politicians, the local community, the international community, regulators and the competition.  The degree that you develop relationships with any group on that list depends in part on your industry, in part on your product or service and in part on your marketing strategy.

Regardless of your industry, product or strategy, understanding those whom you seek to market to gives you an advantage.  Understanding their views and feelings about your organization and your product can help you take shortcuts to providing a product or service that exceeds their demands and expectations.  A simple, well crafted survey of your customers, prospective customers, or staff can help you break through the myopia that Nate Silver was writing about and see the world, and your product, as your customer sees it.

Ultimately, you do market research because you need to know what "they" say: about your organization, about your product and about their needs.

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A Numbers Game

It is very easy to feel overwhelmed by the quantity of data that is increasingly available to organizational and marketing leaders.  It is very easy to find yourself wanting to retreat to a analytic fetal position and ignore the data.

But the reality is that we value what we measure. Similarly, we should measure what we value.  There is a nuance between those statements.

The very act of collecting data on something, imparts value on it.  When my wife and I bought a new hybrid car 10 years ago, one of the things that we were fascinated by was the dashboard graphic that showed us our gas mileage at that instant.  We quickly learned how different ways of driving impacted that all important MPG number.  Our fuel efficiency was important to us in concept prior to that, which is why we bought a hybrid.  But with the graphic in front of us it became much less of an ethereal concept and much more of a focus every time we got behind the wheel.

Similarly, a long time ago, when I worked in an advertising agency, we collected the column inches of newspaper articles that appeared about our clients.  Because we were collecting that data and sharing it internally, it was a frequent topic of conversation.  Eventually, we recognized that as an advertising agency, not a PR firm, we really didn't impact our client's newspaper mentions.  We realized that we were collecting newspaper mentions "because we could," not because it was important.  We discontinued it and the topic of column inches was never discussed again.

With so much of our marketing and communication lives happening online, data collection is no longer the issues it once was. There are metrics galore available to any marketer or communicator who wants them.  The challenge for marketers has shifted from trying to figure out what information to gather to trying to figure out what, of the plentiful data available, is useful data.

Whereas before, marketers measured "what they could," now to a greater extent they can analyze what they should.  It seems to me that easily available data still has that allure of importance.  Like with column inches at the ad agency I worked for, marketers need to be careful about chasing after measures such as Facebook likes or Klout scores simply because they are available.

Just as social media options should be a tool in your marketing toolbox, not your marketing strategy, available metrics should help you measure whats important, not a measure of what is important.

The Many P's of Marketing: Prediction

Marketing has gotten more and more nuanced, as new technologies and strategies have opened up many options for marketers.  It is my contention that today, the marketing mix contains much more than the traditional four or five P's that are taught in school.  In this series I am exploring the Many P's of Marketing.

Prediction:  Prediction is something we are supposed to do in marketing.  In some circles, they try to make it sound more scientific and business-like by calling it research, but when you boil it down, we are really talking about predicting.  Predicting which ad will be preferred by males aged 18-34.  Predicting at what price will people stop buying a specific service.  Predicting which new market will be most profitable.  Predicting which tag line will generate the most sales, or clicks, or votes.

Let's face it, research is the forgotten stepchild in many marketing plans.  Most of us got involved in marketing because of a love for writing or designing or photography or sales.  I haven't met too many people who got involved in marketing because of a love of research, or prediction.  I know that I would much rather play with words and pictures than with number and percentages (which I don't care what my math teachers told me, are not the same as numbers!)  While research is included in plans, I bet that it is often given scant attention.

Backing up your gut
But research, or prediction, or as one colleague calls it "educated guestimation", is important.  Nate Silver, possibly the most famous predictor around right now, in his book The Signal and the Noise says "[p]rediction is important because it connects subjective and objective reality."  In other words, prediction, or research, attempts to take some of the risk out of marketing decisions by making data-informed calculations about how people will act in a certain situation with a certain set of circumstances.  Prediction, especially as it is usually used in marketing, uses scientific methods to collect data to help marketers make what are essentially subjective decisions. Or as my Grandpa would say, prediction backs up your gut with numbers!

Research is important because marketers are usually spending large sums of someone's money on seemingly arbitrary decisions.  Most people who are paying for the marketing, usually known as clients or bosses, are more comfortable with some sort of external justification for how their money is being allocated.  Research is also important because no marketer can be an expert in every field or every target market.  Research can help to inform and educate us as to the realities of the marketplace.  Every time I feel that I know the market I am working in and how the customers think and act, quality market research helps to prove to me that I have more to learn.  In other words, market research can help keep our marketing egos in check.

Market research isn't always about predicting what WILL happen.  Sometimes it is about perceiving what IS happening.  A while back, I was managing the roll-out of a new name and identity for a healthcare system.  We had developed a marketing plan and our research showed that we were actually performing above expectations as far as market penetration on the new name and understanding of what healthcare entities were included in the newly formed and named health system.  It also showed that people had no idea how to pronounce the new name.  We had not even thought of this as an issue when we were developing our roll out campaign.  Armed with the perceptions that market research provided us, we were able to add radio to our promotional mix and soon had people pronouncing the health system's name correctly!

Making predictions is easy.  Making accurate predictions is hard!
We all make predictions all of the time.  Taking the highway will be faster.  I won't take an umbrella because its not going to rain until I get back.  The Cubs are going to win the World Series in 2013.  Making predictions is easy.  Making accurate predictions is hard.

The subtitle of Nate Silver's book is "Why so many predictions fail -- but some don't."  Human beings, Silver tells us, are hardwired to look for patterns in the world around us. While that would seem to be an advantage when it comes to evaluating data to support subjective decisions, sometimes it just makes it difficult to sort out the data that is important to pay attention to from that which is, well, just noise.

You see, the problem with research or prediction in the 21st century is not data but filtering.
We have plenty of data.  We have more data bombarding our synapses every day than we could possibly process in a week!  So the challenge then becomes learning to select only the data and information that is relevant and helpful in making accurate predictions.

Just as we make predictions all the time, we also filter all of the time.  One of the ways most people filter is by seeking out the familiar.  If you are politically conservative, you most likely watch Fox News more than someone who is liberal.  If you are from New York, you are much more likely to know last night's Knick's score than you are the score for the Suns.  This is one of the ways we manage the tidal wave of information we are exposed to each day.  As the amount of information we must deal with has increased, so has the size and the intensity of the filters we use.

The problem is good researchers need to learn how to remove the filters when they review research data.  While filters help us get a handle on raw information, they can also hide real research results.  An objective predictor is aware of her biases and prejudices and accounts for them when evaluating data.  A careless predictor looks at data through biased colored lenses and gets a distorted, and most likely inaccurate picture of the world.

Prediction, or research, may be the forgotten stepchild of your marketing plan, or the part of your marketing mix that never gets crossed off of your "to do" list.  If, however, you take the time and make the effort to do some carefully planned and executed research and analysis, it will be a great help to your marketing efforts.  It will provide you with greater insights to your market and a better understanding of how well you are communicating to that market.

At least that's my prediction.

Guts & Numbers

"I notice increasing reluctance on the part of marketing executives to use judgment; they are coming to rely too much on research, and they use it as a drunkard uses a lamp post for support, rather than for illumination."                                                                               David Ogilvy

"I don't need somebody behind a desk to tell me what a marketing survey says is funny. I got 3 million miles and 70,000 tickets sold, telling me that I know how to make people laugh."                                                                                                                                   D. L. Hughley

As long as there have been marketing departments and advertising agencies there has been a tension between practitioners who use research to back up their decisions and those who trust their judgement, or their gut.

The problem with this argument is that there seems to be no middle ground.  Believers of research are most comfortable when every decision is backed up with data.  Proponents of "the gut" will often talk about their superior instincts, their understanding of the target audience and their track record of creative, off-the-beaten path solutions.

It seems to me that there is a place for both decision making strategies in developing creative and effective marketing programs.  The history of advertising is full of stories about the maverick adman who bucked the trend and the research department and had a huge success, based on his instincts.  If we relied only on market research, we probably wouldn't have some of our most popular and revered marketing campaigns.  You see, research is really good at measuring the effectiveness of messages and media that the public is already familiar with.  It is not nearly as effective at capturing the effectiveness of new ideas or new platforms.  You may know the Henry Ford quote "If I asked my customers what they want, they simply would have said a faster horse."  Likewise, 10 years ago, if you questioned people about whether they would like to get information about a company on a free internet site that is primarily social in nature (Facebook) or on access special offers from a retailer on their telephone, I am pretty sure you would have gotten poor responses and a lot of strange looks.

What those stories don't tell us is that the same maverick geniuses have a lot more strike outs than home runs.  Research can help focus a message or a strategy to help it become more effective with target markets.  Research can also help identify shifts in public perception, both in general, say in their understanding and desire for Model Ts, or about a product in particular, say the Edsel.

So it seems to me that "marketing magic" is not in having great instincts or being able to craft surveys that accurately measure customer intentions but in striking the right balance between guts and numbers.  Using data to help make decisions only makes sense but measurement and analysis have never been as good at measuring the new and innovative as they have been at analyzing the tried and true.  I suppose this is why I consider marketing and communications an art as much as it is a science.