Change…It’s a Good Thing (as long as you see it coming)

Let’s say you have a small business.  You have a retail shop where you sell baskets from all over the world.  You’d been successfully established for over ten years when you notice that basket sales are down compared to previous years.  Interestingly, a few years back you brought in stuffed bears of every shape and size, including those children can build, because people were always asking for cuddly animals to put into the baskets they purchased.  You even rolled with it and changed your business name to tell the new story.  For a few years, the bears actually outsold the baskets but then they started to lose momentum as well.  You began to think that perhaps your shop had run its course but decided, before throwing in the towel, to poll your customers as they left the store.  An informal poll showed you that the demographics of the shopping population were changing with the growth of more retail shops on your block.  Wisely realizing that customers were the key to your success, you hired a firm to do a few focus groups, surveys, and analysis.

To your amazement, the demographics of your customers and wanna-be customers had changed radically.  You started your business as an out-of-the-way shop in an off-beat environment catering to a particular client base with financial means and large homes.  When the base changed, you were well positioned with the bears to accommodate the newer client with young families.  Noticing the market trend shift again, your consultant revealed that your new customer base was largely tourists brought into the now hugely popular area because of the exponential growth of retail establishments, restaurants and attractions.  When you recognized the character and makeup of your new customer base, you changed your product line and your name to accommodate their wishes.  Business boomed and yours is now the oldest established business in that area, and going strong … but not without your finger always, always on the pulse of your ever-changing customer base.

So, here’s the bottom line to my story (which, by the way is a true story of a small, but very successful business in Georgia):  Sure it’s great to understand the market, get a feel for what your competition is doing and certainly get a handle on where your industry is going in said market, but that’s nothing without a deep understanding of your customers.  Face it, without your customers, well I hate to say it, but…you’re nothing.  Are those words a bit strong for you?  Better to hear the words than deal with a harsh reality because customers weren’t given enough credit for the success of your business. 

Simply put, there’s more than just the text book learning and even the quantifiable ‘facts’ when running a business.  There’s ALWAYS a person behind the business, product, service, concept, etc and without taking the time to understand their needs and wants there’s little need to even bother opening your doors.  Now, do not be alarmed.  All is not lost.  This is where ethnographies and qualitative research come into play.

By understanding the story behind the person you are able to best fit your product line or service into their lives.  YOU CAN GIVE THEM WHAT THEY WANT, NOT WHAT YOU WANT THEM TO WANT!  Again, just to make sure that was understood…by understanding the story behind the person you are able TO BEST FIT your product or service into their lives.  Now how simple is that?

Do you want monkeys?

 Imagine yourself as a contestant in a game show where you can actually choose your prize, then design a plan to capture it.  You are given a limited bankroll to finance the venture and a group of people to whom you must answer.  With each decision you make you must convince them that you are spending your bankroll carefully and wisely. 

Life in the business world is kind of like that, isn’t it?  You have your eye on the goal and you must use every available means to achieve it.  Trouble is, an unlimited budget is a luxury in today’s business climate, so the reasonable goal is to wring every last penny of value out of each precious dollar spent.  Now that sounds like the right thing to do, but sadly, the first impulse is to tighten the purse strings at every portion of the project without taking the long-range view.  The end result is this … you get what you pay for.  Warren Buffet, Bill Gates, Henry Ford, W. Clement Stone and others of their ilk have created their own version of James Goldsmith’s quote, “if you pay peanuts, you get monkeys.”   Although it’s an amusing statement, it’s sobering in a business setting.  Yet, time after time, companies will choose to pay peanuts (or cut corners) and still expect high rewards.    

Here’s an example: 

‘THE’ Company has decided to launch a new product.  However, they are uncertain whether their product will resonate with their customers and prospects.  They interview two research and marketing consultants (Company A and Company B) and hire the one which offers focus groups for less (B), knowing they will need several to cover every possible scenario.  Bear in mind, however, that Company A had guaranteed ‘THE’ Company that the results could be generated from four focus groups.  ‘B’ Company did not.  For the sake of a visual, let’s say that Company A charges $1000 per group to moderate (4 guaranteed groups = $4000).  Company B charges $700.   Oh, what a savings, right?  Only $2,800 with Company B.

Once hired, Company B finds that they need five or six groups to glean the information ‘THE’ Company is looking for = $3500-$4200.  On the surface, it appears that $3500 for 5 or even $4200 for 6 groups can be reported to your overseeing group as more value, as Company B was at $4000 for JUST four groups. 

Let’s dive deeper and see if it is.  Every focus group requires secondary expenses … room and equipment rental, travel expenses for the moderator, time spent by ‘THE’ Company to sit in on groups, group costs – recruiting, incentives, meals, etc., adding up to possibly another $2500+ per group.  Company A – 4 groups $4000 + $10,000 = $14,000.  Company B – 6 groups $4200 + $15,000 = $19,200.  Suddenly the perceived value (not to mention the typically tight timeline) vaporizes into thin air.   It is far better to review the track record of the competing companies, get referrals, and analyze where the true value lies.  A talented moderator gets results and it’s not the letters behind the name, or even all the training courses completed, that generates the value it’s the moderator themselves.  This comes through a mix of experience and personality.  Know who you’re getting and what they bring to the table.  Don’t be afraid to follow up on references, it could, afterall, save you many peanuts in the end.

Bottom line question … do you want monkeys or practical results?

Progress – It’s a process.

Progress and innovation – ordinary expressions loaded with extraordinary potential.  The trick is to bring them back into our everyday business vernacular.

Since the beginning of 2009 many of us have put innovation (hence, progress) on the back burner for the sake of “the bottom line.”  When the pinch came, the first things to go from corporate budgets were advertising, marketing, and research, placing innovation on the endangered list.  Sadly, stagnant companies lose clients and the downward cycle spirals.  So, how do you stop it and restart the wheels of innovation while keeping an eye on the bottom line?

Begin with that project that is small enough to be cost-effective but with enough impact to make a difference.  Remember that project that you were starting right at the end of 2008… the one you pushed to the back burner come 2009?  Pull that out, along with others that have been shelved during the year.  Do a quick gut check, involve your sales force and even ask your customers what they think could make the biggest difference.  Ask questions.  An internal survey to your sales force is a great beginning.  Next consider on-line focus groups and in-facility/home tests. 

Loop in your existing customers with a customer satisfaction survey.  How have they weathered the recession?  How can you help them to meet their bottom line?  Now is a good time to remind your customers that you’re there.  Be the hand up, ready to help.  This investment in empathy will work in your favor when this is all behind us.  Nurtured customers will not forget.  Be the company that cares enough to connect and ask the questions before someone else beats you to it.  And, remember, there are many new ways to do research.  Work with someone who knows these new methodologies and use them to your economical advantage.  Keep in mind that progress takes time but progress is the path that leads to innovation.

Choose to be THAT company which breathes life into innovation and research.  Asking questions indicates that you are competent and will have the ideas to convert answers into solutions.  Remember, when the load feels heavy, it’s really not when broken down into manageable pieces.  Progress is a process … but it needs innovation or it will remain dormant.  None of us can afford that.

2009 – typical year? Slower than usual? What did you do?

If you experienced a slower than usual year, regarding market research conducted or out-sourced, what did you do?

Did you expand your skill-set and if so, what new methodologies did you adopt or what new techniques did you hone? Did you update your offerings for your clients, such as new systems, processes or pricing? Did you coast on the fruits of 2008, and are you now hoping it picks back up in 2010? Did you work outside of the market research field, and if so, are you coming back?

Or, if you are on the other end of market research and you typically out-source, what did you do in order to obtain the answers you needed to meet your internal needs – what were your decisions based upon? Did you utilize more secondary research? Did you learn how to utilize on-line platforms in order to conduct your own research? Did you utilize research conducted in years past in order to determine the best course forward? Did you utilize internal resources in order to conduct your research, and will you continue to lean on them in 2010? Did you simply put product/service launches on the hold until the economy picks up and the purse strings are loosened?

Lastly, all this being said – how do you feel about 2009? Are you satisfied with where you are heading into 2010? Do you feel you successfully met your market research needs in 2009 and do you think you’ll continue the course for 2010? Here’s to a fantastic end of 2009 (as we’re quickly approaching the end of 4th quarter) and a positive view as we lead into 2010!