Posts Tagged ‘psychographics’

Calling All Social Business Visionaries

December 6th, 2010

If you are a senior executive who get “social business” we need you to come into the Social Executive Council (LinkedIn Group) as a first stage introduction (with over 20% of the Fortune 100 represented at the senior exec level – it is rapidly becoming the core group for senior execs in this area), then read our blog in depth to see how we fit into the bigger enterprise strategy, and then talk with Judy to see how we can help you own this for your organization and eventually your market. 

The good news/bad news is that we are rapidly becoming overwhelmed with people who could potentially be interested in building a social business plan/organization/etc. that we need a way to filter the early adopters from the people who are just merely interested.

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Social Market Research Will Save Marketing

October 15th, 2010

Even as I write the title, I cringe. As I am a late convert to the value of formalized market research. I still have flashbacks of my market research class in grad school. All I remember is statistics, database, demographics, statistics, blah, blah, blah… all I retained is that mean and medium are somehow different and important. I got lucky in that my immediate neighbor in the first class was an actuary so when they formed teams, he became my best friend.

As I progressed in Sales and Marketing management, I realized the value of asking customers what they really wanted and how they felt. I also realized there are limitations in that process. Not that customers lie, but I can’t always tell you why I do something instinctively. I just do. In asking me to explain, you may or may not get to the heart of “why.” Also, depending on “when” you ask me my opinion will vary greatly.

That is why good market research leverages statistical sampling to make sure the sample size is large enough to represent a target population. We use sampling techniques because the population is too large to cost effectively poll or they are too difficult to get all of the responses.

Shocker Statement: Traditional Market Research has a Fundamental Problem

If you know anything about political polling, they have lots of discussions about the difference between likely voters and registered voters, etc. They also beat each other up about polling techniques; whether it was phone based, did they include cell phones, the average age of the respondent, etc. What they really are trying to do is correct for the impact that the process of polling has on the outcomes. Minor differences can radically shift the results of the poll.

Corporate market research has the same challenges. Not that they don’t account for much of it, the state of the art is pretty sophisticated and gotten much more so with algorithms, etc. What the challenge for corporate marketers is always who constitutes “likely buyers” versus potential buyers. If I poll based on demographics, I can’t really tell who is likely to be a potential buyer. On websites, they spend a lot of money on predictive algorithms and website “cookie crumb trails” to try and predict potential buying behaviors.

But the challenge in primary market research is that it is an approximation of the market. A sampling set if you will. The challenge that I contend is that we sample the wrong sets in market research.

Ok, before I get lynched by a bunch of analytics, let me explain. We have been doing social market research over the last year. We probably surveyed the landscapes of 60+ markets — probably 100+ sub-markets.  Everyone of them is showing a difference in the way buyers are approaching markets versus sellers. Not talking subtleties, but in most cases, the majority missed the mark —buyers are talking over social media at a 10:1 clip versus vendors. AND they are using completely different language. Vendors are focused on the “solution stack” -– features, functionality, benefits. Buyers are focused on pain, experience, exploration, decision support, value, etc.

What it is telling us in aggregate is that vendors are only focusing on a subset of the market; those who understand the industry jargon. The vast majority of buying markets are not being serviced with the right information. I would guess somewhere about 80% of buyers or potential buyers don’t know what they don’t know and therefore cannot perform structured searches or clarify their buying interest to market researchers.

I also think this is why major brands are shifting much of their new product innovation to social media and online communities. P&G has dictated something like 50% of their new product innovation will come from its customer community. Staggering, but also a recognition that the traditional market research approach cannot get to those who don’t self identify as being part of the market.

10 Really Cool Insights from Social Market Research

  1. Disconnect between buyers and sellers in markets
  2. Difference in buyer types leads to different online buying processes
  3. Most buying processes now intersects online and goes non-linear via social media at some point; research, validation, comparison, transaction, etc.
  4. Sellers are still trying to push a linear buying process that they think they can actually influence
  5. Estimated 80% of potential buyers don’t know that they are in the market and are engaging outside of the vendor communities traditional venues.
  6. We can see language differences in different types of buyers and vendors
  7. We are using this analysis to segment and target specific types of potential buyers who would not normally consider themselves as active in the market.
  8. Good social market research allows organizations to identify gaps in their approach to the market, focus on the psychographic buyer behavior, and eliminate the high-cost/low return marketing expenditures that they have had to cling to because they produced critical volumes of sales albeit at higher cost of acquisition.
  9. Customer experiences for good or bad are now bleeding into the non-linear buying processes. Vendors who don’t get control of their poor experiences will experience a different kind of bleeding; profits.
  10. We haven’t even touched the tip of the iceberg as the semantic analytics and market research techniques get updated.

Today Social Market Research is largely a blend of qualitative sampling and quantitative support. Just because you can measure it doesn’t mean you can derive meaningful business impact from it. The qualitative analysis allows us to overcome the challenges with the state of the social media tools. We can sometimes use up to 16 different tools for just one function. It isn’t about clicking a button and “poof” you have your answer to grow market share overnight. Also, having your own community allows you dimensionality of insight versus just polling public social network sites. Add in structured customer data and you have the backbone for some amazing buying behavior analysis. Over the next couple of years, the semi-automated process will mature and give way to more automated, trending, and analytical driven systems that integrated with the current business intelligence systems.

For us today, Social Market Research is the first step in building a social business plan. Not just for marketing, but all of the customer facing touch points and all of the customer support functions. In short, pretty much all of the business. You don’t know what you don’t know.

The challenge is can you figure it out before your competitors do.