Just because we can doesn’t mean we should!

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The attraction of new technology is often beguiling. David Mattin, Head of Trends and Insights at commentators trendwatching.com, has long advocated that the failures of technologies such as Google Glass was because they failed this basic test.

Allowing the technology to dictate what is launched to the world can sometimes yield success, but as the evidence of the high percentage of failures shows, often the hype exceeds the hope.

David Mattin argues that innovation must always think about people first and, more importantly, develop things where the benefit in terms of ease of use outweighs the cost and hassle of using it. Things like “Amazon Dash” seem like a good idea to some people and there may be a niche but widespread use seems unlikely. By contrast, Alexa, which has many multiple uses, will appeal to more of the people more of the time. And that is key.

Mattin recommends that innovators and start-ups should always view technology through the lens of ‘deep human needs and wants’, not through the lens of technological possibility. That is easy to say but somewhat harder to do without conducting market research. But market research has an issue.

Designing research studies for products or mobile phone apps that do not yet exist, may require the need to get respondents to think about doing everyday tasks in new ways to how they do them at the moment. Sometimes that is easy – it is not a big step to tell an electronic assistant to order a pizza versus speaking to someone on the phone – and the benefit in terms of time saving from not having to find the phone, dial the number, wait for the call to be answered, and then negotiate with someone who is capable of totally independent thought and of unknown intellectual competence is clear and tangible!

The question is whether there is a more straightforward way to judge the likely marketplace success of the product or service you are looking to develop. And, of course, there is.

Marketplace success is driven by five key elements – known as the RAAVE drivers.

  • Relevancy – Do I need this?
  • Association – Is this something or a company I would like to be associated with?
  • Accessibility – Is this easy to use and can I afford to use it?
  • Value – Does the benefit outweigh price and hassle involved in using it?
  • Expectation – Will it do what it says on the tin?

If you want to know whether or not your next venture will be a marketplace success then judge it on research that tells you the answers to these five questions – both in absolute terms and relative to the competitors you are up against, both old and new.

If you out-score the competition on these five criteria then you will be likely to have a success on your hands.

Lag behind on one or more of them and you may have a problem.

Success is never guaranteed as the world is dynamic, but knowing your score on these five dimensions will ensure you stack the odds in your favour.

Read more Schezzer’s Blog articles at https://www.linkedin.com/pulse/just-because-we-can-doesnt-mean-should-schezzer-scheherazade/

Analytics and Neuroscience

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It was the computer in the 1960s that changed the way that companies took marketing decisions.  They were able to process masses of quantitative data, which promised greater scientific number-based decision making.  It was enhanced by more and more data on buying habits – transaction data from retailer scanning systems and loyalty cards and the creation of mathematical models based on recorded behaviour, income, geography and anything else that could be tangibly measured.

This reliance on hard data analytics and hard data modelling to analyse and plan the marketing effort was based on the mechanics of the sale rather than on the psychology of why consumers buy.  For most companies, the results that came from all the analytical work on the hard data were disappointing – marketing programmes didn’t quite deliver the expectations that the modelling said they should deliver.

By the 1980s, scientists were beginning to explore the brain and the way it handles information and makes decisions.  Called neuroscience, this, combined with the resurrection of Behavioural Economic theory, not new but becoming fashionable once again, combined to create what is commonly known as ‘behavioural research’ and promoted as the only way to understand and predict consumer buying behaviour.

Of course, none of this is new – what goes around, comes around.  Between the 1930s and the 1960s, it was known as ‘motivational research’.

Classic economic theory works on the principle that we take rational buying decisions by weighing up cost against benefit and making a logical choice based on this.  Of course, this is not what we do at all.  We buy things we don’t need, at arbitrary prices and for silly reasons.

As America moved into the era of plenty, where supply outstripped demand creating competitive battles between brands for a share of the consumer’s wallet, advertising agencies in particular needed better insights into consumer preferences than they were able to get from quantitative data that polling techniques had been supplying since the late 19th century.

Then, in 1938, along came Dr Ernest Dichter.  His development of motivational research and the insights he extracted from this changed advertising, brands and the fortunes of companies such as Proctor & Gamble, Chrysler and General Mills.

Dr Dichter’s principles were based on the theories of Sigmund Freud, formulated over a century ago.  Of course, this meant that many of his insights had strong sexual connotations – not in itself necessarily wrong, but sometimes a bit odd.  He explained that smoking was like sucking on a nipple; a phallic shaped lipstick sells more because it offers a subconscious fellatio; baking is an expression of femininity, pulling a cake from an oven being the equivalent of giving birth; and, perhaps oddest of all, to increase sales of typewriters they should be modelled on the female body so that the keyboard was more concave and receptive.

From 1946 and through the 1950s, his business boomed as companies queued up for his insights and advice, but inevitably, like all charismatic salesmen with implacable self belief, he went too far.  He was hired by Pepsi to advise on their new television campaign.  He told them that must never show Pepsi served with ice, because ice meant death.  Dismissed as bonkers, he was thrown out.

He sank into obscurity, a discarded guru, long before his death in 1991, his motivational research tools and techniques pushed out by the new science of analytics driven by ever cheaper computers and data storage.  But the core problem facing brand owners is that all the data and all the analytics didn’t give them the insight as to why consumers preferred one brand over another.  Human behaviour continued to remain mysterious.

Enter the new discipline of neuroscience, which, (surprise, surprise), came with scientific findings that concluded that it is emotion and not reason that drives purchasing decisions.  The resurrection of ‘Behavioural Economics’ – which is not new, but the old ‘re-branded’ – takes us back to the days of Dr Dichter, but this time with men wearing white lab coats.

But before you get carried away with neuroscience or measuring the pupil dilation response to brand logos, just pause and reflect on what this little piece of history tells us.

Numbers without attitudes give you an incomplete picture; attitudes without numbers are the same.  But having attitudes and numbers combined – that’s how you create actionable insights to help improve your business.

Customer behaviour vital to loyalty intentions

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With retail sales falling by nearly 2% in March, the worst decline in 16 years, Customer Loyalty is obviously under considerable pressure as shoppers increasingly seek out the best bargains.

This is hardly surprising as incomes are not keeping pace with inflation. Even worse, there are components of the household budget which take priority and are facing the worst of the price surges: petrol, utilities and eventually mortgage repayments when interest rates rise once more. This makes the squeeze on real disposable incomes even more severe. The economy may well be technically out of recession and into recovery this year, but not many customers will feel richer, confident or happier.

When the household budget has to cope with inflationary price increases it cannot avoid then it has to find ways of reducing the most discretionary part of their spending to compensate – and it is retailers who are going to bear the brunt of this reduction.

This is why austerity is and will continue to drive changes in customer behaviour. There is switching from premium brands to secondary brands; from brands to private label; from the brand I always buy to whichever is on the best price deal; a switch to ‘necessity’ rather than ‘nice to have’; and ultimately a switching of loyalty from one retailer to another.

The key to understanding and retaining Customer Loyalty is a market research programme that tracks changes in loyalty and therefore enables the business to adjust the tactics of their loyalty programmes – to correct any weaknesses and build on unforeseen opportunities. Traditional ways of doing this kind of research can be expensive and takes time, and with customer sentiment changing so rapidly that by the time you get the results then it might be too late to act. But using either e-mail or web based processes that are both fast and inexpensive, makes the information that they obtain both timely and valuable.

RedRoute has been one of the pioneers of using iPad or Android tablet devices to do this. These are used to survey customers on site during their shopping trips. It’s a very cost effective way of doing this – there’s no need for any dedicated research interviewers and the wireless connectivity of these devices means that data collection is automated and almost instantaneous. This delivers very timely and low cost evaluations of customer behaviour, attitudes and future loyalty intentions. This gives fast feedback on customer loyalty and enables you to refine and improve the effectiveness of the overall customer loyalty programme as it proceeds. For example, one can quickly test and compare the effectiveness of different loyalty tactics to see which one performs best. Delegates to the Customer Loyalty Conference will be able to see how this works on the RedRoute iPads.

The decisions that businesses have to take over this period of austerity will determine how well they will survive and how strong they will be at the end of the journey towards the return of prosperity. The companies that will successfully make this journey will be the ones who have the tools to understand the consequences of the decisions that they take. They are the ones that will make the right decisions.