Category market research

Made in the USA: The ‘Secret Sauce’ Needed for Success?

0 comments By Chad Thiele Filed in Advertising, brand, market research, Package, Packaging, Product, retail Tagged with advertising, brand, market research, package, packaging, product, retail March 11th, 2013 @ 8:00 am

Two years ago, I attended an AMA South Florida event in Miami, Florida. While the speaker was interesting, it was something that an attendee from either Central or South America had mentioned to me that is still stuck in my head.

He had mentioned that people in his city love the United States so much so that, in that city, products that are made in America fly off the store shelves.

This is the kind of insight that I think businesses could use in some way.

The Value of ‘Made in America’

In an article on Inc.com, Eric Schurenberg writes, “Think of the label “Made in America.” What brand images come to mind? Odds are, you’ve conjured up a picture of one of two scenes.”

“First, there’s that rugged, sturdy (if underappreciated), no-frills, American quality,” writes Schurenberg. “It’s the stuff of Chrysler Automotive’s much-praised “Imported from Detroit” ad, and Bruce Springsteen’s “Born in the USA.” If you buy this two-fisted version of “Made in the USA,” you also likely buy American because you’re patriotic. You don’t care if elites would rather buy a BMW.”

“The other Made-in-America vision embraces an artisanal, moral, locavore sensibility,” continues Schurenberg. “Think of Whole Foods, or, in apparel, Brooklyn Industries. In this vision, you buy boutique American goods because they’re holier-than-corporate and show off your elevated taste (not to mention your ability to afford such taste).”

However, if one of these two images comes to mind, Schurenberg thinks you are probably selling “Made in America” short.

As he writes in the article, “The label still has far more international cachet than Americans are likely to give it credit for. Even in the United States, buyers have proven that they’ll pay considerably more for some kinds of American-made goods–simply because they expect them to be a better value.”

In the remainder of the article, Schurenberg makes a great argument for the value of “Made in America” and how the label can bring with it a serious competitive advantage.

A recent Ad Age article written by Lauren Sherman provides information that supports Schurenberg’s viewpoint.

In the article, Sherman writes, “Not since the 1970’s has “Made in America” been such a hot way to market your product.”

Sherman points out that, “In a September survey of more than 1,000 Americans by the Boston Consulting Group, more than 80% said they preferred U.S.-made goods, and that they would pay more for said goods. The same questions were asked of 1,000 Chinese consumers: 47% prefer Made in America.”

However, Sherman also cautions brands that “Made in America” only goes so far. She says that it often comes down to quality vs. a deal. As she states, “When American-made goods deliver both, it works.”

Final Thoughts

In some geographic markets, the fact that a product is made in America might be more important than you think.

Therefore, brands might want to highlight the fact that their products are made in America—even when they are selling them to consumers abroad.

In some cases, it might be as simple as making the “Made in USA” label larger so that it can be conspicuously displayed for all to see.

However, businesses need to keep in mind that other areas of the world don’t share that love of our country or hold American-made products in such high regard. In those parts of the world, the fact that the product is made in America probably shouldn’t be highlighted as clearly, if at all.

The key is to do the research to find out whether or not the fact that the product is made in America has a positive or negative effect on purchase decisions among potential customers in a given geographic market and then test to see if different marketing techniques or product designs increase sales.

Photo credit: kenny_lex on Flickr.

Chad Thiele

Marketing analyst and strategist, freelance writer, content curator, applied sociologist, and a proud UW-Madison alumnus. My goal is to help businesses achieve their marketing objectives and business goals while gaining additional experience in the exciting world of digital marketing. I'm currently looking for my next career challenge. Please feel free to contact me anytime at: chadjthiele@gmail.com.

The Geography of Marketing: The Global Marketplace

0 comments By Chad Thiele Filed in Advertising, brand, branding, business, JWT, market research, target marketing, technology, trends Tagged with advertising, brand, branding, business, JWT, market research, target marketing, technology, trends March 3rd, 2013 @ 3:00 pm

As technology advances, it is becoming easier for people to connect with other people around the globe.

Rapid advancements in technology are also opening up new markets to businesses that wouldn’t have even dreamed of selling their products and services internationally just a few years ago.

Although international marketing is not my area of expertise, I believe that it is going to become more important for businesses of all sizes in the very near future. With this in mind, I have begun to do some research on the topic.

In the early stages of the process, three things are already becoming clear. 1) The quality of the product or service is becoming more important as businesses compete with other businesses that are located anywhere on the planet. 2) Marketing campaigns need to be tailored to appeal to individual markets and cultural differences need to be recognized. 3) It is becoming increasingly more important for businesses to do the research to identify what the previous two items on my list actually mean to the business and its potential customers (i.e., how do individual markets define quality and what factors influence how effective a marketing campaign will be when it is used to target potential customers living in other parts of the world.)

Globalization Does Not Imply Homogenization

In an article in the September 15, 2010 issue of the American Marketing Association’s Marketing News, Nigel Hollis, Executive Vice President and Chief Global Analyst at Millward Brown Inc., states, “Culture—the history, beliefs, customs, habits and values of a group of people—determines the ways in which we respond to the world around us, including the brands we buy. Local culture helps establish our values and priorities. It determines our taste for food, aesthetic preferences and communication.”

“Increasingly, however, people everywhere are exposed to foreign cultures through commerce, travel and media,” Hollis continues. “But just how strong is the influence of this global culture when compared to the local cultures in which we are born and raised? While the global culture grows increasingly prominent, my research suggests that the influence of local culture still is very important to brand success.”

Hollis goes on to point out that for brands with global aspirations, the influence of local culture can present significant problems. The combination of product formulations, positioning and communications strategy that made the brand successful in one part of the world may need to be adjusted to build a connection with consumers in new markets. Of these, Hollis feels that communication is probably the most susceptible to the influence of culture.

He also warns that the days of big brands gaining huge market share just by introducing their products and services to new markets are over.

According to Hollis, “It used to be that multinationals could launch a brand into a developing economy conﬁdent that their product would be better and more desirable than the local competition. Increasingly, this expectation is unwarranted. With product superiority no longer guaranteed, brands must compete for hearts as well as minds—and to win someone’s heart, you must engage him on his own terms and in his own language. Foreign brands increasingly will need to blend into local cultures if they are to become successful.”

He also points out that the Internet may, in fact, strengthen the connection that consumers have to their local culture.

“People in countries as diverse as China, Turkey and Brazil evince a strong desire to maintain their local culture,” writes Hollis. “In the future, they may celebrate their own cultural identities by choosing local foods, goods and entertainment over Western alternatives. And far from promoting a global village, the Internet actually may be promoting hundreds of local ones. The success of local Internet brands such as search engine Baidu in China and social network Mixi in Japan—as well as the growing trend toward local language blogging—suggests that far from undermining local culture, the Internet instead may be empowering it.”

The Middle East & North Africa Region

A recent report that was released by JWT MENA, titled “JWT MENA: 8 Trends for 2013,” provides insights about the Middle East and North Africa (MENA) region. Interestingly, the report appears to verify that Nigel Hollis was indeed correct, at least for this particular part of the world.

According to the JWT report, “‘Arabification’ is definitely back. Whereas in the past, Arabs have looked to the West for inspiration, today, the region in entirety is looking inwards, supporting entrepreneurialism and its own national best interest. Rather than wallow in negativity, Millennials are optimistically looking forward and up, with a resilience and resourcefulness in addressing adversity. Consumer Confidence is up +6 points in KSA and +5 points in Egypt vs. 2011, shaping the ME of tomorrow, which will be pioneered by the dawn of ‘great brands from the Middle East’ as opposed to ‘great Middle Eastern brands’, towards self-sustainable individuals and economies.”

The report goes on to point out that about nine in 10 MENA adults agree with the statement, “I prefer products from my country over Western products if they are of better quality,” and a similar percentage agree with the statement, “I prefer products from my country over Western products if they are ‘unique.’” Furthermore, about three quarters of MENA adults agree with the statement, “I prefer products from my country over Western products if they are cheaper.”

The report concludes that, “At the end of the day, people are not just buying national brands, they’re buying a great brand and that’s the most important thing.”

If your business is marketing its products or services to consumers living in the Middle East or North Africa, I’d suggest reading this report. It provides great insights about the Middle East and North Africa, including interesting case studies from brands that have been successful in this region.

Final Thoughts

It is my belief that advancements in technology, including the increased reliance on the Internet, will make International marketing even more important in the near future.

However, while the Internet gives businesses the opportunity to sell their products and services to markets that they wouldn’t have even dreamed of just a few years ago, just introducing a product or service to a new market is not enough.

In order to be successful, brands may need to adjust everything from the communications strategy to the product itself, in order to appeal to consumers in other parts of the world.

As Nigel Hollis states at the end of his article in the AMA’s Marketing News, “Successful global brands will embrace the diversity of individuals, communities and cultures around the world, rather than seeking to impose one-size-fits-all templates irrespective of local needs and desires.”

Photo credits: stevecadman and Staeiou on Flickr.

Chad Thiele

The Geography of Marketing: Staying Connected

2 comments By Chad Thiele Filed in app, apps, business, market research, mobile, podcast, podcasts, retail, technology, trends Tagged with app, apps, business, market research, mobile, podcast, podcasts, retail, technology, trends February 25th, 2013 @ 3:00 pm

The number of people who own smartphones worldwide continues to rise. Therefore, mobile marketing is becoming more important for businesses around the globe.

While the technology that is used in mobile devices has improved markedly in recent years, there are still issues that marketers need to be aware of that can influence the overall effectiveness of their mobile marketing campaigns.

In episode #436 of UNTETHER.tv, Rob Woodbridge interviewed Jasmeet Sethi, Regional Head of Consumer Insights for Ericsson ConsumerLab in India.

In a blog post introducing the episode, Woodbridge explains that Sethi believes the greatest challenge he faces is understanding the user experience for consumers in emerging markets.

“Forget your perceptions of UI/UX if you are thinking of swipes or “pull to refresh” or tap and hold, user experience to Jasmeet means something altogether more fundamental,” writes Woodbridge. “We take for granted the almost pervasive access to high speed wireless data we have at our fingertips but, as you know, in certain parts of emerging countries that doesn’t exist. This is a critical first step in understanding how to build for these markets – if your app or mobile service requires an always-on connection to the stream, it will not work in much of India. This, and many other basic usability requirements, could do irreparable damage to great brands and limit success in these huge markets.”

Back in the United States of America

While having limited access to an always-on data connection and slow download speeds are definitely going to be problems in emerging markets, these issues are also problems for marketers here in the United States. Therefore, the lessons that Woodbridge and Sethi are trying to teach marketers around the world are also valuable to those marketers who are trying to reach U.S. consumers.

According to a report that was released last year by the Pew Research Center’s Internet & American Life Project, 77% of adult mobile Internet users in the United States said that they experience “slow download speeds that prevent things from loading as quickly as you would like them to” at least occasionally. In fact, nearly half (46%) of adult U.S. mobile Internet users reported that they experience this problem at least once a week. (Note: Data from this study was also reported in an article written by Amy Gahran on CNN.com in August of 2012.)

An even simpler way to illustrate this problem is to go to the maps that show the 3G and 4G coverage areas for any mobile network operator in the United States.

According the current coverage map for Verizon Wireless, Verizon 4G LTE is available in 480 cities and covers 87% of the U.S. population. However, there are still many areas of the country that still don’t have access to Verizon’s 4G network. In fact, there are major areas on the map where 3G coverage isn’t available. While these areas aren’t places where many people live, they might be places where people travel to. Either way, they are locations where mobile marketing might not be the best option at this point in time.

It should be noted that there are many places around the country, including in the metro areas of Atlanta and Minneapolis/St. Paul, where I have experienced regular data connection problems when I used my 3G smartphone. This includes outdoor spaces, as well as in malls and major retail stores.

In episode 6 of the Digital Dive Podcast, co-hosts Emily Binder and Melanie Touchstone talk about connection issues that they encountered in the metro Atlanta area when vendors used their mobile devices to accept mobile payments with apps like Square or LevelUp. In episode 7, they arrive at the conclusion that the problem is fixed when vendors are connected to a 4G network. Therefore, 4G might be the solution that marketers and entrepreneurs are looking for.

However, keep in mind, that although 4G LTE is available in most urban areas, not everyone has upgraded to a 4G-enabled mobile device.

Therefore, if your mobile marketing campaign requires an always-on data connection, it is highly recommended that you test to make sure that consumers can connect using various types of mobile devices in the geographical areas where the campaign will be running, and definitely test to make sure that they can connect using a 3G network. In fact, it wouldn’t be a bad idea to test at different times of the day using different mobile devices before implementing your mobile marketing campaign. Then, continue to test the data connection availability and download speeds from time to time while the mobile marketing campaign is running.

Final Thoughts

As Woodbridge and Sethi point out in the post introducing episode #436 of UNTETHER.tv, data connection issues and slow download speeds can limit the success of mobile marketing campaigns and possibly cause irreparable damage to great brands.

Although they were talking about marketing to consumers in India and other emerging markets, similar issues are still problems in many parts of the United States.

While having a 4G connection might solve many of these problems, 4G is not available everywhere. And, even in places where it is available, many consumers won’t be able to access it because they haven’t upgraded to a 4G-enabled mobile device.

Therefore, before your business implements a mobile marketing campaign that requires an always-on data connection, it would be a good idea to test the data connection availability and download speeds in the geographical areas where the campaign will be running using a variety of mobile devices during different times of the day. And, definitely make sure that consumers can connect using a mobile device on a 3G network. Furthermore, it wouldn’t be a bad idea to test the data connection availability and download speeds from time to time while the mobile marketing campaign is running.

Finally, if your business plans to offer mobile payment options using Square, LevelUp or some other similar service, it is probably a good idea to make sure that your business is connected to a 4G network. It is also a good idea to test to make sure that everything is running smoothly before you use the service to process transactions during peak sales hours.

Photo credits: LGEPR and ETC@USC on Flickr.

Chad Thiele

The Geography of Marketing: Media Consumption Habits

0 comments By Chad Thiele Filed in market research, mobile, target marketing, technology, trends Tagged with market research, mobile, target marketing, technology, trends February 18th, 2013 @ 8:00 am

The location and the size of the city that people live in tends to influence what sources they turn to for local news and information. This is something that marketers need to be aware of when deciding how best to reach their target audience.

In a blog post that I wrote last year, I pointed out that use of the latest advancements in technology tends to vary based on the location and the size of the community that consumers live in. At the time, my analysis was based on knowledge that I had obtained by traveling and living in various communities.

Since then, a report was published that verified many of my observations. (I want to thank Jason Konopinski for pointing out this study in a recent blog post that he wrote.)

The study was conducted in January 2011 by the Pew Research Center’s Project for Excellence in Journalism and Internet & American Life Project, in partnership with the Knight Foundation. The study explains that while most U.S. adults keep track of what is happening in their local communities, the local news ecosystem is complex.

According to the authors of report, “The results indicate that from large urban areas to rural communities, Americans often report similarly high levels of interest in news in general, in local news and information, and in national and international news. Moreover, similar percentages of adults report following the specific local topics asked about, regardless of the type of community in which they live.”

“Still, community differences do emerge in the number and variety of local news sources used, as well as the degree of “local news participation” and mobile news consumption,” the authors of the study continue. “Many of the differences in local news consumption emerging from these data reflect the varying demographic composition of different community types in the U.S.”

Important Differences Based on Location and Community Size

The report highlights some of the differences in local news consumption habits based on location and community size. Here are some of the findings reported in the study:

Urban consumers obtain local news and information from a wide range of sources, including Internet searches, Twitter, blogs and the websites of local TV stations and newspapers. They also are more likely to obtain news via their mobile devices than consumers in small cities/towns or rural areas.

Suburban consumers tend to rely on local radio for news and information more than consumers in urban, small town/city, and rural areas. (The authors of the report say that this is possibly a result of relatively longer commute times.) These consumers are also the most likely to use a mobile device to obtain local news and information.

Consumers living in small towns/cities tend to rely on tradition media sources such as television and newspapers for local news and information. In fact, the study found that when compared to consumers living in communities of different sizes, consumers living in small towns/cities are the most likely to worry about what would happen if their local newspaper no longer existed. It is also important to note that these consumers are less likely to use the Internet and/or email or have a cell phone than consumers in larger communities.

Rural consumers use the fewest sources of media to obtain local news and information (average 3.3 local news sources per week, tied with small town/city consumers.) They are also the most likely to only rely on traditional news sources. Therefore, it is not surprising that they are the least likely to obtain local news and information via a mobile device, when compared to consumers living in larger communities.

Some of these variations can be explained by the demographics of the consumers living in each type of community. However, as the study points out, some consumers may not obtain local news and information via the specific media sources because it is just not an option for them.

Final Thoughts

The study that was released by the Pew Research Center’s Project for Excellence in Journalism and Internet & American Life Project, in partnership with the Knight Foundation, is an excellent resource for marketers.

As I pointed out in my blog post last year, use of different technological advancements, including social networking sites, tends to vary based on the size and location of the community that consumers live in.

As the Pew Research Center’s report points out, the size and location of the community also plays a role in whether or not consumers rely on a wide range of media sources for local news and information.

This data again points to the fact that marketers need to make adjustments in their marketing campaigns in order to reach their customers and prospects where they are, not where the business thinks they should be.

In the end, because media consumption habits are different based on the location and the size of the community, specific marketing campaigns that work in one place might not be as effective in a different part of the country.

Photo credits: ChrisYunker and Gerry Dincher on Flickr.

Chad Thiele

A Look at the Aging of America From a Retail Perspective

0 comments By Chad Thiele Filed in Advertising, app, case study, market research, mobile, Package, Packaging, retail, shopping, target marketing, technology, trends Tagged with advertising, app, case study, market research, mobile, package, packaging, retail, shopping, target marketing, technology, trends January 31st, 2013 @ 3:00 pm

Andy Rooney once said, “It’s paradoxical that the idea of living a long life appeals to everyone, but the idea of getting old doesn’t appeal to anyone.”

This could be partially due to the fact that either through design or disregard, the products and services that brands offer tend to cater to younger consumers.

However, as times goes on, older consumers are going to be harder and harder to ignore.

As the baby boomers reach retirement age, the number of older consumers continues to grow. (It is worth noting that there will be more older consumers in the near future because there were higher birth rates from 1946 to 1964 and because older consumers who reach the age of 65 are projected to live longer lives in the future.)

While brands do intentionally target different consumers when they advertise their products or services, there are also some decisions that brands are making that may unintentionally exclude older consumers from making a purchase.

If You Can Read This You’re Too Young

In his book, “Why We Buy: The Science of Shopping—Updated and Revised for the Internet, the Global Consumer, and Beyond,” (affiliate link) Paco Underhill explains how retail will be transformed in the near future as a result of the aging of the population of the United States. In fact, he devotes a whole chapter to this topic.

According to Underhill, by 2025, we are going to need a whole new world when it comes to retail.

“What’s wrong with this world? For starters, all the words are too damn small,” says Underhill. “See this sentence? How could you? Too damn small. How about the morning paper? Forget it. Too damn small. The directions on your jar of organic herbal laxative? Too. Damn. Small. And you’re not even going to try squinting. (It causes wrinkles.) If you can’t read it, by gum, you just won’t buy it. And if you don’t buy organic herbal laxative, nobody will. And if nobody buys it… well, you see where this is going.”

“Human eyes begin to falter at about age forty, and even healthy ones are usually impaired by their sixties,” Underhill continues. “With age, three main ocular events take place: The lens becomes more rigid and the muscles holding it weaken, meaning you can’t focus on small type; the cornea yellows, which changes how you perceive color; and less light reaches your retina, meaning the world looks a little dimmer than it once did. The issue of visual acuity, already a major one in the marketplace, will become even more critical—not just in some far-off future, but from this moment on.”

Is he making too big of a deal about the eyesight of older consumers? You can decide that for yourself, but first you might want to read some of the examples that Underhill provides as evidence.

“One of our fast-food clients realized that diners over fifty-five were their fastest-growing demographic, despite the fact that the menu boards used type that was almost impossible for older people to see well,” reports Underhill. “The company redesigned the menus using large photos of the food, and even though it meant listing fewer items, sales rose.”

Underhill also points out that, “The main market today for drugstores is older people, and that dependence will only increase. Certainly, of all the words we are required to read in the course of our lives, few are more important than the labels, directions and warnings on drugs, both prescription and over the counter. For instance, we have found that 91 percent of all skin care customers buy only after they’ve read the front label of the box, bottle or jar. Forty-two percent of buyers also read the back of the package. Clearly, reading is crucial to selling skin care and other health and beauty items.”

It is also interesting to note that the type on products that are frequently used by senior citizens (e.g., aspirin, a host of other common analgesics, cold capsules and vitamins) is often smaller than the type on products that are targeted to teenagers.

Can the Problem Be Fixed?

This sounds like an easy enough problem to fix. Just make the type bigger and the problem is solved, right? Not so fast.

You see, part of the problem is that many consumers rely on information in order to make purchase decisions. Therefore, brands need to provide a sufficient amount of information on their packages.

However, on a small box or bottle, there is a limited amount of real estate. Therefore, the choice is to either make the package bigger, provide less information or make the type smaller. It appears that many brands are choosing the third option—to the dismay of older consumers.

In the book, Underhill offers some possible suggestions that might help fix the problem, including package redesigns, better signage in retail stores, increased use of graphics on the labels, and tech solutions including sending additional information to our mobile devices.

In the end, he suggests the correct solution might be a combination of these and other possible fixes.

Final Thoughts

As Paco Underhill points out in his book, the aging of the population of consumers in the United States is going to provide numerous challenges to brands and retailers in the very near future. (These challenges include issues that I haven’t mentioned in this post.)

However, as with any challenge that is presented to the business world, they also provide an opportunity for businesses to profit by stepping up and finding ways to meet the needs of this important demographic.

As Paco Underhill sums it up, “Older shoppers are more important than ever, if only because there are more of them, and they have a lot of money to spend and time to spend it. Their presence will transform how products are sold in the twenty-first century.”

With this in mind, the question is: Is your business ready?

Photo credits: nicubunu.photo and bartsz on Flickr.

Chad Thiele

A Lesson Worth Remembering: Correlation Doesn’t Imply Causation

0 comments By Chad Thiele Filed in app, business, market research, retail, shopping, technology Tagged with app, business, market research, retail, shopping, technology January 21st, 2013 @ 8:00 am

Most marketers were taught that correlation doesn’t necessarily equal causation in their introduction to statistics courses. However, I think that this is a lesson that we all forget from time to time.

I must confess, I have ignored this lesson in the past.

In a blog post that I wrote about shopkick in July of 2011, I cited an article that was posted on xconomy.com in order to explain how shopkick benefits retailers.

One of the arguments that was made in the post could have been challenged by pointing out that correlation doesn’t imply causation. (However, as I will explain, even with its faults, I believe that the argument that was made does have merit.)

The Example—an Excerpt From My Blog Post

With the current economic downturn, anything that can bring consumers into their stores is a blessing for most retailers.

According to the article, “Shopkick Uses the Sound of Rewards to Bring Smartphone Owners into Bricks-and-Mortar Stores,” on xconomy.com, shopkick’s CEO, Cyriac Roeding, says that retail stores will do almost anything to get people into their stores because conversion rates at bricks-and-mortar stores are very high.

Roeding says that about 20 percent of shoppers end up buying something when they visit bricks-and-mortar clothing stores. The conversion rate at bricks-and-mortar grocery stores is even higher; he says that about 95 percent of shoppers who visit bricks-and-mortar grocery stores make a purchase. In comparison, he says that the conversion rates for most e-commerce sites range from between 0.5 percent to 3 percent.

Therefore, it’s not surprising that retailers would welcome any technology that can help get consumers away from their computers and into their stores. That’s where shopkick can help.

The Point: There is a Correlation, But…

Roeding’s stats are extremely convincing. However, let’s look at the facts again.

He states that about 20 percent of shoppers end up buying something when they visit bricks-and-mortar clothing stores, and 95 percent of shoppers who visit bricks-and-mortar grocery stores make a purchase. Furthermore, these numbers are much higher than the conversion rates for most e-commerce sites.

The correlation between going to a bricks-and-mortar store and making a purchase is undeniable. Therefore, all we have to do is get people to visit bricks-and-mortar stores more often and we will continue to get conversion rates similar to those that Roeding cited, right? Not necessarily.

You see, it is most likely the case that people often visit bricks-and-mortar stores when they are ready to make an actual purchase—this is particularly true of grocery stores. (How many people do you know who go window shopping at a grocery store?)

Therefore, the purchase is more than likely driven by some other cause (i.e., the need for an item, extra disposable income, a gift card, etc.) And, the fact that they go to the bricks-and-mortar store and make a purchase are both often a result of these outside factors.

Therefore, I’d speculate that the conversion rates among people who go to bricks-and-mortar stores as a direct result of the shopkick app are going to be somewhat lower than the current conversion rates cited above.

Supporting Evidence From the Local Mall

In his book, “Call of the Mall: The Geography of Shopping by the Author of Why We Buy,” (affiliate link) Paco Underhill points out that mall owners have tried to increase the time that people spend in malls by offering diversions that have nothing to do with shopping (e.g., food courts, movie theatres, bars and nightclubs, amusement parks, arcades, etc.)

As Underhill points out, “It’s been proven that the more time someone spends in a mall, the more stores they visit and the more things they buy. Again, there’s an inescapable logic to that formula. Every mall owner in the world knows all this. It’s just that they respond differently to it. Some like the idea of putting in a big, glitzy, raucous entertainment sector. It’s the expensive way to go, but it’s easy, too—you just install it and turn on the lights.”

“But the connection between such amusements and increased spending isn’t ironclad,” Underhill continues a little later on in the book. “People may now come to the mall without intending to buy a single thing. In a recent study, slightly more than half of what people did in malls was unrelated to actual shopping—eating, movies, games, hanging out, socializing, and so on. Those who said the primary reason they came to the mall was “to have fun” spent less money than those who said they came to visit a department store—to shop. The survey also found that the overall perceived entertainment value of a mall is unrelated to the amount of time people devote to shopping or the number of items they buy. So shoppers can be exceedingly fond of their mall and still not spend much money or time in stores. It’s a risk.”

The Counterpoint

I used this example to make a point that correlation doesn’t imply causation.

In this case, just because you get more people to visit your bricks-and-mortar stores because they are using the shopkick app doesn’t necessarily mean that the increased traffic is going to result in the same conversion rates that are now being recorded.

On the other hand, you probably will have some increases in sales.

If people are visiting bricks-and-mortar stores for reasons other than shopping (in this case to use the shopkick app) and have a pleasurable experience when they do, they will become comfortable with the store and will more than likely feel an affinity to it. Therefore, the next time they do need an item that the store sells, there is a good chance that they will think of that store and will shop there instead of visiting a competitor’s store. (In fact, they might choose to visit the store to make the purchase, because it will give them another chance to use the shopkick app.)

Furthermore, while the conversion rates among consumers who visit bricks-and-mortar stores to use the shopkick app might not be as high as they are among consumers who go to bricks-and-mortar stores to shop, there still is a chance that the visit will result in an impulse buy of some sort. In comparison, what is the chance that a person will make an impulse buy if they don’t go into a bricks-and-mortar store at all? Zippo, nada, zilch. (That is, unless they visit the store online. However, as already mentioned, online conversion rates aren’t very high.)

Final Thoughts

I think that, every once in a while, we all forget that correlation doesn’t imply causation.

In reality, I think it is easier to overlook this fact when we want the causal relationship to be true.

However, the facts remain the facts.

While ignoring the fact that correlation doesn’t imply causation isn’t a cardinal sin, it could end up having a negative effect on your business’s bottom line if you make important business decisions based on relationships that don’t necessarily exist.

Photo credit: Kurt Magoon on Flickr.

Chad Thiele

Seven Things on My Radar for 2013

0 comments By Chad Thiele Filed in Advertising, business, JWT, market research, mobile, public relations, retail, shopping, social media, target marketing, technology, trends Tagged with advertising, business, JWT, market research, mobile, public relations, retail, shopping, social media, target marketing, technology, trends January 4th, 2013 @ 8:00 am

Question: 2013 will be the year of what?

That is the question that many people are currently asking themselves.

In November, iMedia Communications published a blog post that featured 16 business leaders making predictions as to what they think 2013 will be best known for.

In the post, Mark Cuban, an American business magnate and owner of the NBA’s Dallas Mavericks, predicted that 2013 will be the year of entrepreneurship. Ian Wolfman, CMO at MEplusYou, predicted that 2013 will be the year of purpose (i.e., brands will do more meaningful things in the world and more advertising dollars will be spent for social good in an effort to earn the trust of consumers.) Furthermore, Alfredo Gangotena, CMO at MasterCard, focused on the changing economic conditions around the world, including new opportunities for business growth in Africa in 2013.

Other experts predicted that we will finally get mobile right in 2013, video will explode, we will be able to achieve better targeting for in-marketing consumers, and that there will be more consolidation and easier technology, among other things.

If that list wasn’t enough to inspire your imagination, I’d suggest checking out the “100 Things to Watch in 2013” list published by JWT Intelligence. This yearly list has some amazing predictions for 2013.

Some of the Things That I Will Be Watching in 2013

I don’t have access to the same information that the business leaders that I mentioned earlier in this post have. Therefore, I am not going to make a prediction as to what I think 2013 will be best known for.

While I can’t say what 2013 will be best known for, I can provide a list of some of the things that I plan to study and monitor in the next 12 months. That list includes:

1) Rapid Advancements in Technology

We all know how fast technology has changed the world that we live in, in just the past decade. Think about what the world will be like next year, then think about the remarkable changes in technology that we will witness in the next 10, 20, or 30 years. In order to stay ahead of the curve, I think that it is important for businesses to pay attention to what futurists like Raymond Kurzweil predict the world will be like, and make sure that they have the products and services that will meet consumers’ demands when the time comes.

Therefore, it is not surprising that Google recently hired Kurzweil to be the Director of Engineering. Sure, the real reason for the hire is because Kurzweil has decades of machine learning experience, but there are other reasons for having a brilliant futurist on staff (i.e., making sure the competition doesn’t have the same level of access to all the knowledge that he has in that head of his.)

There are other reasons to be thinking about the future of technology from a business standpoint. For further insight, look at number 11, 20, 27, 43, 52, 65, and 70 on the JWT Intelligence “100 Things to Watch in 2013” list.

2) Mobile (User Experience and Marketing)

According to comScore, “123.3 million people in the U.S. owned smartphones (53 percent mobile market penetration) during the three months ending in November 2012, up 6 percent since August.” (This doesn’t include the increase that we will most likely see after the numbers are in after the holiday gift-giving season. Also, keep in mind, this number doesn’t include tablet computer usage.)

Therefore, it is not surprising that many experts predict that mobile will play an increasing role in consumers’ purchase decisions in the future. Therefore, it would be extremely ignorant to ignore this important technology.

From a business standpoint, it will not only be important to monitor how consumers are using their mobile devices in their day-to-day lives, but it will also be important that consumers can easily find the brand’s products or services wherever they are looking, including when they are using their smartphones or tablet computers. And, when they do find the brand’s products or services online, it will be equally important that the information that they find is user friendly and optimized for the mobile device that they are using.

3) Mobile Payments

Mobile devices will not only change the way that consumers find and do research on products or services, they will also play an increasing role in how consumers actually purchase these products and services. In fact, according to a post on the Intuit GoPayment Blog, a recent Jupiter Research study estimated that, by 2017, one out of every 25 retail transactions worldwide will be completed with a mobile device.

Therefore, it is important that businesses start getting comfortable with this technology now, while the technology is still new and they have the luxury of time to experiment and make adjustments, as necessary. If businesses wait until a majority of their customers become comfortable with the technology, they might end up losing sales to competitors that have taken the time to experiment and perfect the transaction process.

4) Mobile-Influenced Merchandising

As an increasing number of people use mobile devices to gather information as they shop in brick-and-mortar stores, it is inevitably going to change the way that consumers interact with products in the real world. Retailers are going to want to do everything that they can to prevent what some experts call “showrooming.” Finding ways to get consumers to buy from the current store that they are in is going to become a top priority. Among other things, this might lead to more price-match guarantees to increase sales. There is also a possibility that consumers’ shopping behaviors will be altered in ways that we haven’t even thought of as a result of consumers having a mobile device in their hand while they shop. It is for this reason that I will be watching merchandising trends in 2013.

5) Privacy Issues

Changes in all sorts of technology, from Facebook to facial recognition technology, will have consumers worrying whether or not their personally identifiable information (PII) is getting into the wrong hands. In this environment, even the perception of a privacy issue can have a huge impact on whether or not consumers trust the brand, which can ultimately have an effect on the bottom line.

6) The Evolution of Marketing and Public Relations

It is important that businesses monitor changes in the marketing and public relations world. Each new technology that is introduced brings with it new challenges. Therefore, it is important to understand what is working for other companies and adapt that into your marketing plan, if possible. It is also important to try new things, test, and make changes when necessary. However, as Mark Schaefer points out in a recent blog post, one of the best ways to cope with the changes that marketers are facing today is to view technological change through the lens of marketing fundamentals. That way you can more easily weed out the stuff that most likely won’t work. In other words, a solid understanding of the fundamentals of marketing and public relations will still be the foundation for success.

7) Emerging Markets

Alfredo Gangotena’s comment in the post that I mentioned earlier really got me thinking about the possibilities that are available in emerging markets. Therefore, I plan to add this to my to-do list of topics to study in 2013.

Conclusion

These are just some of the things that I will be watching in 2013.

It is important to note that a change in technology could have a huge impact on all the other things mentioned on my list.

So now that you have my list, my question to you is: what is on your radar in 2013?

Photo credit: Official U.S. Navy Imagery on Flickr.

Chad Thiele

Good or Bad, Customer Feedback Is a Gift

0 comments By Chad Thiele Filed in Advertising, market research, social media, word of mouth advertising, word-of-mouth marketing Tagged with advertising, market research, social media, word of mouth advertising, word-of-mouth marketing October 30th, 2012 @ 8:00 am

Some products or services fail because they fix a problem that too few people need fixed.

Others fail even though there is a demand for a product or service to fix a problem, it’s just that the company didn’t create the right product or service to fix it.

I think from the title of the post, you can see where I am going with this.

But, before I get into it further, let’s get a short history lesson from 3M.

The History of Scotch Brand Tape

According to the book, “Symbols of America: A Lavish Celebration of America’s Best Loved Trademarks and the Products They Symbolize, Their History, Folklore, and Enduring Mystique,” (affiliate link) by Hal Morgan, “Pure serendipity led the Minnesota Mining and Manufacturing Company, more commonly known as 3M, to the name Scotch Brand for its tapes. In 1925 the fad for two-toned automobiles created a demand for masking tape coated with a thin strip of adhesive on each edge. When the tape failed to stick properly, a disgruntled auto-body painter told his 3M salesman to take the tape back to his “Scotch” bosses and tell them to put the adhesive all over the surface of the tape. The slur stuck, the company took the painter’s advice, and 3M has been marketing tapes under that name with the familiar tartan trim ever since.”

Just to verify the validity of the story, I double-checked with Wikipedia.

While some of the details are slightly different, the key element of the story remains. That is, a customer was not happy with the product and let the company know about it instead of just changing suppliers without an explanation.

By taking the time to let 3M know how the product was not meeting his needs and offering a solution, the customer gave 3M the information needed to improve the product.

And, by actually listening to the needs of the customer, 3M not only made a product that satisfied the needs of one customer, it helped meet the needs of many of its customer and, in the process, launched one of the most successful brands of tape in history.

Customer Complaints Are Gifts

If the example that I just gave hasn’t convinced you of the value of listening to the feedback that customers give you, I don’t know what will.

But, for those of you who do need some additional convincing, I’d suggest reading a recent blog post by Adam Toporek on customersthatstick.com, titled “What Are Customers Complaints? They’re Gifts.”

In the post, Toporek outlines some of the concepts that are introduced in a book by Janelle Barlow and Claus Moller, titled, “A Complaint Is a Gift: Recovering Customer Loyalty When Things Go Wrong.” (affiliate link)

The blog post suggests that businesses need to change the way that they think about customer complaints. Instead of thinking of them as an annoyance or an indication of failure, businesses need to think of customer complaints as a way to identify customers’ needs that have not yet been met and as opportunities to turn dissatisfied customers into satisfied ones, and possibly create brand advocates in the process.

As Toporek points out, “The most important point about complaints is that they are an opportunity. Complaints are gifts because they are not silence. Silent attrition, when customers leave but never say a word to the company, is a huge issue in many businesses. According to Andrea J. Ayers of Convergys, companies, as an average across industries, lose 12% to silent attrition. In the credit card industry, the number is 43%!”

Customer complaints are gifts, indeed!

Customer Feedback on the Internet

As the 3M example shows, customers have been giving companies advice about how to make a better product for many years. In fact, they may have been doing so since the beginning of time for all I know.

However, in the past, it was very easy for the message to get lost before the right person at the company received it.

Just think about what would have happened if the customer who had complained about 3M’s tape told a person who did not care enough to relay the message to a person who could do something about it. If that had happened, 3M would have left a lot of money on the table and might not have become the company it is today.

Luckily, it is now much easier for the customer to get his or her suggestion into the hands of the right person by posting a complaint on the Internet. Or, to state it a different way, it is now easier for the decision makers in a company to get access to the suggestion.

Also, keep in mind, not all feedback is bad. If a company is doing a great job of meeting the needs of its customers, there is a chance that they will let others know about that, too.

Positive feedback in the form of reviews on review sites is one of the best types of advertising that a company can get. This is even more important given the fact that review sites tend to rank well on search engine results pages.

This is another reason to pay attention to the feedback that your company receives, good or bad.

Final Thoughts

No matter how much a company likes its own product or service, customers will only buy it if it fills a need better than the competition’s product or service.

Therefore, the feedback that a business receives from its customers might be more valuable than one might think.

When the feedback is good it acts as an advertisement for the company.

On the other hand, customer feedback can also tell a company that they have not yet met their customers’ needs.

This gives them the opportunity to make changes to the product or service that might benefit many of their customers, and in the process, increase sales.

It is for this reason I can confidently say that, whether good or bad, customer feedback is definitely a gift.

Photo credit: globochem3x1minus1 on Flickr.

Chad Thiele

The Lesson That Marketers Can Learn From the 1948 Presidential Election

0 comments By Chad Thiele Filed in case study, market research Tagged with case study, market research September 15th, 2012 @ 8:00 am

“Dewey Defeats Truman,” was the headline that the Chicago Tribune printed the night of the 1948 election. As you probably know, that headline was incorrect.

As an article that was published on the Chicago Tribune website explains, “Arguably the most famous headline in the newspaper’s 150-year history, DEWEY DEFEATS TRUMAN is every publisher’s nightmare on every election night. Like most newspapers, the Tribune, which had dismissed him on its editorial page as a “nincompoop,” was lulled into a false sense of security by polls that repeatedly predicted a Dewey victory. Critically important, though, was a printers’ strike, which forced the paper to go to press hours before it normally would. As the first-edition deadline approached, managing editor J. Loy “Pat” Maloney had to make the headline call, although many East Coast tallies were not yet in. Maloney banked on the track record of Arthur Sears Henning, the paper’s longtime Washington correspondent. Henning said Dewey. Henning was rarely wrong. Besides, Life magazine had just carried a big photo of Dewey with the caption ‘The next President of the United States.’”

“The ink was hardly dry on 150,000 copies of the paper when radio bulletins reported that the race was surprisingly close,” the article continues. “The headline was changed to DEMOCRATS MAKE SWEEP OF STATE OFFICES for the second edition. Truman went on to take Illinois and much of the Midwest in this whopping election surprise. Radio comedian Fred Allen noted Truman was the “first president to lose in a Gallup and win in a walk.” The Tribune blamed the pollsters for its mistake.”

The Problems With the 1948 Gallup Poll

Many statisticians and historians have voiced their opinions about what lead to the surprise victory by Truman and what Gallup did wrong.

Some of the issues were a result of the unique nature of voting (e.g., voter turnout, which way the undecided voters ultimately voted, whether or not supporters of a third-party candidate ultimately changed their minds, etc.)

However, many people who have written about the election explain that one of the biggest problems was the fact that Gallup quit polling voters two weeks before the election. The pollsters assumed that the 14% of voters who said that they were undecided at the time the survey data was collected would vote the same way as the respondents who said that they had made a decision about how they would vote in the election. Add in the other issues that I just listed in the last paragraph, and you can see why it is not so surprising the actual election turned out differently than the pollsters predicted.

The last issue with the 1948 Gallup poll is the one that can be generalized to all types of surveys, not just political polling. The issue: quota sampling.

The practice of quota sampling begins by trying to determine what types of respondents might influence the survey results and then setting quotas to ensure that there are enough members from each subgroup represented in the final data set. In theory, this is a not such a bad idea.

However, it is the second part of quota sampling that is at issue. When using quota sampling, interviewers may be told that they need to interview a certain number of people from each subgroup, but they still get to choose who they interview. Because the interviewer gets to choose who to interview, there is going to be a built-in bias because not everyone has a chance of being selected. For example, the interviewer might interview the exact number of people to meet a gender quota, but the people who they choose might over-represent people fitting into another category not accounted for (e.g., geography, fluency in the English language, what type of car they drive, etc.) that can influence the dependent variable being measured.

The Takeaway for Marketers

While brands that are doing surveys for marketing purposes are not going to have their survey results scrutinized in the same way that presidential polls are, the results of their surveys might be as important or even more important than those conducted on election night.

If the brand is making business decisions that can influence the success or failure of a marketing campaign or maybe even the business itself, then it is extremely important to make sure that the survey data is accurate.

Given all the Do-It-Yourself (DIY) research tools out there, it is tempting for brands to conduct their surveys in-house. However, even the most skilled marketer may overlook something that a trained individual who is dedicated to survey research has seen before and therefore wouldn’t repeat again.

When conducting a survey, there are many things that a business needs to consider, including what questions to ask and how to word the questions, when to field the study, how to administer the survey (e.g., via telephone, mail, in-person, Internet, etc.,) who to include in the sample, and how the data is analyzed and presented after the data collection is completed.

Each step is important.

As shown in this post, who to include in the sample is particularly important, as it can have a huge effect on the survey results.

Therefore, brands might want to consider hiring a strategy and research firm to assist them in their survey research efforts. If they don’t, brands might end up on the wrong side of the business of equivalent of what happened to the Chicago Tribune in the 1948 presidential election.

Photo credit: And all that Malarkey on Flickr.

Chad Thiele

Although Social Media Is Great For Qualitative Research, It Shouldn’t Replace Other Methodologies

0 comments By Chad Thiele Filed in BLSG, market research, social media Tagged with BLSG, market research, social media August 8th, 2012 @ 8:00 am

For last few years, there has been a lot of talk about how social media can be used to gain insights into the wants and needs of your customers.

There is no doubt in my mind that there is a lot of great information that can be gained by monitoring and interacting with your customers and potential customers on social networking sites.

In fact, after reading “No Bullshit Social Media: The All-Business, No-Hype Guide to Social Media Marketing,” (affiliate link) by Jason Falls and Erik Deckers, I’m an even bigger fan of using social media for research & development purposes, as the book is filled with many great case studies that highlight some very interesting success stories among major brands.

However, there have also been some extremely intelligent statisticians who have made the claim that the data gleaned from social networking sites like Twitter can be used to make predictions about major events.

I have always been skeptical of this notion based on four main arguments. 1) Not everyone is using Twitter, or any other social networking site, therefore there is a built-in bias. 2) Even if everyone was online, not everyone is going to be talking about the topic. Therefore, only the most vocal people will be heard. 3) There are a lot of false rumors that are spread online that can negatively influence the predictions. 4) In some cases, specific training is required that can influence the outcome of events or there might be information required that the general public is not privy to.

A recent article on TechCrunch gives some evidence that supports my first two points.

While I won’t go into each point in detail in this post, I do want to point out the shortcomings of using social media for making predictions about events when more tried-and-true methodologies, namely surveys with proper wording of questions and representative random samples, are available.

As I mentioned at the beginning of this post, there is a lot of great information that can be gained by monitoring social networking sites and interacting with your customers online.

However, I feel that it is best to think of social media as a huge focus group that should be used in addition to other forms of market research.

Photo credit: 13stock on Flickr.