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Tag: customer insights

  • Ad Agencies Rethink How They Collect Data, Recruit Staff

    Ad Agencies Rethink How They Collect Data, Recruit Staff

    We’ve been using In-Depth or Personal Interview techniques to uncover customer insights and consumer behavior triggers for years with great success, using the outcomes to inform creative executions and boost effectiveness of marketing efforts – the big agencies have some catching up to do . . .

    Trump’s win spurs concerns that ad agencies are out of touch with consumers

    By
    Alexandra Bruell and
    Suzanne Vranica
    Advertisers are grappling with a stark realization: After spending years courting U.S. consumers with aspirational images of upscale urban living, they may have misjudged the yearnings of much of their audience.

    In the wake of Donald Trump’s election as U.S. president with a wave of support from middle American voters, advertisers are reflecting on whether they are out of touch with the same people—rural, economically frustrated, elite-distrusting, anti-globalization voters—who propelled the businessman into the White House. Mr. Trump’s rise has them rethinking the way they collect data about consumers, recruit staff and pitch products.

    A few days after the Nov. 8 election, the chief executive of the ad agency giant McCann Worldgroup summoned top executives to discuss what the company could learn from the surprising outcome. One takeaway for him and his staff was that too much advertising falsely assumes that all U.S. consumers desire to be like coastal elites.

    “Every so often you have to reset what is the aspirational goal the public has with regard to the products we sell,” said Harris Diamond, McCann’s CEO. “So many marketing programs are oriented toward metro elite imagery.” Marketing needs to reflect less of New York and Los Angeles culture, he said, and more of “Des Moines and Scranton.”

    Some marketers, concerned that data isn’t telling them everything they need to know, are considering increasing their use of personal interviews in research. Meanwhile, some ad agencies are looking to hire more people from rural areas as they rethink the popular use of aspirational messaging showcasing a ritzy life on the two metropolitan coasts. One company is also weighing whether to open more local offices around the world, where the people who create ads are closer to the people who see them.

    “This election is a seminal moment for marketers to step back and understand what is in people’s heads and what actually drives consumer choice,” said Joe Tripodi, chief marketing officer of the Subway sandwich chain.

    Even as many ad agencies try to improve their gender and racial diversity, industry executives say they also need to ensure their U.S. employees come from varied socioeconomic and geographic backgrounds.

    A diversity hire “can be a farm girl from Indiana as much as a Cuban immigrant who lives in Pensacola,” said John Boiler, chief executive of the agency 72andSunny, whose clients include General Mills Inc. and Coors Light. The agency plans to expand its university recruitment programs to include rural areas.

    ‘[A diversity hire] can be a farm girl from Indiana as much as a Cuban immigrant who lives in Pensacola.’

    —John Boiler, chief executive of the agency 72andSunny

    Given how polling underestimated Mr. Trump’s support, the election underscores the limitations of “research methodologies that even in the era of big data are subject to human bias,” said Antonio Lucio, the chief marketing officer of HP Inc.

    As a result HP, the personal computer and printer arm of the former Hewlett-Packard Co., is re-evaluating its reliance on research techniques like online polls and seeing if it needs to increase its use of personal interviews and ethnography, which is when researchers try to understand how people live by visiting them in their homes or work environments.

    David Sable, global chief executive of Y&R, a creative agency owned by WPP PLC, said the election is a lesson for marketers and agencies that have become too infatuated with big data. Mr. Sable said that Y&R will “double down” on its eXploring program, which involves spending time with consumers in their own habitats. For example, the agency has in the past done laundry with families in London as part of its research for a packaged-goods company.

    “If you want to understand how a lion hunts you don’t go to the zoo, you go to the jungle,” he said.

    David Droga, creative chairman and founder of Droga5, whose clients include Yum Brands Inc.’s Pizza Hut and J.P. Morgan Chase, said the election validated its immersive approach. The shop this year sent employees to Johnsonville headquarters in Wisconsin to interview many of the sausage company’s employees for an ad campaign. “We really want to make sure we not just understand our demo, but the mind-set of our demo right now,” Mr. Droga said. (Droga5 also did work for Hillary Clinton, including a TV spot that depicts her fighting for children throughout her public life.)

    A scene from Droga5's Johnsonville ad campaign. Droga5 sent employees to Johnsonville headquarters in Wisconsin to interview many of the sausage company’s employees for the campaign.
    A scene from Droga5’s Johnsonville ad campaign. Droga5 sent employees to Johnsonville headquarters in Wisconsin to interview many of the sausage company’s employees for the campaign. Photo: Droga5

    Advertising executives also said the surprising outcome to the election would likely hamper advertising spending next year, as marketers try to figure out what implications the new administration’s decisions will have on businesses.

    “I believe there will be a slowdown” in the first quarter as marketers take a “wait and see” approach to Mr. Trump’s policies, said Maurice Lévy, chief executive officer of Publicis Groupe SA.

    WPP’s GroupM, the largest ad buying firm in the world, had been anticipating U.S. ad spending would grow 3% to $183.9 billion next year. Kelly Clark, global CEO of GroupM, now said he anticipates ad spending growth in the U.S. will likely decline a few percentage points over the next six months. “We do believe that investment decisions will be delayed,” said Mr. Clark.

    If agencies internalize the societal changes the election reflected, the content or tone of advertising could change, some ad executives predicted.

    “The election will have spooked the liberal elite away from high concept, ‘make the world a better place’” advertising to “a more down-to-earth ‘tell me what you will do for me’ approach” said Robert Senior, worldwide chief executive of Saatchi & Saatchi, a creative firm owned by Publicis Groupe.

    Mr. Senior said the change will likely manifest itself in less use of fantastical imagery and escapism and more real world and real people in ads.

    Mr. Tripodi of Subway says marketers are too focused on aggregating people into broader groups and painting them with the same brush. He said global marketers such as Subway should try to do more local marketing and advertising that can better reflect the concerns of specific communities.

    Mr. Diamond of McCann says the ad industry’s move to have regional hubs servicing large patches of the world is now out of sync with movements in many countries—the U.S., U.K., and China, for example—where citizens seem frustrated with aspirational globalism. He said McCann, which has offices in about 90 countries, had been moving toward more regional hubs. It now wants to beef up its local creative teams.

    In a world “demanding local distinctiveness, you have to have creative that reflects that,” Mr. Diamond said.

    Some advertisers weren’t caught off guard. Susan Credle, global creative chief of ad agency FCB, relayed a conversation she had before the election with a marketer who felt that an aspirational message would hurt its business.

    “If we were having that conversation today, it would be an even stronger point,” she said.

    Write to Alexandra Bruell at alexandra.bruell@wsj.com and Suzanne Vranica at suzanne.vranica@wsj.com

  • Market Research Is the Answer to ‘Uberization’ and the Customer Challenges of the 21st Century

    Market Research Is the Answer to ‘Uberization’ and the Customer Challenges of the 21st Century

    Jessica delivers this message better than I could, so I thought I’d pass this along . . . we’ve been explaining this to clients for years, and she nails it!

     

    by Jessica DeVlieger  |

    April 4, 2016

    Customer behaviors around the world are changing. Fast. For businesses, the risk in not keeping up is all too real.

    The companies that really “get” their customers, like Apple and Amazon, are setting the standards, raising the bar high.

    Because of “Uberization“—in broad terms, displacement and marginalization by nontraditional competitors—customers across all industries now have higher expectations.

    As a result, staying relevant to customers is becoming increasingly difficult to achieve in a time when doing so couldn’t be more critical to success.

    Gradually, leaders are recognizing that relevancy demands empathy—to know customers as the real, complex, creative people they are—then instilling that empathy across the entire organization. It’s why, according to a recent IBM C-suite global study, 66% of C-level execs say they plan to focus on customers as individuals rather than segments (up from 54% who said so in 2013).

    Pole vault

     

    But cultivating a shared understanding of customers as individuals is easier said than done, especially for multinationals with millions of customers and dozens of offices scattered across continents. It requires departments to align and pay closer attention to the people they serve. To embrace new perspectives and fresh ways of seeing the world and the business. To then internalize that knowledge and use it to act with intuition and urgency. And, it needs to happen on an ongoing basis—not on a need-to-know basis—to meet customers’ needs as they change, therefore making the business more agile and adaptable.

    The way most businesses are structured today, it’s the market research and insights teams that are positioned to champion the customer-as-individual. Those departments are the official caretakers of consumer truths, and they are the people in the organization closest to customers.

    The question is whether market research departments are empowered enough, and have the right resources for, inspiring leaders and the company culture to change.

    The answer, usually, is no. Most market research departments operate as 20th century customer feedback engines, focused primarily on collecting and disseminating customer information through a well-intentioned series of disparate messages and reports. That approach rarely creates the desired impact. The empathy generated is fleeting, at best; and the drive to action stalls.

    Businesses can’t afford to continue to operate that way. Not when they’re faced with new challenges like “Uberization”; 21st century challenges require 21st century market research.

    The market research department must play a dual role: consultant and marketer, expert in both uncovering opportunities from customer stories and motivating colleagues, with clarity and simplicity, to take action. It will function with as much vigor on engaging stakeholders within the business as it does in collecting customer information from outside of it.

    That change will give Market Research a permanent seat at the C-level table. It’ll be held accountable by leaders to create broad customer empathy that drives growth, complete with defined goals, measurable KPIs, smart strategies, and creative tactics.

    Researchers will need to update their LinkedIn profiles and resumes to match the following four business objectives of the 21st century market research department.

    1. Connect the dots to bring customers to life

    Ask any market researcher today, and she or he will tell you: I don’t need more information, I need help synthesizing what it all means for the business. Finding value in a sea of data from various sources is difficult. And once found, it’s how it’s socialized that actually matters. It needs to be such a powerful and memorable narrative that it inspires decision-makers.

    For example, a retail bank launched an initiative to help their employees understand different types of banking customers more intimately. After collecting data on household income, average number of credit cards, retailers frequented, and other spending and saving behaviors, the insights team brought those customers to life in a fun and creative way. It assembled individual customers’ wallets (based on the bank’s key customer personas), each filled with common items, like a driver’s license, receipts, credit cards, loyalty rewards cards, cash, and family photos. Though the wallets weren’t “real,” they were tangible replicas, just about the realest window one can get into how a customer spends and saves. The wallets were shared among employees so that they could see, feel, and experience exactly who their customers are and how they manage their money.

    1. Create buy-in to help others see and act on the opportunity

    All the insight in the world doesn’t matter if it doesn’t somehow create urgency and willingness to make a meaningful change. And making that change means that everyone feels what the customer feels and understands the opportunity for the business.

    For example, a major retailer had lots of data showing customers’ frustrations with advertised products that were often sold out—or simply not there—by the time customers got to the store. But the data alone wasn’t persuasive enough to initiate action to fix the problems. So the insights team created a documentary-style film about one woman’s daily routine, highlighting the gaps in her experience and why the store’s failures made her life harder. It humanized the customer’s problems, leaders felt her pain immediately, and the company responded with greater urgency to fix them as a result.

    1. Align priorities and departments with a clear and collective agenda

    Facilitating alignment across departments can be complicated when teams are siloed and have their own priorities and perspectives based on their role and department. To create a collective agenda, you must make customers the central rallying point.

    In fact, 63% of CEOs say rallying their organization around the customer is one of their top three investment priorities.

    It makes sense: Customers create focus; centering work on their needs ends debate and swiftly moves solutions into action.

    A great example of this comes from a major pet food and supply retailer. The company realized that pet owners were answering questions about their pets from their pet’s perspective, not the owners’: “Prudence loves her new grain-free wet food!” for instance, or “Rufus is such a calm pup when he’s in the hands of the grooming staff.” That realization led to a game-changing insight: Owners consider their pets as the customer. In-person collaboration between executives at the most senior levels and shoppers helped the company land on a guiding principle that put pets at the center of business, like stocking foods at “pet-level” or pinning the names of employee’s pets to their lapels. Today, it’s a pet-centric lens through which every decision by every employee—from cashiers to the marketing team to the C-level—is made.

    1. Infuse a constant flow of customer empathy that affects company culture

    People become fluent in a new language by immersing themselves in the culture of native speakers—not just by listening to Rosetta Stone on their commute to work. The same is true when trying to build genuine customer empathy among employees. It can’t be a one-off engagement. It needs to be an immersive and ongoing experience that evolves over time, ultimately altering the company culture.

    Take, for example, a well-known consumer electronics company that had enjoyed years of success when led by its product-focused engineers. But, as competition heated up, the company’s growth stagnated. It wasn’t until company leaders made a long-term investment in embedding customers’ voices, experiences, and stories to drive strategy across divisions that the culture truly began to change. Executives and customers now regularly solve problems together in face-to-face sessions. Engineers innovate outside the box thanks to pictures and videos of the creative and unexpected ways customers use the company’s products. The culture has shifted, fueled by one thing: the customer. The business is growing enormously today as a result.

    * * *

    The ability to learn from customers and evolve with them is inextricably linked to a company’s potential for growth. After consultant and marketer, there might be a third hat that the 21st century market researcher wears: teacher.

    It’s the researcher’s job to shape the minds of the business so that everyone knows the rich and diverse perspectives of the customer. It’s the best defense against “Uberization,” and the only sustainable way companies will grow in the 21st century.

  • Do Your Clients Know You, or Just What You’ve Reminded Them Of Recently?

    Do Your Clients Know You, or Just What You’ve Reminded Them Of Recently?

    Service businesses are funny things sometimes. Clients tend to pigeonhole your service firm based on what service you first performed for them. They rarely actually read the literature you leave behind, especially if it’s a referral, and they usually don’t go back and search it when another type of job arises, no matter how closely related to the first. So your first impression, your first engagement and your referrals tend to shape your brand for you in the customer’s mind, unless you steer it, expand it and broaden it on an almost continual basis.

    It’s an easy trap to fall into, especially for smaller firms, who may appear more limited than they are. I’m no exception to this unfortunately, although I try and avoid it if I can. I have one customer who only thinks of me in connection with trade show displays, because that was the first part of a multi-faceted strategy we recommended for them when entering into a new vertical market. Not that she doesn’t KNOW we offer a full range of marketing services, from strategic planning out to campaign execution and executive guidance, it’s just that I don’t reside in that part of her brain and I’m not connected to her other needs in a way that immediately comes to mind when they arise – I have to make a concerted effort to “remind” her that we are a full-service firm, so that we get connected in that way.

    How many of your customers or internal clients only think of you when they need or have a question about a very narrow range of elements, the one you did for them last, or first? It’s something you might want to explore, and you can test it pretty easily: Call them up and ask “Do you know that we also offer . . .” and see what the response is. Call under the auspices of keeping in touch, a good thing regardless, but hunt for that specific piece of data during the conversation. You might be surprised by the result.

    It may seem strange, but that’s just how the brain works – humans learned to survive by recognizing and remembering patterns, and noticing anything that breaks the pattern, like sensing movement in the brush created by a prey animal. Once a pattern is established, ala your firm performing a certain service, that pattern is retained and it’s difficult to change that perception.

    Here’s the fix: broaden your marketing efforts. Don’t go against brand, in fact if you’re a multi-service firm, this will strengthen that tenet of your brand. But highlight a different angle, a different aspect or subgroup of your offerings in a series of marketing launches – it’s like baiting a fishing line with different baits at different parts of the line – you increase the odds of catching something from the same pond. Even if you think you only offer one thing, and one of your brand characteristics is that you do one thing and do it the best of anyone, there are still different angles and facets of that “one thing” that you can use to “bait the hook” with. Try it, see if you don’t get the phone ringing with new business from old clients who “Didn’t know you offered that”.

    Did you find this interesting? Would you like to read more? Subscribe to this blog above – its FREE! Don’t forget to pick up your copy of “The Marketing Doctor’s Survival Notes” 

     

  • Don’t Assume You Know Your Customers

    Don’t Assume You Know Your Customers

    Note: Adam Richardson provides exquisite validation to Granite Partners’ research based marketing approach, in this well thought out blog post from Harvard Business Review. I couldn’t have said it better, so I bring it to you in it’s original form. Enjoy!

    If the recent U.S. election taught us anything, it’s that you have to be careful assuming that others see the world the way you do. It’s very easy for any organization — political, commercial, not-for-profit — to get caught up in its own echo chamber of like-minded believers. After certain blogs, social media outlets, pundits, and talk shows whipped themselves into a self-reinforcing frenzy, many people were stunned by the election outcome. How could so many “experts” have gotten it so wrong?

    Shared enthusiasm and beliefs are valuable assets when pushing for a goal. In a business context, it’s vital that your employees are emotionally invested in your company’s vision. But there need to be checks and balances to make sure that the vision matches external reality, or you could be enthusiastically charging toward a similar shock. As the science fiction author Philip K. Dick once remarked, “Reality is that which, when you stop believing in it, doesn’t go away.”

    Getting an objective view of who you, as an organization, are trying to serve is critical, but it’s easier said than done.

    Most companies are the centers of their own universes. It’s a natural enough impression; after all, the products and services they offer are on their minds 24/7. The trap is in those companies deluding themselves into thinking that they are as important to their customers as they are to themselves. This is almost never the case. This delusion interferes with understanding customers and their needs, and frequently leads companies to talk to customers in ways that seem foreign or confusing.

    Financial services, the area that I work in now, is an example. It is rampant with confusing jargon and terminology, such as compound interest, ETFs, or the now infamous CDO, or collateralized debt obligation. A 2008 AARP study found that 79% of Americans think prescription drug instructions are easier to understand than materials from financial firms.

    But the financial services industry is not alone. Health care, wireless communications, real estate, information technology, and airlines are all major industries that consistently confuse and turn off their customers, leading to mistrust and disloyalty.

    Jargon in communication is just the surface of the problem. People who work in these industries day-to-day become infused with insider knowledge, techniques, and perspectives. After a while they forget their former lack of expertise and start to assume that everyone must also possess their knowledge — customers included.

    Employees are like hostages suffering from Stockholm syndrome — they take on the worldview of their employer and industry, and forget what it’s like to be a “regular” person without this specialized knowledge. Over time, employees start to talk mostly about tangible product features and become distanced from customer needs and benefits. Value propositions become more abstract and lose the naïve freshness of seeing of who customers really are and how they think, behave, and feel. It becomes increasingly difficult to see your company and industry as nonexpert outsiders do.

    How do we fix this? There are many research methods for better understanding customers, and you may be using them already: ethnographic research, focus groups, surveys, in-store intercepts, and so on. It’s also important to encourage employees to use competitors’ products, so they don’t develop tunnel vision. These are good and necessary, but you can have lots of data and still not see what it’s saying.

    There are two things that can stand in the way getting real insight:

    1. Admitting you may be wrong. If the organization isn’t willing to recognize that it’s not connecting with customers, dismisses indications that customers are confused or uninterested as “irrelevant outliers,” or avoids the message by shooting the messenger, then all the research in the world won’t help. Yes, there are times when an organization needs to be visionary and do things that at first most customers don’t get. Salesforce.com’s pioneering role in the nascent area of cloud computing services is an example of a company that was willing to lose some customers early on in pursuit of the bigger market later. But you have to be very confident in the size of the potential opportunity — and have the organizational fortitude — to pull of that big of a bet. Silicon Valley is littered with companies that made similar bets and failed because ultimately their proposed view of reality never came to align with that of their target customers’.

    2. Garbage in, garbage out. If you’re talking to too narrow of a sample (as was the case with many of the conservative pollsters) or framing research questions in ways that subtly pre-bias the answers, you could be inadvertently creating ever-better products for a shrinking audience. Don’t just meet with your best and current customers; get outside the echo chamber by meeting with ex-customers or people who have never been your customers but love your competitors and the upstart disruptors. (Yes, this often stresses out the sales team.) Years ago, when I was at Sun Microsystems, many at the company initially dismissed the cheap servers then being introduced by Dell and Compaq. Our loyal customers at large companies with massive IT budgets weren’t interested in these low quality machines. Not then, anyway. Sun couldn’t bring itself to lower its standards, and as a result, it ceded a huge part of the market to competitors moving up from the PC space.

    Don’t wait for a catastrophe to show you when you’ve become too caught up in your own hype. Make sure you are continuously seeking a more thorough and objective understanding of your customers, harness the fresh perspectives of new employees, and have the humility to recognize that your customers may have needs and lives beyond your company.

    Adam Richardson
    Adam Richardson helps lead customer experience innovation for Financial Engines. He is the author of Innovation X: Why a Company’s Toughest Problems are its Greatest Advantage. Follow him on Twitter at @richardsona.