However, opinions or preferences are not a valid basis for making choices in business. Just as information is an essential component of good decisions, facts are fundamental to strategic marketing planning. Before a plan can get off the ground, it needs facts for fuel.
What should we change about a current product/service, even if it’s successful? What’s our key value proposition? Who’s our target? What will our channel partners like about selling our new product? Which competitors pose the greatest threat? What do we like to do? What are we good at?
To be sure, there’s risk (and trade-off) embedded in every important decision. Fundamentally, marketing should inform these decisions by testing, thinking, gathering and applying insights.
One of marketing’s strengths as a discipline is that it sees the humanity of business. Like people, business tends to cling to biases about itself, its customers, its competitors and the marketplace in general. While truth is often hard to accept, don’t gauge the value of information based on whether it endorses the way you see your company or the way your company sees the world. After all, a primary benefit of good research is being exposed to information that challenges closely held assumptions. However, the information gathered from research must be accurate. No matter how exhaustive the data might be, it is worthless if it is biased or false. I’ll compare different research disciplines, and then share a few DIY research techniques.
Internal vs. External Research
A key principle of research is when gathering data, looking in is every bit as important as looking out. Internal research gathers information and perspectives from employees and executives, primarily through personal interviews.
At FitzMartin, as we consult with clients, we interview management focusing on the long term. We then interview sales, because they’re more familiar with short-term pressures and goals. The interviews may be conducted in person or online, via questionnaire or over the telephone. One caveat: It’s best to offer interviewees anonymity. Everyone wants to share information, provided his or her name isn’t attached. Anonymity can elicit authenticity.
External research looks outside the company at key market sectors. It asks: What type of growth will come from what sectors? What accounts can create more revenue? What new market exists? We also analyze the existing customer base, market trends, customer communications and non-sales constituent groups.
Comparing internal and external research will reveal if your company’s path is in or out of sync with the marketplace. It will show if you’re overlooking opportunities. It will point out—sometimes painfully so—whether you see your business in the same way your customers, prospects and competitors do. Research is a good way to test your position.
Qualitative vs. Quantitative Research
Fundamentally, qualitative research gathers answers in the form of ideas, experiences, words or pictures — things difficult to organize and measure with simple descriptives or statistical modeling. Qualitative insights tend to be more subjective and contextual. It’s hard to generalize with qualitative methods, but they’re also much more flexible. Qualitative research can engage your customers in ways you couldn’t possibly imagine. The best qualitative researchers go beyond simple focus groups to immerse themselves in the consumer’s environment.
Qualitative research has typically been relegated to market research firms and ad agencies because it’s usually best to utilize experts for more sophisticated qualitative research needs. I admire research firms that aren’t shy about getting face-to-face with consumers. They do their best work when both clients and customers are in the room. There’s no one-way mirror involved. They simply foster a dialogue, and they’re very skilled at it.
When hiring outside expertise isn’t an option, you can apply qualitative research techniques yourself on a smaller scale (see below for guidance on conducting internal interviews and focus groups). Even abbreviated approaches offer a lot of value in the sense they bring you closer to the problem. You can directly listen, without the filter of a third party, as consumers or your sales force or channel partners discuss pain points.
Quantitative research methods gathers data in the form of numbers and statistics. It can include demographic data, sales, profitability analyses, survey responses, price points, or even minutes spent talking with a customer service representative at your call center. Your web site, e-commerce system and accounting system contain a wealth of data that can be studied using quantitative methods like customer lifetime value modeling, statistical modeling and data mining.
Precision is the goal. Quantitative methods are powerful because they’re rooted in actual behaviors and outcomes like sales, but there’s a trade-off: Quantitative methods keep researchers at a distance. It’s difficult to go “beyond the numbers” because the researcher is physically separated from the subject. That’s why the best research projects draw on both quantitative and qualitative methods. Our preferred approach is using qualitative methods to further examine the relationships that quantitative research reveals.
The savviest marketers associate quantitative methods with a fancy buzz- word: analytics. (We’ll dive deeper into analytics in Chapter 18.) Analytics can address three key questions: what happened (through reporting of historical data), what is happening right now (real-time reporting of current data with dashboards, scorecards or alerts) and what will happen (with predictive modeling). Surveys that collect numerical data (or responses that can be coded into numbers) are considered quantitative research, including those that analyze buying habits, measure customer loyalty or satisfaction, or capture demographic information.
When analyzing survey data, understand that the summary statistics don’t always tell the whole story. Summaries and averages are a good first step in seeing patterns in the data, but statistical analysis is needed to explore relationships between these patterns. Regression models are commonly used to test ideas or hypotheses. Are customers who shop from you online more profitable than offline customers? Which customers are more likely to churn this month? Does geographic location have an impact on branch sales? What’s the relationship between advertising and sales? Why is a particular promotional campaign moving the needle?
Quantitative research methods can also be used in marketing experiments. B2B firms should always test ideas, product concepts and new approaches in ways that are measurable. While experiments do offer control over the things you’re looking to test, understand you can’t control everything, particularly if you’re testing in the field (at a distribution location, on a sales call or on a service call). Field-testing is highly generalizable because of its natural setting. These experiments are difficult to control and can be costly. The important thing to do is to arrange the conditions so you can infer causality from the results: Identify the effect of a particular variable on what’s important.
Primary vs. Secondary Research
Primary research involves direct conversations with people. When we conduct interviews, we always ask people to share in writing their opinions about business objectives, long-term goals, short-term goals, etc. Even well-run companies have unmade decisions facing them, so we ask for their thoughts on those issues. What is the purpose of the organization, the values and goals? We also look at internal communications, existing accounts that can turn into new revenue and how a company supports an internal dialogue.
Secondary research comes from intermediate sources, and the Internet gives you access to countless sources of information. Google is always a great place to start, but this can also feel like sifting for the perfect grain of sand at Santa Monica Beach, so a detailed search phrase (and not just a single keyword) will yield more relevant results. Secondary research can be helpful, but it is best applied to getting a sense of the broader environment in which you operate and putting internal needs and challenges in a proper perspective. (Read on in this chapter for guidance on online research.)
Primary/Internal/Qualitative Research: Employee Interviews
Asking questions inside your company is an important part of crafting a marketing strategy. Different constituencies within your company will have different points of view, so it’s beneficial to separate and then cross-tabulate the opinions of five groups:
Management: The long view and directional insights. Company leaders are, or should be, considering what the goals are three to five years down the road. If they are driving toward a finish line or an exit plan for the firm, it will impact marketing’s behavior. If they aim to reshape the firm to fit a specific marketplace dynamic, that, too, will direct what marketing should and can do to achieve that end.
Sales: The short view, the pulse of the marketplace, customer-facing issues and competitive insights. Talking to sales always reveals what’s happening today from the point of view of making a sale, today. (This is a good thing. Imagine if sales was only thinking about five years from now. Cash flow would stop.) You compensate sales to think about and act today, so they are best at having a pulse on the day.
Financial officers: The reality check to the “blue sky” marketer and to the naysayer who only sees the rain. I love talking to financial officers. First of all, they are surprised a marketing guy like me is interested in them. This is an unfortunate aspect of the marketing craft. We should always connect to the CFO because 1), money is the scorecard in business, and 2), they are good at objectively measuring business efficacy. They offer insight, typically in a no-nonsense manner, on what marketing is doing for the firm. They have a great handle on what works and doesn’t, what the company’s needs are, what its short-term cash and long-term growth positions look like and what product or service lines are thriving or waning. They understand the business problems we can solve with marketing tools. Who better to engage in the conversation?
Front-line employees: Those who deal directly with customers, directly and every day. These people have unvarnished impressions of the customer’s thoughts, needs and struggles. Yes, the owner of the business and the sales force both state, “I know my customers better than anyone.” This may be true, but the customer knowledge is biased by their own objectives. The front-line employee offers a clearer view of what the customer is really experiencing. They hear the problems, see the flaws in the system, understand what breaks first on a product and hear about the biggest service challenges. They are amazing resources to you, if they are empowered to share the truth they see.
New employees: Candid insights and competitive advantage generators. I find it interesting that most companies have a formal exit interview process, but few, if any, have an intake interview process. It doesn’t need to be formal, but it should happen. When a new employee starts, they have two things they never will have again. First, ideas and process improvements from their old employers. (I like to hire people who know more than I do. I bet you do, too.)
Ask them what can they can teach or offer that you can use. What errors did they see at their old job? What good ideas did they see? How did certain processes work or problems get solved? We can learn so much from new employees. Is this ethical? You’re not asking a new hire to share trade secrets, but of course they bring their experience and insight from previous positions. That’s why you hired them!
The second benefit a new employee offers is fresh perspective. I like to use the first week of a new employee’s job to have them audit the area of expertise they will be working in at FitzMartin. In those first days on the job, they bring an outsider’s point of view and see things the way they are. Ask them to share opportunities and flaws they discover and present what they would like to see done differently.
Even though we are talking about looking inward, you should speak with external advisors, like vendors, lawyers and accountants. They are insiders in a different sort of way. Talk to retired and former employees. You want to look for alignment or incongruity with your vision, ideals or sense of purpose. Both significantly inform your marketing strategy.
Finally, ask your spouse or partner for insight about your organization. I hesitate to suggest asking a spouse for unvarnished thoughts. Typically you get what you give: If you go home and grumble about work, then when you ask for insights, you’ll get back grumbles. In my experience, however, a spouse is wonderful at helping a leader see beyond the person in the mirror. My wife can always tell if I am guiding her to the conclusion I want or to the cold, hard truth that might be difficult to deal with. That’s what we all need— candid, uncolored truth.
Primary/External/Qualitative Research: Focus Groups
Another creative form of interviewing can be found in focus groups, which can gather information or test positioning. You can focus test across geographies— your positioning might be successful in the South, but not the Northeast.
A few pointers on running focus groups yourself (if you choose not to hire an expert research firm):
- Never have less than five or six respondents; the magic number is eight. Any more than eight is when group dynamics occur and people begin to dominate. Invite sixteen, and if six show up then you’re doing pretty well. If ten show up, split them into two groups. Have a moderator ask open-ended questions. Use someone who is a professional listener.
- Keep focus group sessions to no longer than an hour and a half. The beginning of the focus group should be a “soft start.” Spend fifteen minutes or so in casual conversation guided by the moderator. Let the conversation start naturally before steering the dialogue in a particular direction. Schedule a break midway through the session; give them a guided activity that allows them to stand and move about. For example, distribute pads of sticky notes and ask the participants to write one-word answers to a question posed by the moderator. Post the notes on a wall for the group to discuss. Focus groups are an example of the tangible impact of primary research. You are there to see the feedback, immediately in real time. B2B marketing is not a clinical transaction. Focus groups allow you to put a face on this aspect of sales and marketing.
- Tame runaway personalities, if needed. If you are moderating the group, you have to listen to the person talk until heard. Or, you can set parameters right out of the gate: “I’d like to have permission to direct the discussion to another person.” You have to make a concerted effort to guide the dialogue. Everyone has an insight or opinion about something, and would relish the opportunity to be heard.
Secondary/External/Qualitative Research: Online Search
Searching online for insights to guide your business can be like looking for the proverbial needle in a haystack. As you’re using Google to browse the Internet, the more specific your search parameters, the more relevant your results will be. Typing the phrase, “how customers are using widgets in the Northeast” will yield more insight than simply searching “widgets.”
Better than conducting a broad search, focus your online investigation on your industry, market or customer base. Blogs written by experts in your industry are great vehicles for specific and relevant research. Because of the accessibility of social media, it is a quick source of expert or consumer research. The information you glean from social media research can give you more than a glimpse into your customers and broader market dynamics. You can use that information to make big decisions.
Tracking social media dialogue trends can be a daunting task, but specialized services can help you. With software tools like Socialmention.com or Twitter searches and Google’s Keywords, you can identify where these conversations are occurring. Here is a list of social or related tools I like for research or insights:
- Google AdWords (Search and Display networks) • Google Analytics
- DoubleClick by Google, Ad Exchange
- Sitescout (RTB)
- Social Ad Networks (Facebook, Twitter, YouTube, LinkedIn)
- Meltwater (PR and social listening)
- Hootsuite (social management, low-end)
- Sendible (social management, high-end)
- com (digital ads)
Secondary online research can also involve looking at traditional media. When looking at an article, it’s important to consider the context of the publication in terms of bias. An industry journal may have an entirely different perspective on a matter from a mainstream media source like The Wall Street Journal. Moreover, even newspapers are subject to a degree of bias. Because some trade publications might have a propensity to promote products, con- sider the credibility of a periodical when relying on its content.
Most major markets will have a product or company, like Metro Monitor, that can track broadcast television coverage. For a fee, they will put together clippings of hits in traditional media: radio, print or television.
Don’t forget to monitor your competition, as well. LexisNexis provides data services that are expensive but exhaustive. High Beam will allow you to pay by the month for short-term projects. For the media world, companies like Gallup and Nielsen provide consumer information. The following are some of my favorite market data and media tools:
- .gov (the U.S. government provides many great sites for your tax dollar)
- USPTO, U.S. Patent and Trademark Office
- Metro Monitor
- Dun & Bradstreet (D&B)
Academic institutions and research divisions of large companies offer a lot of value. Harvard Business Review provides insight on deep subjects that are academic but practical. Large consulting firms like Deloitte and McKinsey offer free help online. Also, browse the information offered by your industry’s trade association business publications.
Using Research to Inform Planning
It’s clear that quantitative research demands a measure of comfort with numbers (especially statistics). But a quick glance at simple descriptives (averages, maximums, minimums, bar charts, histograms, frequencies) and correlations can tell you a lot about your business, your customers and why they buy from you. Qualitative methods can also unearth much actionable information, even if you don’t possess the sophistication of an outgoing focus group moderator or shrewd political pollster. The only thing you really need to commit is time and effort.
In the course of pursuing research, as with other disciplines, specificity is important. Years ago, I took a weeklong photography seminar/retreat in the Catskills. Our instructor simply told us to go out and shoot. No other direction was given. The resulting photos the group shared were all over the map. There were some fine photos, but nothing of a body of work that gave great insight or clarity. The instructor then then gave us specific instructions. “Go out and shoot shadows.” Later, “Go shoot physics in nature.” Finally, “Find violence.” The result of those parameters? Great photography and great collections of work. When we were all directed to shoot a common subject, we had various points of view.
Using research to answer specificity questions focused on a particular business need—rather than using research for curiosity’s sake (“let’s learn what people think about us”)—can unearth great observations that will form the cornerstone of a successful marketing plan.
Interested in learning how to leverage marketing data to inform your decisions?
A sales and marketing consultancy, founded in 1992, with a focus on B2B and Financial Services clients