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puzzle-ideas-using-agile-market-research

Folks isolating at home during the COVID-19 pandemic are looking for inexpensive family-friendly ways to entertain themselves. Jigsaw puzzles seem to be fitting that bill, and my family has been doing them since before the shut-down began.

At my house, as we’ve gotten better at doing them, we’ve also gotten more particular about which puzzles to buy. Subject matter, the size and number of the pieces, the construction material, border type and repetitiveness of the patterns all factor into our decision for which puzzles to tackle. We won’t attempt something all in one color palette nor one with rounded edges (that grayscale Moon puzzle circulating social media is a definite NO). But we also don’t want to waste our time on something that is too easy or with juvenile subject matter.

As I’m dreaming of the perfect puzzle, I can easily see how a manufacturer could utilize conjoint to help determine the types of puzzles to design. Puzzle-buying consumers could trade-off puzzle features and price, perhaps even bundling some puzzles together. Suggestions for puzzle subject matter could be generated through a crowdsourcing-style research exercise, such as our Idea Mill™ agile product. The 6 to 36 designs with the most promise could then be winnowed down in an Idea Magnet™ feature prioritization exercise.

So now that I have the entire research program laid out, I just need a jigsaw puzzle company to embrace my research plan and quickly – before I run out of puzzles!

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qualitative-and-quantitative-market-research-difficult-time
 
Every corner of our world, and every type of business, has been impacted by COVID-19.  
 
In market research, we have seen in-person qualitative projects (focus groups, one-on-one interviews, etc.) move to online platforms. Like business meetings, school classrooms, and social events, research conversations have been able to take place virtually thanks to the Internet. There is a proliferation of tools at our disposal to continue our work under new parameters. Research technology providers have shared many success stories under this “new normal,” and I have experienced them first-hand as a moderator.  

 

How the nature of the qualitative research conversations had to adjust 

 
The past few weeks have reminded me that these interactions truly are “conversations” and not just information gathering sessions. While quantitative surveys depend on consistency and objectivity, qualitative engagements require active listening and adaptation to individual participants. Truly hearing someone involves understanding their state-of-mind.  
 
Regardless of the research topic, it feels appropriate to touch on respondents’ experiences – medical and social – before asking for their input. Jumping right into moderator guide content feels like ignoring “the elephant in the room.” 
 

Specific Examples

I have interviewed both physicians and consumers during this crisis and unless a respondent leads the conversation in another direction, I have generally started with an informal check-in to acknowledge the unusual situation we’re all experiencing.
 
 - I’m starting consumer interviews with questions like “First of all, how are you feeling, and is everyone around you okay?” or “Before we get too far, how have you been doing with everything going on in the world right now?”
 
 - With physicians, I might begin with something like “I’m sure things have been very different for you lately. Is there anything you need me to know about what’s happening with you or your practice at this time, before we get into our questions?”
 
Most participants and their families are healthy; many are concerned about jobs, and all are facing the disruptions caused by stay-at-home orders. By addressing the challenges they articulate (“I understand, and I’m hearing that from others as well” or “I am sure that’s difficult, and I appreciate your taking the time to talk with me at such an unusual time”), I can both establish the important context around interviews during this crisis and also then move beyond it to the actual interview content.  
 

People long for interaction

Shelter-in-place requirements surely play a role in maintaining pre-Coronavirus research response rates.  Interview targets have time and flexibility, and an honorarium is as valued as ever, if not more.  But there is another facet for many: isolation is lonely. Participating in a market research discussion is an opportunity to “meet” someone new. Many of us miss that type of interaction, but for someone living alone or without much social engagement, being a respondent has additionally compelling value.  
 
Of course the objective for any moderator is to explore a research question and provide answers to our clients. We are not in this business to become friends with respondents. But in this unprecedented time, we should be sensitive to participants’ mindset and motivations. As always, we are asking them to open a window into their world by answering our questions. For now, we might also be opening a kind of window for them to look out from.
 
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market-research-now-for-post-coronavirus
 
Despite all of our collective struggles and the terrible individual tragedies that are currently happening, we are a resilient country...we will come through this. We will not, however, come through unchanged.
 
Forty years after World War II, my family found over 200 rolls of toilet paper in my grandfather's house. My grandmother said it was because it was in short supply during the war, so every time he went to the store since then he picked up an extra roll or two. This is a classic example of event-driven behavioral change. 
 
 

Why do I think there will be a boom? 

 
This is an event-driven downturn. History suggests that event-driven recoveries are swift. Firms that are not prepared will struggle to keep up with the changed marketplace. How do you prepare for changes like my grandfather went through?
 
It will be important to understand how your customers will be different on the other side of this tragedy.
 
 

Possible COVID-19 triggered market challenges and how research can help

 
1.With the forced trial due to shortages of some goods, is your brand in peril of losing previously loyal customers to competitors? 
 
2.Or conversely, how can your brand retain any newly acquired customers long term? 
 
3.Is there a new channel and/or pricing model for your category given the new digital reality? Can you develop it first? 
 
4.Have priorities when making purchase decisions changed significantly from before the crisis? Will it be long term or temporary? 
 
 
Here are two case studies showing how research can help navigate significant shifts in the market:
 
Clients have chosen TRC Market Research as their custom, consultative research partner to navigate big changes. We have deep expertise solving complicated problems.
 
We can also easily pivot to quick, affordable agile solutions when needed, especially when you need short term tactical feedback during this crisis. While customers will change, you still need to understand their current feelings, even if it provides only temporary tactical guidance.
 
We believe in custom solutions.  We are available to talk through your firm’s specific challenges and give our impartial opinion.
 
 
 
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6 Tips to Help Your Business Survive COVID-19

Posted by on in Coronavirus

6-tips-to-help-your-business-survive--COVID-in-market-research

The current Covid-19 crisis has gotten me thinking about all of the big challenges that we have faced at TRC. These include:
•    A flood that destroyed our Headquarters
•    A fire that destroyed our biggest call center
•    Three recessions of varying depths
•    Transformational industry changes such as the move from phone to web

We’ve persevered for over 30 years through these and other challenges. I thought it might be helpful to share some of what I learned as a result. Hopefully it will help others navigate the very challenging current business environment.

1. Have a plan.

Of course if you don’t have a plan you’ll more or less have to make it up as you go along. But let this be the last crisis that you haven’t planned for. With each challenge our plans have gotten better. You have to think through even unlikely scenarios. For example, you might have had a plan for people to work from home but did you think through whether your systems can handle that kind of load or whether it can be sustained over a long period of time?   

2. Reassure your staff.

My business’ most important asset is our staff. I’m lucky to work with really talented and smart people. Thing is, they are smart enough to recognize trouble and talented enough to have other options on where to work. Providing them with honest communication on where things stand and what you are going to do is critical. Don’t make promises you can’t keep. Your credibility will carry you far. I’m proud to say that more than half my staff has been with us for 20+ years. That doesn’t happen if you lose credibility.

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Business-during-COVID-market-research

I’ve been really impressed with the way our company and our clients have reacted to this crisis. First and foremost, we’re taking precautions to slow the spread. We, as well as our clients, moved quickly on things like suspending travel, replacing in-person qualitative with on-line approaches, and working from home. So far this has kept our staff and our clients free of the disease and allowed us to tirelessly meet our clients’ rapidly evolving needs and deadlines.

I’ve also been impressed by the way our clients have reacted from a business standpoint. With all the scary news and panic buying, it is impressive that our clients have reacted to the crisis seriously and thoughtfully. While it might seem insensitive to talk about business issues in a crisis like this, the reality is that we need a thriving economy for the well-being of everyone.

Every recession is different and this one is perhaps the most different of all. It came on more suddenly and was driven not by economic factors like inflation, commodity prices or financial institutions collapsing. With that said, such downturns are not unprecedented. They are referred to as “event driven” recessions. Unlike normal recessions, the event driven variety tend to be short lived with fast recoveries. According to the Goldman Sachs article the stock market typically takes just 15 months to fully recover from an event driven recession as compared to over 100 months for a structural one (such as the financial crisis of 2008). It is important to understand that while it takes 15 months to get back to where the market was pre-bear market, the recovery starts much earlier than that; it might have already started.

 

SO WHAT SHOULD YOU BE DOING RIGHT NOW? 

Simply put, even as the crisis grows you need to plan for the upsurge to come. In the short term, you need to understand what consumers are thinking and when that thinking will change. Most critically, you need to understand how to connect and the tone your audience will accept from you so you don’t alienate them. Longer term you need to understand how this recession will change behavior. We do so many discrete choice conjoint studies that I tend to think in terms of “features”…so what product and service features will change forever due to behavioral changes? For example, more on-line usage is a no-brainer given the success of this extensive national experiment in remote working.

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feature-prioritization-in-the-officeOn a day when I am packing up my office to work from home as a measure to combat the spread of Covid-19, I am faced with a dilemma that we frequently see in research – the need to differentiate the must-haves from the nice-to-haves. We have no idea how long our work-from-home mandate will last, so I’m planning for the long haul.

Technically, I could take home all of my personal possessions, but it’s a lot. I do not work light. My work office is more crammed with stuff than my home office is: an array of plants, pictures, mementos, décor and awards. Colored highlighters, pens and markers. None are mission-critical to my job, so they’ll stay behind (with the exception of one plant that I can’t bear to part with).

But then I have to make the decision as to which work-related items I must bring with me and which ones will enhance my work-from-home experience but aren’t absolutely required. Do I need my pencil sharpener? Note pads? Date book? Spare mouse? Speakers? What about my folders? All of them? Which ones?

I only have so much room in my vehicle, and only so many trips to the parking lot that I’m willing to make. So I need to determine the nature of each of these items and then decide: if it’s critical it goes in the “take” pile.  If it’s nice to have, then I need to weigh it (literally) against the other nice-to-have items and take some and leave the rest.

In feature prioritization research, we ask participants to tell us what features they would like to see in a product, whether that’s a consumer good, a service, an app, or another type of product. The problem with just asking it that way is that the sky’s the limit – there’s no space issue, no concern for how many trips they have to make to the parking lot. So we place limiters on the exercise, such as having each item add cost, or telling them they can only have 5 features. This helps separate the critical features from the rest of the pack. But it still doesn’t tell us which are the nice-to-haves; items that could provide differentiation from what else is on the market, but aren’t considered table stakes.

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image-technology-in-qualitative-quantitative-research
 
What is the first thing that comes to mind when you hear the word “picture?”  Possibly one of the most widely repeated phrases ever: “a picture is worth a thousand words.”  It’s trite, but it seems to me that the triter a statement, the truer it’s likely to be.  While we can argue the number (and it’s probably not 1,000), we can agree that a single image may communicate far more than a single word.
 
Our world relies on images to convey meaning efficiently. Think of directional street signs, public restroom doors, and Ikea instructions. As technology has matured, we have become a society educated in icons: just look at your cell phone’s home screen and you’ll see universally understood symbols that navigate to your phone, text messages, emails and countless other functional tools. That navigation would be much more difficult if it were based on words.

not-included-in-product-feature-prioritization

Many of our clients ask for our help with feature prioritization as part of the product development cycle. This typically involves using a choice-based research method, such as Max-Diff, our proprietary Bracket™ or Conjoint analysis. We ask consumers to choose which features are the most meaningful to them by pitting the features (or in the case of Conjoint, pitting products containing various combinations of these features) against each other.

In most cases we focus on the development aspect of product development, which generally means adding features or enhancing those that already exist.

But sometimes, it’s not a matter of adding to, but rather subtracting from, what’s already there.

Consider the case of today’s mobile phones. The phone part of my mobile phone is actually pretty low on the list of the features I use – e-mail, text, and Internet access are way more important to me than making or receiving calls. While phone capability is still a must-have, I wonder how long it will be before the “phone” part of “mobile phone” will no longer be table-stakes in smartphone design.

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TRC-is-GRIT-TOP-50-market-research

For the third time, we've been recognized by GRIT as one of the 50 most innovative market research firms in the world. I'm humbled by the endorsement that our clients and peers have given us. It is especially gratifying since we are smaller than most of these firms and don't have the budget that they do for promoting themselves. It got me to thinking about what it is about TRC that overcomes these disadvantages.

Obviously, I could point to innovations we've developed like Bracket™ (a better way of ranking lists of items), Smart Incentives™ (using gamification to drive respondent engagement), advances in conjoint (too long to list here) and our agile suite (rigorous quantitative economical and fast solutions). I know the amount of time we put into developing these and the value they have delivered, but what I hear from clients is that this is only part of what makes TRC special.

Clients consistently tell us that they appreciate working with senior researchers who seek to find the solutions not to a research problem, but to a business problem. When their problem demands a solution such as the ones above, they value it, but they know that our goal is not to dazzle them with the latest tools we have come up with, but rather to do so by getting them the answers they need.

For example, in the last year we have had two clients in very different industries (CPG, Healthcare) come to us with very different problems (sorry I can't share that). To solve both of them we used an old technique (Multi-Dimensional Scaling or MDS). This tool was not designed to solve the problems they had, but by breaking the problem down it was clear to us that it was the right tool to do so. In both cases this solved their business challenge and in one it allowed us to do so at a fraction of the anticipated budget.

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Conjoint-rational-irrational

I’m a big fan of Russ Roberts’ podcast Econtalk. While technically about economics he covers a variety of subjects with his guests and it always gives me something to think about. Recently he welcomed Mary Hirschfeld of Villanova University to talk about her book “Aquinas and the Market”. She challenges some of the fundamentals of modern Economics.

Economists typically see “rational” behavior as one in which a person attempts to maximize their wealth. This leads to the behavioral economic principles that see choices that don’t maximize wealth as “irrational”. For example, an unemployed baseball fan catches a multi-millionaire player’s 500th home run ball. The baseball is likely worth tens of thousands of dollars so if the fan gives it back to the player that is deemed “irrational”.

Dr. Hirschfeld might see this differently. She feels that economics itself is irrational…it fails to recognize the value of non-monetary aspects of a transaction. The fan might think the player actually deserves the ball more than the fan and thus puts value in doing the right thing…returning the ball to its rightful owner.

She repeatedly makes the point that wealth is a means to an end and that focusing on it will not maximize your value as a human being. The rational human thinks about what they really need materially, spiritually and emotionally. They can then make the trade-offs necessary to maximize their overall well-being. They might decide that teaching math in a disadvantaged area, even though they will make less, is a better fit for them than say taking a job on Wall Street.

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Can AI Help in Finding Optimal Pricing?

Posted by on in Pricing Research

Facial-Recognition-Technology pricing-research

Technology is simply brilliant! If I didn’t already embrace that fact, “60 Minutes” reinforced that upon me with their article about Kai-Fu Lee, the “Oracle of Artificial Intelligence” recently.

A company of Mr. Lee’s, Face ++, has deep-learning facial response programs that can tell educators which students are engaged, bored or confused during classroom lectures. Teachers can see at what point during lecture these responses happened, and can follow up with the individuals.

And, modern kitchens can re-order supplies for you, such as your fridge noting the milk or eggs are empty, or when you have used any of the food you purchased. The fridge can automatically contact your supplier and new food arrive before you even knew it was needed.

But, the practical success of technology has its limitations. The teachers can be alerted as to which students were excited/confused by the lecture, but the software does not know “why” it happened, and doesn’t know anything more than the facial response identified. “60 Minutes” notes that “a typical AI system can do one thing well, but can’t adapt what it knows to any other task.”

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Girl-Scout-cookies-TURF-Market-Research-analysis

Every winter one of my co-workers at TRC reminds us that Girl Scout Cookie Season is upon us. GSCS (my abbreviation) is a time to call attention to, celebrate and support the agency dedicated to building “girls of courage, confidence, and character, who make the world a better place.”  All well and good, but when it comes down to it, I just want the cookies.

Their best sellers year after year – Thin Mints, Peanut Butter Patties/Tagalogs and Carael Delites/Samoas – contain chocolate. But I don’t eat chocolate (doctor’s orders). Which means every year I hold my breath until I learn whether my favorite GSC – the Lemonade – is still on the list. And thankfully, it is being offered once again in 2019. I ordered 5 boxes from my co-worker’s daughter.

My no-chocolate policy makes me a “niche” consumer of not only GSCs but of snacks and candies in general. When Hershey came out with Hershey Gold in 2017 (essentially a chocolate bar without the chocolate), I thought they had developed it just for me! I hadn’t eaten a candy bar in years until I tried that one. Now it’s my go-to when I need a little something sweet.

But the problem with niche markets is they are small by definition. I worry that with a limited market, eventually Lemonades and Hershey Gold will be dropped in favor of more popular products.

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customer-lifetime-value-pricing-research

I was reading Russell Perkins blog (Russell and his firm Infocommerce group help clients develop product strategy and new product development) about the use of Customer Lifetime Value (CLV) in Relationship Scoring. He takes note of a new trend to apply CLV across all customer touchpoints.


As researchers the concept of CLV is something we are quite familiar with. It seeks to take into account everything known about a customer (these might include factors ranging from past purchase and payment behavior to things like credit score, income or level of education) in order to determine the value that customer is likely to bring over their lifetime.


Relationship scoring then uses this to determine how the customer should be treated. High value customers are given opportunities from better customer service to special offers. Is this idea really all that new?  


In many respects it is not. Long before advanced algorithms firms recognized that some customers were more valuable than others. For example a good butcher knew how important each customer was and provided perks to them (like setting aside the best cuts of meat).

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how-to-google-pricing-research

I spent a very long time on Amazon and Staples.com recently trying to find a replacement for the little hand-held gadget that I use to clip crossword puzzles out of my newspapers. Typing “Paper cutter” in the search box didn’t get me there. And neither did “Scissors”. I eventually gave up. It wasn’t until I saw it in a good old-fashioned mail-order catalog that I learned it is called a “Gift wrap cutter.” And so I was finally able to go back online and order one.

There are two important lessons here for researchers.  
 
The first is never assume that the way you refer to something is universally understood.
Our clients use a lot of acronyms and short-hand to describe their products, much of which is insider-speak. Testing that terminology with an uninitiated audience helps to overcome this problem. At TRC we have a group called the Questionnaire Review Committee. A member who is not involved in that project reviews the survey instrument prior to fielding. Anything that isn’t understood is flagged for further review
 
The second is that potential customers may not consider themselves as being in the market for a given product, even if they are. 
I didn’t realize I wanted a gift wrap cutter, but it turns out that’s exactly what I needed. A potential research client who isn’t aware of the pricing research options available to him can’t search on “conjoint study providers” to find a suitable research partner.  But he can search on his business objective:  “how to price a product” or “pricing research”. And when that search sends him to us, we can tell him that a conjoint study is an appropriate approach.     
   
The way products and services are presented in the marketplace - their names, labels, tags and descriptions - are important. But if potential customers don’t know of your product, or don’t know how to describe it, we can still reach them based on their need, the job to be done, or a solution to a problem that the product offers. In a research questionnaire, screening for ‘likelihood to purchase X product’ may not capture the same range of potential customers as “likelihood to purchase a product that does Y” would. We need to keep this in mind when deciding who does and doesn’t qualify as a prospective customer in our research questionnaires. And also in marketing our own services.  
 
Tagged in: Pricing Resarch
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trust-is-important-in-purchasing-marijuana-pricing-research

As researchers, we are always interested in understanding consumer choices. We ask respondents to rate importance, rank priorities, and trade-off among complex configuration scenarios. We discuss and make our own trade-offs in terms of design simplicity, project cost and informational objectives. And sometimes we try new approaches.

Anyone who reads the news is aware that there is a whole new consumer product category on the horizon: marijuana is now legal for medical purposes in over 30 states and for recreational use in at least 9 of those states (as of this writing). In partnership with NJ Cannabis Media (www.njcannabismedia.com), we took the opportunity presented by this new consideration dynamic to test a new choice evaluation strategy.

Essentially, we were interested in understanding the roles of 4 factors in adult recreational-use marijuana purchase decisions. A constant sum exercise (allocation of 100 “importance points”) among self-reported current and potential users yielded the following priority distribution:

factors-in-marijuana-purchase-pricing-research-1

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Tagged in: Pricing Research
brandless how-to-measure-brand-equity-with-conjoint
 
I grew up in a family that always seemed to be on the hunt for a good sale. Whether it was clothing, electronics or home goods, we never passed up an opportunity to buy an item for MUCH less than it was two days ago. Now, don’t get the wrong impression, I’m not an extreme couponer by any means. Nor do I sit outside in the cold for hours waiting for the doors to open on Black Friday. But a good sale has my name written all over it—especially clothing. Food and beverages, however, were never really something that we compromised on in terms of price, especially since I grew up in a household that favored organics. We were 100% guilty of buying a product we knew of and trusted rather than a cheaper, lesser known, alternative. I never even thought to buy “Toasted Whole Grain Oats” on the bottom shelf when “Cheerios” was right at eye level and is from a brand I know and trust. And let’s be honest— “Cheerios” just has a better ring to it. 
 

Best Way to Measure Brand Value, Price and Size of a Product 

I always wondered how companies knew exactly what consumers wanted. It never occurred to me that there were survey techniques that could be used to identify needs as well as the best way to price, size and package a product. That is until I started at TRC. I just assumed that companies use the standard question and answer format in order to get the information they desire. Once I began working on surveys, I learned that some companies were already utilizing a conjoint analysis to better understand its consumers’ needs, interests and perceptions. By showing several variations of the same product and only changing minor features across each group (such as the size, cost, packaging and other attributes), these surveys seek to identify the characteristics most appealing to respondents. This, in turn provides companies with the data they can use to assess their brand equity, while also seeing what they can do to modify their product and/or packaging, ultimately to increase sales. But is this enough to retain loyal customers? 
 

What about Off-brand Products? 

It wasn’t until I graduated from college and started working full time that I learned there are stores essentially devoted to off-brand products and are actually thriving. Imagine a store filled not only with “Toasted Whole Grain Oats,” but an off-brand product for everything you use. Yeah, that’s Brandless.com and stores like Aldi. Since realizing that I can fundamentally get the same item for much less, these types of stores have easily become some of my favorite places to shop. They have very minimal, if any, advertising throughout the store, so there is really no pressure when it comes to buying anything. Brandless.com, is just as it sounds. It takes the brand name off of every single item and shows you exactly what you are paying for. And to make it even better, both of these stores have organic products for a fraction of the cost. But, are these types of stores currently being seen as a major threat to well-known companies?
 

Can Optimization Conjoint Research Be Further Optimized? 

Typically, when doing research, we tend to only include brand-name products and services; which makes sense seeing as those are the ones that are most popular and come to your mind first. However, now that there’s this new segment of stores totally devoted to off-brand products, it may be time to break the mold and include generic and “brandless” companies when conducting choice research to measure brand equity. When it comes down to it, it’s only a matter of time before products like “Toasted Whole Grain Oats” begin to take over. How prepared is your company?
 
Tagged in: Brand Equity Conjoint
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statistics-in-market-research-
Last week I was watching the CBS morning news and they had a story about a new study that indicated that your attitude toward gym class as a child shaped your attitude toward exercise your entire life. After watching the story I am convinced that it is another case of causation being confused for correlation.
 
The basics were that kids who reported loving gym class were far more active decades later than kids who reported finding it stressful (“I was always picked last”).  I don’t doubt this correlation. My problem is they spoke of a need to make gym class more inclusive so that all kids grow up to exercise more. In other words, if we can take the stress out of gym for kids who are not good at sports, we can get them to love exercise more. I’m not sure achieving the first part of this is possible and I’m even more certain that even if we do it will not alter future behavior. 
 
I don’t see how you can eliminate the anxiety about gym class without eliminating the physical activity. Sure you could eliminate picking teams and save that humiliation, but once the games begin the kids who are poor at sports will continue to feel anxiety. Even if you simply make it an exercise class, the kids who are out of shape will stand out. Short of one-on-one classes I don’t see how you can fix the problem.
 
Doing so is also not likely to make us more active as adults. The kids who were not good at gym were not good for a variety of reasons but likely they either lacked the natural talent OR more likely the interest in sports that the athletes had. Gym class wasn’t the cause of this! If there had been no gym class I would bet that the kids who didn’t like gym class would still be less active than those that did (those who loved it and/or were good at it). I’d point the “causation arrow” backwards….if you love sports as an adult you probably liked gym class.  
 

Statistical Principles Should Be Explained

It is easy to forget that we have to play a role in explaining statistical principles in our reporting and not just when doing sophisticated work like Discrete Choice Conjoint, Max-Diff, Segmentations and Regressions. Our direct clients likely understand causation and correlation issues, but it is important to know that their internal clients may not. Clear justification for pointing the “causation arrow” must be provided in reports and presentations. Just as important is knocking down attempts to point the arrow based solely on correlation. Otherwise they may walk away with a completely false assumption and not double back with researchers to validate it.  
 

Can You Project Results to the Population? 

This study is also useful in highlighting another common mistake made by internal clients. I was telling an old friend about the study and he said “that can’t be right, you hated gym class and you are far more active now than when we were kids”. Imagine me in a focus group telling my story of how much I hated waiting to be picked for a team and how my memory of that humiliation caused me to exercise more and more as an adult. The internal client stands up and says “That’s how we make people healthier…more humiliation in gym class!” In that case, someone will be in the room to point out that one person’s story is not projectable to the population…but that’s another blog. 
 
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Callmebymyname market-research-conjointIt’s well known that humans respond to personalization. But, as consumers do we respond more when our name is used when we are being sold to, and if so, why? Specifically, are we more likely to react positively to marketing emails that include our name in it? It turns out that we do indeed, as revealed by an interesting new study to be published in the INFORMS journal Marketing Science (authored by Navdeep Sahni, Christian Wheeler (both from Stanford) and Pradeep Chintagunta (Univ of Chicago)).
 
The researchers were specifically interested in understanding whether including a consumer’s name in the subject line of an email had a positive effect – in terms of the number of emails opened as well as subsequent conversion into sales leads. They ran a classic A/B test where everything was controlled to be the same except the inclusion of the consumer’s name in the subject line. This one tweak was sufficient to increase the probability of opening the email by 20%, which then translated to a 31% increase in sales leads and a 17% reduction in those who wanted to unsubscribe
 
What is interesting here is the nature of the manipulated content. It is non-informative about the product and its benefits, yet still has a significant impact on the consumer’s behavior. This would seem to imply that the effect should be generalizable to other products and contexts as well. To test this they ran two more studies where the products differed as well as the relationship of the consumers to the particular companies. The results were consistent with the first study, establishing the generalizability of the results. “Aspects of the advertising message that are seemingly unrelated to the product can affect how consumers process the message, and significantly change outcomes,” said lead author Navdeep Sahni. 
 
There is then the question of why this occurs. While there are competing theories the best one (message elaboration) seems to be that once their attention is drawn using their name, consumers process the information more carefully. This, of course, has a potential downside in that if the message is not relevant to the consumer then the more careful processing could translate into fewer sales leads and more people unsubscribing.   
 
A rather clever 2x2 design was used to tease out this effect – the recipient’s name was included in the body of the email (or not) and a relevant piece of information in the form of a product discount was included in the email (or not). By including the name in the body of the email, the chances of the recipient processing the message increases. By including the discount the relevance of the message itself becomes higher (or not). So if the psychological mechanism at play is message elaboration, then the condition where attention is drawn and a relevant message is presented should provide the most leads – and that is precisely what they find.  
 
Additional (regression) analysis showed how the pieces fit together. Seeing the name increases the likelihood of the message being read and processed, and increases the chance of a positive outcome – if the message is compelling. By itself, the personalization still has an effect but not as much as it otherwise could with a relevant message.      
 
This research does not tell us what happens when more and more marketers start using email personalization. Will consumers get desensitized to the effect? What if the domain is sensitive? Would consumers get offended resulting in a backlash? The answers are not available in this research as the datasets examined here do not fall into these categories. 
 
But, for now, we can say that email marketers could benefit from including the recipient’s name, and can enhance the effect by having a relevant message in the body of the email.     
 
Tagged in: Consumer Behavior
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advanced-market-research-methods-and-candyAt TRC, the most popular spot in the office is our snack shelf. It features an array of sugary, salty and carb heavy treats. The contents vary and are determined by one person (Ruth, who stocks the shelf) with influence from the rest of us (based on past usage and suggestions). Sometimes the shelf has exactly what you’re looking for. Other times, not so much. But what if instead of relying on Ruth’s powers of deduction we were to use research to figure out the optimal shelf configuration?  We’re researchers, after all. 
 

Start out with Incentive Alignment 

We would start out by using our Idea Mill™ product to generate ideas on which snacks people want to have. It uses incentive alignment and gamification to bring out the most creative ideas and provide direction on the favorites. It is likely that this will create too long a list of ideas (the candy shelf is only so large) and while we can toss out ideas that are not feasible, we believe it is best not to toss out ideas just because you personally don’t like them (I’m looking at you Mr. Goodbar). Far better to get more consumer input…this time to narrow the list. 
 

Go beyond Simple Ratings, Employ a Choice Method

We could ask our folks to rate all the suggested snacks and then use that to figure out which ones should make the cut. Ratings might be good enough to eliminate some things (my guess is that despite what people claim, healthy snacks would bite the dust), but among popular snacks (like different types of pretzels) we are not likely to see clear differentiation.
 
A choice method like Max-Diff could help but if the list was long it would require a lot of work on the part of our employee respondents. A method like our proprietary Bracket™  would do the job in a faster and more engaging fashion while still finding clear winners and losers.  
 

Find a Combination of Flavors that Would Please the Most People 

Stocking the winners would therefore make the most sense…but would it please the most people?
Currently the shelf features five types of M&M’s (original, almond, caramel, dark and strawberry nut). If dark chocolate was the least preferred it might get cut. But what if those who like almond, caramel and strawberry nut also liked original, but those who like dark only liked it. For situations like this we can take the results of the Bracket™ (or Max-Diff) and use TURF  to find the combination that would please the most people.   
 

Find the Best Position on the Shelf with Discrete Choice Conjoint 

Of course, another factor is positioning. The shelf is only so large. M&M’s can be dispensed from any size canister (in fact Ruth has one that spins so that it can dispense three types) while Pretzels tend to come in large bins that take up a lot of room. In addition, not all of the snacks cost the same. In an effort to keep our expenses and waistline under control we follow a strict budget. Might I trade off having greater quantity of a lesser snack in exchange for an expensive favorite? 
 
For these kinds of questions a discrete choice conjoint is the answer. We can include a variety of candy types and constraints related to the room they take up as well as cost. Simulations can then optimize how to spend our candy budget.  
Despite our love of research and wide array of tools though, I think in this case they would be overkill (we have a very small population of around 40 employees). So I think we’ll stick with Ruth’s instincts. I never go wanting….
 
Tagged in: Conjoint
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Half life-Market-Research

I heard a great episode of the “You Are Not so Smart” podcast in which Sam Arbesman talked about his book called “The Half Life of Facts”. This book has nothing to do with “truthiness”, “fake news” or any accusation that someone is or is not a liar, but it does provide some context for the world we live in.
 
The book’s title is taken from a scientific term (the time it takes an isotope to lose half of its radioactivity) and the notion that as we learn more, some things we took as “fact” will turn out to be wrong. Newton’s laws, for example, were supplanted by Einstein. The point of the book is not that we shouldn’t bother learning facts, but rather that we should be open to the possibility that they might be wrong. Modern medicine acknowledges that they don’t know everything and that some things they “know” will prove to be false. At the same time, they must treat patients based on what is known or thought to be known.
 
It got me thinking about our business. What is the half-life of facts here? You might be tempted to take comfort in the fact that things like margin of error have not changed. While technically true, this ignores that academia is facing a crisis of confidence over statistically significant findings that don’t hold up in subsequent studies. One cause for this is they run lots of cuts of the data and look for anything statistically significant and then build a rationale for that finding. They ignore that with so many cuts of the data they are likely to find some statistical noise. Don’t we run the same risk with each additional banner we run?
 
There is a known problem with Discrete Choice Conjoint that is often ignored. If you have a product made up of say 8 features each with three levels and 1 with 150 the importance of the feature with 150 levels will be overstated by the model. Still, the model will run, utilities will be calculated and a simulator can be constructed…all of which provide a sense of precision that is not warranted. A researcher who knows about it will guide the client either by changing the design OR by putting the results into their proper perspective. There are many other ways that a complex model like this can produce skewed results and I have little doubt more will be found in the future. 
 
This is not to say that we can’t trust results. Doctors have to treat patients based on what is known today and we must do the same for our clients. The important thing is that we have to acknowledge we have things to learn. As researchers that should be easy for us…
 
Tagged in: Conjoint
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