April 2015 - c3centricity | c3centricity

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Do Your Shoppers Face a Purchasing Dilemma? How to Give the Right Customer Choice Every Time

I’ve just come back from a week’s course in Spain organised by the European Monroe Institute. The course was on consciousness, a thing all good marketers need to develop, especially when it comes to their customers’ choices.

The reason I am referring to this course, besides the fact that it was led by the brilliant consciousness expert Arkaitz, is because we spoke about a subject that is very relevant for shopper marketing. I did in fact already touch on something similar in last week’s post. I’m speaking about decision making and the difference between Polarity, Duality, Dilemmas and Trilemmas. For clarification, these terms refer to:

Polaritythe state of having or expressing two directly opposite tendencies, opinions, etc

Dualitythe state or quality of being two or in two parts; dichotomy, the division into two parts, kinds, etc

Dilemmaa situation requiring a choice between (equally undesirable) alternatives.

Trilemmaa situation, analogous to a dilemma, in which there are three (almost equally undesirable) alternatives.

Last week I spoke about the Trilemma as it relates to project work; in this post I want to review the different situations in which we oblige our shoppers to make customer choices and how we can make it a lot easier for them.

 

Customer Decision-making

Mark ZHow many decisions do you make in an average day? Tens, hundreds, thous ands, even more? It has been estimated that an adult makes in excess of 30,000 decisions each and every day. (>>Tweet this<<) From what to have for breakfast, to what to wear and the route we take to work, we are constantly making decisions. However, have you noticed that when you need to make a decision, having more choices is not always better? More choice can in fact make decision-making all the more difficult.

In a recent article about Mark Zuckerberg, it was mentioned that he, as did Steve Jobs, wears the same clothes every day. A sort of uniform that enables him to make one less decision that he considers to be less relevant and unimportant to the success of his business. In the post he reveals that he wears the same clothes over and over again, because he wants to limit the time he spends making “frivolous” decisions, so he can concentrate on real work. As he says:

“I really want to clear my life so that I have to make as few decisions as possible about anything except how to best serve this community. I feel like I’m not doing my job if I spend any of my energy on things that are silly or frivolous about my life, so that way I can dedicate all of my energy towards just building the best products and services.”

Retail Decision-making

It has been proven that shoppers can end up leaving a retail outlet or online e-shop without making a purchase, when faced with too much choice. (>>Tweet this<<) This so-called “choice overload” was first mentioned in the book  The Paradox of Choice, by Swarthmore College professor Barry Schwartz.

Schwartz co-authored a study that supported his theory in the context of Web search  and other research has documented choice overload in contexts as wide ranging as gourmet chocolates  and retirement plans.

Choice overload is also one of the major reasons, besides price, for the success of hard discounters. They take away those “frivolous” but hard decisions we usually have to make whilst out shopping, by offering just one or at most two br ands or sizes of each article. We then have to make the choice between buying one of the two on offer, or purchasing neither (a trilemma). If you have the time, you might then go elsewhere to buy what you were looking for, but if the choice is of lesser importance or we are lacking the time, we will accept the limited choice and buy one of the two on offer (a dilemma).

Therefore choice is not always a good thing. So what can you as a marketer do to help the customer make the “right” decision in favour of your br and?

 

Know your Customers

The 4 Ws of customer underst anding

If you’re a regular here, you will know that everything you do should start with the customer and from the customer’s perspective. Underst anding their needs and desires, both stated and unstated, will enable you to better meet them. A satisfied customer is unlikely to spend time in choice and will automatically go for your product or service. You can read more about getting a deeper underst anding of your customer in another post entitled “How Well do you Know your Customers? Can you Answer these 12 Questions?” here. 

Portfolio Management

Many retailers and some consumer packaged goods companies have noticed that consumers today are suffering from “choice overload”.

Unilever LogoBoth P&G and Unilever have done some radical pruning of their br ands over the years. They have understood that most of their business comes from just a small number of all its products. P&G has around 300 br ands today, a third less than just a decade ago. Unilever has been even more ruthless. Since introducing its “ Path to Growth” initiative almost fifteen years ago, the number of its br ands has been culled from 1,600 down to just 400.

Retail organisations too are no longer willing to offer increased space for ever-exp anding br and portfolios. They often use the “one in, one out” rule and need strong evidence to add a new line from manufacturers. This has been especially true in recent years with the increase in the number of supermarket chains offering smaller, urban outlets, such as Tesco’s Metro and Walmart’s Express. You can read more about current retail trends here.

Walmart LogoWhat both retailers and manufacturers have realised is that Pareto’s Principle is highly relevant to the success of their businesses. The “Pareto Principle” or 80-20 rule, helps a lot in reducing the number of trilemma (or worse) type decisions that shoppers are faced with.

It therefore makes a lot of sense to regularly review your own portfolio and cut the “long tail” of slowest movers. Unless you have recently launched it or have a solid recovery plan in the pipeline, it is better to delete them.

 

Product Display

Another very good reason for reducing the numbers of br ands and variants in portfolios has to do with innovation. Today’s consumers thrive on novelty and constantly dem and new products and services. They quickly become bored or are satisfied for far less time than in the past.

In response to this, many companies have increased their level of innovation and new launches. However, neither retailers nor consumers want an ever increasing choice of products to sell or purchase. Therefore it makes good sense to have a “one in, one out” policy as mentioned above.

Identifying the best products and variants to put on shelf at each retail outlet or at a minimum by region, will enable customers to make those all important choices more quickly and easily. You will make the sale and the retailer will not be faced with stock that sits on their shelves, not moving; a definite win-win-win. (>>Tweet this<<)

Coming back to the issue of polarity, duality, dilemmas and trilemmas, I hope you can see that the situation in which a customer finds him/herself at the point of sale, whether they are facing a dilemma, trilemma or worse, will have a huge impact on whether or not they purchase.

Do you have something to add to this article and the customer choices we offer when they are faced with making a purchase decision? Please add a comment below. And if you enjoyed the post, then please share it with your friends and colleagues, so they too can be inspired.

If you would like support in reviewing your br and portfolio to identify the 20% of br ands and variants that may need to be deleted, contact me here and let’s discuss your situation. I know I can help.

C³Centricity used images from Microsoft, Unilever and Walmart in this post.

Why Marketing doesn’t Always Get the Research it Needs, But Usually What it Deserves

Why do marketers sometimes complain about the market research they get? I’ve often heard comments during presentations such as “We already knew that” or “This can’t be right” or “Why can’t you answer the questions I have?” I am sure you have said something similar yourself or been on the receiving end of such statements. What’s going on?

I believe that one of the reasons for such comments is poor briefing. Poor briefing by marketing which results in a poor market research brief to the supplier. If you too are sometimes dissatisfied with your results, then read on for some useful tips on how you can get the information you need.

Briefing

A market research brief is a document that helps a market research specialist to deliver the knowledge the business needs, in a timely manner. In some cases this will require conducting a market research project, but not always. Sometimes, it may simply be necessary to re-analyse previous work, in a different or more detailed way, in order to answer the questions asked.

Therefore I would never encourage internal clients to always think in terms of requesting a market research project when they are looking for information. In fact I would actively discourage it. This is especially valid when budgets are tight, as cheap research is often useless research.

Choose what you Need

As noted by Arthur C. Clarke, there is a management “trilemma” encountered when trying to achieve production quickly and cheaply while maintaining high quality. This is the basis of the popular project management aphorism “Quick, Cheap, Good: Pick two.” Conceptualized as the project management triangle as shown below, this aptly applies to market research projects as well.

A trilemma

Marketing is a profession where progression is often rapid and therefore the marketer may not be aware of all the information that is available within an organisation. In my opinion, it is essential for market research specialists, who are more likely to have been in their position for many years, to appropriately advise and support their internal clients, and not be just order-takers. (>>Tweet this<<) Unfortunately in many companies this is what they have become, which is such a waste of knowledge and expertise!

When it has been established that a new research project is required, then the brief becomes the vital first step for getting the information that is needed, when it’s needed. It should be drawn up to meet individual internal requirements, and as a minimum it should contain the following sections:

1. Background

This should provide all relevant information on your company’s situation and what risk or opportunity has been identified, as well as how and why this has been identified. Previous reports and studies that are relevant to the situation should also be mentioned and of course have been reviewed for answers before a market research survey is requested. 

2. Objectives

Clearly defined objectives are essential to the success of any project. In addition to the background, detailed objectives allow the best possible work to be carried out  and ensure the research meets them as fully as possible.

Their precision will also avoid many of the comments mentioned above, since everyone will be starting from the same level of knowledge and underst anding, and will have agreed that there is a gap in underst anding that can only be met through the running of a research study.

3. Decisions to be taken

Knowing what questions are to be answered and how the information obtained will be used, will help to identify the best methodology. For example if large investments will be necessary to action the results, then a quantitative study should be conducted, to ensure solid information and as reliable a result as possible.

However, when looking for your customers’ ideas, thoughts, feelings, issues and desires, you could find such answers through a qualitative study or perhaps from the analysis of social media comments online.

The methodology which is finally chosen will have a direct impact on the project’s pricing, so underst anding how the results will be used will avoid any waste in resources. 

4. Budget and Timing

These go h and in h and, both with each other, as well as with the choice of methodology. Normally faster is more expensive, as it requires a larger field force or online panel, and a tighter control of the project’s progress. It is also essential to underst and any budget limitations, as one that is too small for say a large quantitative study should prompt the market research expert to refuse running it. As quoted above, good, cheap, fast, choose two!

One further point is that if timing is too tight, especially for the delivery of results, you may not have enough leeway should something go wrong in fieldwork, or there is the need for more time to analyse the output. I always agree with the often quoted advice of Tom Peters, the American writer perhaps best known for his 1982 book, that he wrote with Robert H Waterman Jr and which is entitled, ‘In Search of Excellence’:

“Formula for success: under promise and over deliver” 

Formula for success: under promise and over deliver Click To Tweet

This doesn’t only apply to timing or market research either; it applies to everything else you have to deliver as well!

5. Research target and approach

Although the MR specialist is the expert, any (internal) client suggestions about the respondents to contact or their preferred methodology to be used, should be clearly identified. If your client doesn’t believe in qualitative work, it may be unwise to rely solely on such a technique. I’ve known companies – dare I say quite a few in the US? – that run tens of group discussions, just to have a “sufficient sample size of respondents to analyse.” If you are likely to meet such criticism, then I think it’s better to know before you start, so you can make relevant changes to the methodology!

6. Test materials and availability

If materials are needed to run the test, whether products, concept boards, advertising prints or videos, clear numbers of copies and their delivery date must be specified. Too often they are delivered late but the research results are still expected to be provided on the agreed date, which just puts everyone under unnecessary and easily avoidable stress. 

7. Deliverables

Not all research needs a detailed report (>>Tweet this<<); sometimes a presentation or summary of the results is sufficient, especially when timing is tight. Again, knowing upfront your internal client’s needs can impact both cost and timing and the likely success of the outcome.

So there you have it, a summary of the seven major parts to a good market research brief. Of course, in reality there are many more sections that can be added, which are more dependent upon internal priorities and specific industry or category requirements.

This post was prompted by a request from a client who is looking to update their market research and insight processes. If you too would like to upgrade yours, then why not contact us today and let’s discuss your own particular needs? Each of our offers is unique and customised, and can include a market research toolbox audit, process updates and one-day catalyst sessions to get everyone on the same page within your organisation.  

The image used in this post came from Denyse’s forthcoming book Winning Customer Centricity, now available for pre-order on C³Centricity, Amazon.com and Barnes & Nobles.

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