In last year’s cliffhanger episode of “Can a Focus Group Save Spider-Man?” we pondered whether market research was powerful enough to save a Broadway show from doom and destruction.  After crushing reviews from theater critics, the producers hired a market research firm to help them rewrite the show.

Guess what?  It worked.  Since the show re-opened in June, it is regularly among the top five earners among Broadway shows, and The Hollywood Reporter reports that in December it “set a new record for a single-week box office gross, raking in $2,941,794 for the week ending January 1.”

In a year when Steve Jobs’ quip that “it’s not the consumers’ job to know what they want” has been used to bludgeon market research, we see research doing a pretty good job identifying buyers’ needs and helping decision makers address those needs in smarter ways.

It is true that consumers can’t answer questions like, “What show do want us to produce next?” or “What great technological innovation would be most useful to you?”  But they certainly can tell you want they want, and the art of research is to ask just the right questions to give you enough insight about what to do next.  Here are three things you can ask about, and that audiences, customers, and prospects will happily tell you:

1.  What is important to them and what they care about.  Insights about what matters to buyers will help you design your product or service and will provide deep insight about how to market it.

2.  What their frustrations are and what is not working.  Most consumers are eager to critique products and services that fail to meet their needs, which highlights the opportunities for new solutions.

3.  How good or bad your idea is.  There are lots of ways to test concepts, products, and ideas, and survey research is remarkably good at predicting winners versus losers.

The lesson from Spider-Man is that it does not take superhuman powers to fix a flawed strategy nor off-the-charts creative genius to make a good product sell.  A thoughtful effort to ask questions and to listen to your customers is sometimes all it takes to turn harrowing encounters with goblins into success.

–Joe Hopper, Ph.D.

]]> http://www.verstaresearch.com/blog/focus-groups-save-spider-man/feed/ 0 http://www.verstaresearch.com/blog/the-abcs-of-cbc-understanding-conjoint-for-market-research/ http://www.verstaresearch.com/blog/the-abcs-of-cbc-understanding-conjoint-for-market-research/#comments Thu, 10 Mar 2011 20:54:06 +0000 Joe Hopper http://www.verstaresearch.com/blog/?p=1184 Our March 2011 newsletter focuses on conjoint research, which we consider to be one of the most clever and powerful techniques of survey research.  Why?  Because it allows us to build working models of decision-making.

Conjoint works by presenting people with scenarios that are more like the real-life trade-offs they always make.  For example, instead of just asking a respondent about the importance of price, we ask them to make decisions about price, where price varies based on other attributes that are important to them.

There are several types of conjoint research, including traditional full profile conjoint, partial profile conjoint, adaptive conjoint, and choice-based conjoint. There are also choice-based techniques similar to conjoint, such as MaxDiff analysis.  Plus, there are different modes of analysis, including regression and HB (Hierarchical Bayes) estimation.  To make the right choice of method, you need to consider sample size, the need for individual-level vs. aggregate analysis, how many factors must be included in the model, and whether pricing is central to the research.

Yikes, that’s a lot.  So where do you start?  Start here:  The ABC’s of CBC: Understanding Conjoint for Market Research.  It provides a fundamental understanding of what conjoint is, how it works, and the kinds of questions it can answer.

After that, we would be pleased to help you consider your options, including the option of working with us or going it alone.  In fact, here a single conjoint question (no fancy modeling needed!) to help you decide whether we might be of value:

If you find yourself on the right side of the scale, feel free to give us a call.

—Joe Hopper, Ph.D.

Last week, theater critics roundly panned the show, calling it among the worst Broadway shows ever. The New York Times described is as “so grievously broken in every respect that it is beyond repair.”  But days after these negative reviews, a market research firm was brought in, soliciting volunteers to help fix the show:

If you love Broadway shows, we would like to invite you to be a test audience member and participate in either Act 1 (first part of show) or Act 2 (second part of show) of the all new Broadway musical “Spider-Man: Turn Off the Dark.”

We will be asking you to fill out a survey after the performance, plus stay for a 15 minute discussion in the Spider-Man V.I.P. room. In turn for your feedback and participation you will receive a Spider-Man goodie bag worth over $60.00, on us.

Can market research really rescue the show?  Possibly.  High quality research, both qualitative (such as focus groups) and quantitative (such as surveys) can provide deep insights into how customers and audiences think, perceive, react, and respond to products, services, and opportunities.

If market research can help rescue the show, here are two suggestions we offer that will be critical to keep in mind:

1.  Keep the focus groups focused. Too often clients or managers want their customers to tell them what would make them love their product.  That’s not something customers can reliably tell you.  They can tell you what they care about, what products they purchase and why, what needs and problems they are trying to solve, and what frustrations they face.  Our advice generally: Keep the focus group participants focused on the things that matter to them, then connect the insights gained to the products being offered.

2.  Ask only about things that can be fixed. For all the talk about “actionable” research, there is a great deal of research that offers supposedly actionable ideas that clients or managers simply cannot and will not act upon.  How does the audience feel about Bono’s music for the show?  Unless management is prepared to dump Bono or have him re-write (again), don’t ask.  The key is to determine during the research design which specific decisions can and cannot be made, and then to focus the research on collecting data that lends specific insight to those decisions.

Asking market research to help rescue a $65 million investment at the last minute seems like a tall order, but fortunately great research does not take super-human powers.  At Versta Research we rely on brains, experience, thoughtfulness, and a commitment to working closely with clients to ensure that we deliver insightful stories that are understood and acted upon.

So what will become of Spider-Man?  Will he die under the crushing weight of debt and harsh reviews?  Or will the critics groan in agony as Americans happily pay for the worst show on earth?  Stay tuned for the next exciting episode of “Can a Focus Group Save Spider-Man?”

—Joe Hopper, Ph.D.

An article in the October 2010 issue of the Journal of Marketing Research offers research to this point.  The authors identify a unique profile of consumers who are measurably better at developing, testing, and reacting to new product ideas.  The personal qualities these consumers possess include (quoting from the article):

• Openness to new experiences and ideas
• An intellective self-focus, or “reflection”
• The ability to apply both experiential and rational processing styles
• The ability to process information both verbally and visually
• High levels of creativity
• Optimism

The authors developed and validated an eight-question scale to measure these qualities, and showed that consumers who score high on the scale are able to give better ideas and feedback compared to those who score low.  The authors provide experimental data showing that products developed with input from this unique group of consumers are more likely to succeed in the marketplace.

So, you could ask a random sample of consumers to participate in your focus groups and surveys as you test and refine new concepts.  But if there is a non-random subset of them who can give you data that is more predictive of your new product’s success, why would you?  Forget about methodological purity, probability samples, and randomness.  You need a purposive sample focused on just this subset of consumers.

As always, good research requires thoughtful attention to strategies, outcomes, and how the research will be used.  Adhering to rigid protocols does not necessarily mean rigorous research.  Thinking about samples in smart and strategic ways is a great example of that.  If you are engaged in new product and innovation research,  give Versta Research a call and we would be happy to think with you about the best approach.  We would also be delighted to share with you (and execute for you) the eight-item scale used to identify the best consumers to test your ideas.

—Joe Hopper, Ph.D.

Something like this happens in the market research industry.  Large research companies advise hundreds of different product innovation teams and spend years collecting benchmark data on thousands of new product launches.  They develop metrics and benchmarks, explore “white space,” and advise on how to optimize messaging.  They tell you which of your eight product dimensions you need to revise (and how to revise them) to get good scores on their indices, all of which are driven by the thousands of other products they put through their algorithm machines.

For a lot of companies, the process makes sense.  They’re big, they have a couple million dollars to invest in a line extension, and they need to show management that they can leverage their spend for another 2% in incremental sales.  They don’t need game–changing innovation.  Chances are they will not get it because they’re using the same machine that most other innovation teams are using.

So here’s an idea.  The next time you have a $2M budget for innovation research, take a small piece of it and test a different process.  Forget about the data machines and benchmarks.  Ask smart people to think with you and to test some of your ideas on customers and prospects.    They’ll use focus groups, ethnographies, surveys, and statistics, but ideally they’ll be focused around your ideas instead of what everyone else has done for the last ten years.  Compare the insights you get from this process to the data machine.  If you get good insights and a top-notch team helping you communicate it to your management, chances are you’ve found a better way to do research for truly game-changing innovation.

-Joe Hopper, Ph.D.

Conjoint analysis is one of the techniques we use that comes closest to pure mathematical models of human behavior, and it can lend amazing insight.  With conjoint techniques, we create working models of consumer preferences for different types of products.  It works by presenting people with scenarios that are more like the real-life trade-offs they always make.  For example, instead of just knowing that price is important, the data from a conjoint study lets us assign a value to price relative to other important attributes, and then model how preferences change as we modify each attribute.

Conjoint is a powerful tool because it helps us understand not only which configuration of product features is optimal, but also why. It shows us how each component is being valued to drive overall preference.

Consider using conjoint if you want to understand:

• The tradeoffs that people make when evaluating their options
• How to bundle features to optimize your product or offering
• Needs-based segments among the people you are targeting
• Drivers of behavior that people themselves may be unaware of
• How your new product may affect product choices and market share

While conjoint analysis relies on a complicated set of mathematical algorithms, its beauty is that it ultimately tells a compelling story about humans, how they behave, and why they behave.

–Joe Hopper, Ph.D.

The reason?  Many clients have been using focus groups not for deep understanding of consumer needs and preferences, or to generate creative group dynamics among participants.  They were using them to get reactions and “votes” on package designs or product concepts.  Do you like the blue package, or the red package, and why?  Current technologies make it much easier and faster to answer simple questions like this through online surveys.  Since there is not a lot of research design or analysis involved, clients can do this work themselves.

There will always be a role for the expertise that a good focus group moderator or analyst offers, but helping clients pick between the red box and the blue box is not it.  When technologies make our work easier, faster, and cheaper, it makes sense that we bring key elements of this work back in house, while we work with partners and experts to tackle the tougher research challenges we face.

–Joe Hopper, Ph.D.