What Do Consumers Really Want?

We all wish we know exactly what customers want. It would save us hundreds of hours of trying to plan the right marketing program, the best promotion, or the perfectly timed message in order to win their hearts and minds. But the reality is, consumers are people just like us. We don’t wake up telling the world what it is we want, or need, because sometimes, we don’t even know what it is yet! There are a lot of things we don’t have an opinion about, until we get prompted to express how we feel about something.

The good news is, there is a way to figure out what consumers want: through a series of techniques borrowed from the interdisciplinary fields of psychology and business. There are two components every marketer needs to know about understanding consumers: attitudes and behaviors. The research methods used to ascertain attitudes are different from those meant to collect data on behavior. Attitudinal data is about understanding how consumers think and perceive something, while behavioral data is about understanding how consumers act.

People don’t always act based on what they think. How many of us know somebody who would talk about wanting to kick a habit, but then a year later, we find the person consumed by the same habit? Sometimes, we think about doing something and then we go ahead do something completely different.

To have a well-rounded understanding of consumers, we need to know who they are inside and out.

Collecting Attitudinal Data

Surveying people is a common way to collect attitudinal data. In a survey, questions are designed to prompt people about a certain topic. Surveys typically include 10+ questions meant to get responses on many dimensions of a given subject. A good survey design maximizes the number of completions, which is the basis for successful data collection. The way a survey is designed can begin from simple questions to more complex questions, even adding “skip logic” which is a way to organize the questions so that if a person answers one way, a series of questions will branch out, or the question will skip to the next section to spare the respondent from answering questions that don’t apply to him or her.

One of the benefits of a survey is it is an instrument that can gather data at scale. The resulting data collected allows researchers to analyze them quantitatively— which is exacting and allows us to use more evidence to prove or disprove a hypothesis (by the way, every research study needs to include a hypothesis). Compared to qualitative data, you can use a lot more analytic methods on quantitative data.

However, qualitative data is also very useful to understand consumer behavior because it helps us understand latent attitudes that is hard to surface through a survey. Qualitative data can be collected via techniques such as intercept (where you stop people on the street to ask them a question) or focus groups (where you gather people in a room to probe them about a topic). Qualitative data allows you to probe a respondent further in order to get into more depth about the given subject— something an online survey can’t do because it is limited in the number and type of questions it can ask.

Collecting Behavioral Data

Behavioral data is a collection of data points meant to investigate how people behave.

Tracking pixels is the easiest way to collect behavioral data online or via digital devices. Usually, trackers are set up online or in mobile phones (ie. through the mobile browser and apps). Online websites and advertisement have tracking pixels in place so marketers can better understand who is visiting the website or looking at their ads. Typically, websites have a dozen or more trackers in place in order to triangulate the data and determine the variances between trackers (trackers count things differently, so they may have variances in counts). A simple way to find out which trackers are installed on a given website is to install Ghostery (https://www.ghostery.com/) in your browser. Once you activate it, it will show you all the trackers installed on every website you visit.

Putting it All Together

The holy grail for many researchers is to be able to match attitudes and behavior among consumer groups over time. Often times, when companies commission research, it’s either an attitudinal project or a behavioral project. In some cases, when clients are research-minded and have budgets set aside for consumer insights, attitudinal and behavior research projects are done in phases— the first phase might involve an attitudinal survey, and the second phase may involve tracking behavioral data among a statistically similar group of customers. But when doing both types of research is not possible, researchers need to be creative in the way they collect data. There are a lot of emerging research methodologies that are pushing the research industry forward, such as eye tracking, mobile research or immersive technologies. As customer behavior change, so does the way researchers track their attitudes and behaviors.

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On Digital Transformation

There’s lot of talk about digital transformation in recent years. Consulting companies have created new practices based on it, knowing that corporations will require guidance on how they should transform toward an increasingly digital world.

What is Digital Transformation?

To put it in plain terms, the premise of digital transformation is that traditional companies— such as Coca-Cola, Walmart, McDonald’s, GE— need to evolve in order to sustain its businesses into the future. Consumer behavior has changed, and so should companies who want to continue their success and defend their market leadership. Executives must adapt to the new norm by reaching their customers digitally. And that involves more than just creating a website.

What it entails is a complex revamp of the enterprise, implementing the right technology systems, organizing its data, and creating a flow of information that is accessible across departments— with the ultimate goal of making data-driven decisions (ie. through big data) and serve customers better (ie. through digital operations and marketing).

Where I’ve seen companies fail is when they oversimplify the process. They think being “digital” is just having a website (there’s hundreds of websites out there; these days, you don’t stand out by just having a website). Or when they think of “digital” as a concept that only resides within marketing, such as buying ad space digitally.

“Digital transformation” should be an evolution of the enterprise from all its nitty gritty corners.

Who Succeeds and Who Doesn’t?

Successful companies in the digital world succeed by any of two means: 1) they started as a digital company (Google, Facebook, Amazon), or 2) they have evolved successfully (Coca-Cola, Dominos, Target). They understood that customers are online and they transact online. Beyond that understanding, they’ve set up ways to serve these customers where they are now— online.

Companies who are struggling are those that don’t yet understand that evolution need to be systematic. It doesn’t have to all happen simultaneously, because that will cause a lot of messiness and disoriention on the culture and employees. Think about remodeling a house: you do it in phases. You don’t remodel all parts of the house at the same time or else there’s not enough space to do what it’s intended for: having a place to live. Yet while you remodel a house in phases, there’s a holistic plan that takes into account how remodeling can make the areas work together in a harmonious way.

What Successful Transformation Efforts Have

Having a plan is a more organized way to transform. Companies who evolve successfully have a consistent vision, and they have created a solid roadmap that set a structure and solid footing on which they can be successful moving toward the future. Employees are also informed by the changes they may experience, and this way they are prepped, can anticipate change, and act accordingly (ie. learn new skills).

Digital transformation should be about transforming the business into operating digitally, the brand(s) in how it communicates and engages customers, and the culture in instilling a collective vision toward succeeding in the digital future.

Advertising Should be About Communicating with the Customer

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People love to talk about advertising. Me too- it’s the industry that has shaped my career. “Mad Men” continues to be one of my favorite TV shows, long after the series ended.

Currently, I’m watching the last season again on Netflix. It tells the stories of business executives and their staff navigating the world of advertising, and the adventures (and mishaps) that ensue. Despite the many ethical and moral issues brought to light by the actions of the characters, bright young minds of today see these executives as future versions of themselves. They model their careers after these characters. I’ve talked to so many aspiring young professionals in advertising whose career ambitions follow those of Don Draper and his crew.

Who works in advertising?

Advertising is seen as a sexy and glamorous profession, with days at the office spent drinking and hanging out with cool people. And in many ways, it is. Not all the time though. There are some great minds in advertising who actually do work that moves the professional forward (and their clients’ business) everyday. It’s not just a cushy job for popular adults who sometimes act like kids. People love talking about the creative side of advertising because that’s what they see readily, but few actually understands the business of advertising.

I reflect on the time I spent in advertising– about 5 years in the beautiful city of Chicago– this is the industry that fed me, sustained me and helped me earn my wings as a professional. The skills I learned took me to many great places, both professionally and physically. Advertising helped me travel the world. I earned leadership positions, selected for plum projects, invited to speaking engagements and teaching sessions.

Why are there ads? 

But, let me ask an existential question about this industry- why does it exist? Everyone hates ads, right? Yet it is a very lucrative industry where money is exchanged by the millions everyday, between clients, agencies, and technology vendors.

Perhaps the questions I really want to answer are the questions my mom often asks me, to which I can never seem to give her a satisfying answer: what do you do? How does advertising make people money?

In my career, my role had always been about measuring the effect of advertising and marketing programs, analyzing data to generate insights, in order to help media planners make decisions on what media to buy. This is why I am keen on how the business of advertising works, because I look at it from a more holistic perspective than the typical media planner whose main responsibility is to put in an order to buy advertising space on a specific channel (ie. TV, print, digital).

Advertising originated as a way to subsidize the cost of printing news and short stories back in the day. In the advent of the industrialization at the turn of the century came the rise of the modern printing press, mass communication transformed the way people learned about news and gathered information around them. Since it cost money to distribute a message (paper, ink, writers, newspaper delivery boys), advertising was seen as a way to promote for-profit events for a price.

Then in the 1960s, TV was invented and mass-marketed, which set a new standard for distributing messages in the form of high-production commercials and other types of promotional content intended to sell a product or service. Producing TV shows is costly, which is why TV commercials play a key role in subsidizing shows.

Advertising should be more than just about selling

Advertising has been so intricately linked to selling a product that many people think that the focus of advertising is to merely sell a product.

But that oversimplifies the industry. It makes ads annoying and positions anyone who manages a brand to sound like a snake oil salesman. While I do agree that the objective should be to promote a product or service, it should be done in a way that communicates with customers. It should be about telling the story of how a product or service relates to customers’ lives. How it improves their lives and fills a need.

Advertising should be about the customer.

In past decades, yes, advertising was so focused on selling a product that it had lost the meaning of what it should stand for in people’s lives, which is to communicate with customers.

The question of why advertising exists seem like a question reserved for a drinking session on the patio among advertising professionals, but I think it is a worthwhile question to ask, even by those outside the industry, particularly now that we’re seeing the advertising landscape being disrupted from many corners by technology and other new entrants.

The digital disruption in advertising is real

Creative agencies used to lead the production of advertising creative. But now they are being displaced by bootstrapping teams of people with “prosumer” digital devices such as cameras and audio systems who can create videos and images that can compete with a high-value production.

On TV, the ad generally subsidizes the content. But now, streaming networks and their production capabilities are disrupting TV shows– the content itself for which the ad is made. Media agencies are also being challenged by programmatic technology that can buy the most efficient space automatically. Workplace culture is being disrupted too, with the growth of the “gig economy”, which consists of creative freelancers (who don’t necessarily need to have agency experience) picking up jobs at the expense of agencies losing creative talent.

The winners in this disruption are teams who can think of new ways to reach customers and engage with them because that’s the only way they can take an action toward purchase. These are usually uncluttered spaces filled with high-quality content. If advertising campaigns can incite an action (get people to talk about the brand, share the content with their friends, etc) that’s a good way for them to be memorable and be sticky to the customer well after the campaign.

The “Commercialization” Responsibility of Marketers

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Marketers have a wide array of responsibilities, which may range from overseeing advertising efforts to developing a promotional program to setting budgets for future marketing campaigns.

Commercialization is one of the most important role for marketers, and it’s only beginning to be defined and understood. By this, I don’t just mean a go-to-market strategy, but rather, creating new revenue streams to help grow the business especially in multi-brand companies where collaboration is key to effectively managing resources and expanding the business.

The purpose of a business is to create a customer. – Peter Drucker

The business strategist Peter Drucker believed that the purpose of business is to create a customer, thereby creating profit, and the most important functions he deemed are innovation and marketing because they contributed directly to creating this profit and other functions are considered cost centers.

This is a really interesting role, and the one most fulfilling for me. At the end of the day, when you set aside the efforts placed in communications and marketing programs, I believe the role of the marketer is to grow the business. As a matter of fact, any business role should be geared toward generating revenue directly or indirectly, but there is a higher expectation for marketers to be responsible for this because of their expertise in market strategy, consumer relationships and selling product.

Young marketers in the beginning of their careers may not understand what commercialization is about. If your role requires you to create profit for the company, here are some ideas on where to start:

  • Ask: Who is your company’s “growth customer”?
    • Brands typically have specific target audiences that have been well-defined and backed by sophisticated consumer insight research from marketing research firms. Marketing efforts are primarily focused on reaching and nurturing this target audience. However, there will come a point where revenues from this customer will plateau or decline, if it’s not already happening now. Consumers can only buy so much of a given product, even if it’s as good as chocolate or cheese. Beyond increasing usage occasions for their products, marketers need to start thinking about new customers to whom they can sell their product. It could be thinking about a completely new demographic (ie. families that make up of members with disposable income, if you’ve historically targeted moms), or just looking at subsections of a target audience group (ie. young professionals in their early 30s if you’ve always focused on the younger range of the “25-34 years old” bracket).
  • Product uses beyond your typical industry or segment.
    • Marketers typically think in terms of B2C or B2B. This binary way of thinking may stifle innovation and creative ideas to earn more revenue. When marketers think of generating new revenue, they ought to think how they can bring in new customers/clients beyond what’s the company historically caters to. For example, a manufacturer of consumer goods (ie. soap) may look into setting up contracts with hotel chains or gyms and create a B2B pipeline in order to expand the customer base.
  • Consult with your channel partners.
    • Channel partners can sometimes be a source of innovation and interesting market strategies. They bring to you new practices and business models that they are exposed to in their network. As they interact with companies in other industries (or companies in your industry, ie. competitors), and strike deals with them, they learn about new ways of doing business, which may help you think of ideas for your company.
  • Assess your company resources and think about how to package services that can be monetized.
    • This is the beginning of innovation; when you think about new revenue streams– I mean, really new ones that the company hasn’t historically explored– you can think of resources that the company may have in abundance, then collaborate with other functions around how to make it into a product or service. Manufacturing firm selling customer data or market data to other firms- some companies are already doing it. It might be time for your business to innovate.

Lessons in Cultural Adaptability: Varying Attitudes in Eastern and Western Cultures on Project Decisions and Direction

There’s a recent article featured on HBR that examines how people’s attitudes in the workplace depend on their relationship toward authority, which is largely driven by the culture they grew up in. Take for example, the difference between Western and Eastern cultures.

In the West, we are asked to be more proactive and a strategic leader is seen as more valuable than a tactician. In Asia, employees expect to learn their tasks play-by-play from their bosses. When American managers are assigned to Asia, or Asian managers are asked to work with American employees, disagreements ensue.

I see this first hand in my experience working with Asian colleagues from the Philippines. Part of my job is to provide marketing guidance to our team in Asia in a consultative environment. The recurring question is: How do we transform our marketing in the digital world? During our weekly meetings, those in the Philippines ask for rules and guidelines that they can follow step-by-step.

They ask about which specific media channel they should invest in: should we put all our media budget on Facebook?

They come to us looking for what amounts to laws of the land, or hard-and-fast rules that are rigid but comforting to them as they are well-defined. Is Facebook the one channel that will give us the best results?

My American colleague and I hesitate to provide them with a singular way to achieve a certain goal, because we wanted to encourage autonomy and creativity. In this case, they are a variety of media channels that they can look into investing in, not just Facebook. So we tell them over and over again that it would serve them well to look at the data, understand consumer behavior, and research media channels that are both successful and innovative in the market to make the right decision on their investments.

Yet, at the end of these meetings, our Filipino counterparts feel they are not given enough guidance because they are not given specific answers nor been told to go a specific direction. Whereas us here in the States feel that by looking for “rules” and “step-by-step” lists, they may be thinking in a rather short-sighted way, reluctant to open themselves up to new ways of doing things (ie. data-based decision making and experimenting with other digital channels).

In these interactions, I’m learning that Eastern culture emphasizes the importance of doing well what one is told to do, while Western culture emphasizes generating new ideas and collaborating on solutions.

Now, I’m trying to balance the cultural expectation of providing specific directions while also introducing a cultural change to think more freely, independently and rely on hard evidence such as data. I’ll suggest a specific scenario to answer their questions, then walk them through the process of why it would work, while reminding them that it’s not the only answer to their challenges.

Understanding cultural contexts allows us to make changes to our actions and communication in order to relate better to our peers.