For any organization across the world to do business and succeed, it is of paramount importance to understand their customers well, to have a ‘pulse on the customer‘, as they say. The seller should always be able to at least gauge how a customer is expected to behave under different circumstances and scenarios.
The question I intend to raise here is on the ability of organizations to do so. Organizations typically commission market research agencies to conduct researches to derive insights into what the customers want. The research usually involves data collection, asking numerous questions to consumers on their decisions, choices and preferences. The humongous data is then processed to yield information which is further churned to develop insights about the consumer.
There are many issues with this kind of research. My primary contention is that it objectifies the process a bit too much, and in an effort to quantize everything in sight, it forgets that one primary reason for customer buying decision is instinct, which is developed by numerous pieces of facts and opinions, both rational and irrational. This process delineates Consumer Behavior from Market Research, which, in my view is a blunder – the two have to be blended together to develop insights.
That’s why I believe that whenever a company needs information about the customer, it should ask its own on-ground force to do it. The sales team of any company is the best equipped to tell the top brass about what the customer wants. They have talked to everyone in the value chain, distributors, retailers and customers and can present a coherent picture (even though it cannot be always quantized)
Another point against surveys:
Respondents always tend to fill answers which show them in a socially positive light, and not the hard truths. For instance, if you ask people a question: How many times do you brush your teeth in a day? – Give 4 options: once a day, twice a day, thrice a day, more than thrice. I can say with a lot of confidence that irrespective of the respondent group, with these options, twice a day is likely to garner the maximum votes, even though in reality once a day might be the correct answer.
Let me also talk about two major marketing failures here which could be blamed upon a lack of insight on consumer behavior:
1. New Coke:
This launch destroyed the reputation enjoyed by Coca Cola. They launched a new variant of Coke, based on blind taste tests which had shown it to be better than the original Coke as well as rival Pepsi.
They forgot that after years of Cola Wars, people had established allegiances to Coke and Pepsi, adopting lifestyles around their positioning. Shattering the original Coke and saying the new Coke is better, attacks the very lifestyle they follow. They also forgot that in case of carbonated soft drinks, it really is not that much a matter of taste, or even health, given that they talked of sugar content. The customer decides based on instinct.
This market research, driven by Blind tests, was a failure.
(Read detailed review of this scandal here: http://en.wikipedia.org/wiki/New_Coke)
2. Savlon vs Dettol
J&J too conducted a market research, trying to understand what the customers wanted in their antiseptic solutions. They got customer feedback that they did not like that Dettol stings and also smells bad. They took this insight, and made an antiseptic solution in Savlon which neither stung nor smelled bad. This seemed to be a surefire success. But it bombed, big time.
Why? – the company failed to understand that while the customer dislikes the sting, he still wants the sting because to him, the sting is a sure indication that Dettol is working on healing the wounds. He believes that for an injury to heal, it can’t be miraculously easy, there has to be some pain associated. Hence, he prefers the sting, and associates it with the effectiveness of Dettol. Since Savlon didn’t sting, it was perceived to be ineffective, and hence bombed.
It is of paramount importance to tread the fine line in understanding when are numbers leading to insights and when are they resulting into garbage.
The merger of Market Research and Consumer Behavior is the true key to unlocking consumer decision patterns.