There was a strong response from customerthink readers to my article Get Below the Surface to Understand Consumer Needs

While I’m pleased so many read the article and took the time to comment, the message here is timely.

In this perfect storm of consumer discontent it is more important than ever for companies to understand consumer needs and wants. High gas prices, high commodity prices, the credit crunch, a stock market with perpetual jitters and a dysfunction White House have all lead to the lowest consumer sentiment index in decades.

I recently interviewed a research executive whose company has its pulse on the restaurant industry. His studies indicate consumers are eating out less often and when they do spending less and staying closer to home. He envisions no let up in this pessimistic trend.

When asked what restaurants can do anything to at least keep their heads above water, he opined that better service and more specials seem the order of the day. I was left feeling a sad case of déjà vu.

You got me. I’ll admit it. There are many reasons to spend dollars that might go to marketing research on a new Porsche. Here are my top ten:

1. If you make the wrong decision it won’t cost you a dime.

2. You won’t ever run out of money by being wrong 50% of the time.

3. You’re sure input from customers or prospects won’t help you make better decisions?

4. You know far more about what your customers will purchase in the future than they do.

5. You are absolutely clear why your prospects haven’t become your customers…and you don’t care.

6. You are sure that satisfying additional needs and wants of customers won’t add more business?

7. You know that you can raise prices and make customers happier at the same time.

8. You’re sure customers know the benefits of buying from you and there’s nothing more to say.

9. You’ve decided market research is just an expense and won’t give you a good ROI anyway.

10. You’re far smarter than customers and prospects about which actions you should take to grow your business and in what order you should take them.

I’d like to publish the top 20 list, so please send along the one you’ve found to be tried and true. Who, after all, doesn’t want a new sports car?

Focus groups and other forms of qualitative research are intended to surface consumer motivations and attitudes. Armed with this insight, companies can then create more insightful marketing programs and new products. Or so the story goes.

The problem is that consumers usually don't provide breakthrough thinking when questioned using traditional and arcane research approaches. The trick is getting below the surface so that you can uncover consumer wants that are new, unique, potential moneymakers and not already being addressed by competitors.

For many products and services, consumers don't pay much attention to why they behave as they do. They operate out of rote or fixed patterns and usually give superficial reasons for their behavior, often unaware of their unconscious motivations and reasons for behavior.

I’ve been getting a number of inquiries about how companies should determine an effective marketing research budget. At the outset, know there are many factors involved in this imprecise exercise with not the least being company tolerance for risk.

Some smaller companies with $10 to $20 million in sales will spend $250,000 or more on focus group, image, customer satisfaction and new product development studies. They tend to be companies that are intent on optimizing the chances of success and/or reducing the risks of failure as much as possible. Then there are $100 million companies that reluctantly squeeze out $50 or $60 thousand for a now and again study to address a specific problem that might arise.

Every company has a certain research culture. For some, research holds a pivotal role in the how marketing decisions are made. For others, research is regarded as an unreliable indicator of success and held in relatively low esteem. Whatever your company culture, at one time or another you may have wrestled with how much is reasonable to be spending on marketing research. If so, here are seven alternative approaches that have worked for various sizes and types of companies.

There are two most common reasons that marketing research doesn’t play a more prominent role in companies are TIME and MONEY.

For the most part, small and mid-size companies don’t budget the time necessary to insure research is part of their decision making process. If they do any research it’s often the “Microwave Kind.” The quick and dirty, often after the fact, when things are going bad, when you need the answers yesterday, when nothing you’re doing seems to work kind.

For marketing research to be “real research”, it should be conducted early on. Before major decisions are made in regard marketing and product planning. Real research takes a more time than The Microwave Kind…usually 8 to 12 weeks more.

If you’re not giving yourself the luxury of a little time, if you want to bet your bottom line for the next year or so on the heat ‘em up quick kind of research, if your concern is with thinking fast rather than thinking smart, Microwave research will do the trick.

In my initial blog on this topic, I touched on four areas. Specifically:

1. The differences that exist when writing a questionnaire that
respondents will fill out themselves as opposed to one in which a professional interviewer administers the questionnaire to the respondent.

2. Knowing which questions should be asked early on in the questionnaire, in the middle or toward the end.

3. Understanding how to phrase questions.

4. Being sensitive to questionnaire length.

(http://www.customerthink.com/blog/guidelines_writing_effective_questionn...)

But the perfect questionnaire will achieve nothing if you fail to get cooperation from a representative sample of respondents. To secure respondent cooperation for an interview, the following steps will be helpful:

Immediately address skepticism:

Writing an effective questionnaire is not a task for novices. At the very least it requires an understanding of four basics. These are:

1. Considering the differences that exist when writing a questionnaire that respondent’s will fill out themselves as opposed to when a professional interviewer administers the questionnaire to the respondent.

2. Knowing what questions should be asked early on in the questionnaire,
in the middle or toward the end.

3. Understanding how to phrase questions

4. Being sensitive to questionnaire length.

I am fully aware that it boarders on the absurd to address as broad a topic as questionnaire construction in a blog piece—or even in two, three, ten or twenty pieces for that matter. There are dozens of books on the subject not to mention thousands of technical papers. But in discussing certain givens here it might, in some small way, help in your next market research study. So, here goes:

1. Self Administered vs. Interviewer Administered Questionnaires

There are some basic differences in how the questionnaire should be constructed if it is to be filled out personally by the respondent or if an interviewer is going to administer it. These are:

Much that is written by the various www.customerthink.com bloggers is about understanding your customers from a transactional point of view. For example, what they bought, when they bought, how much they bought, what particular promotion generated incremental sales, etc. In other words, understanding the WHAT of your customers.

There is no doubt that what customers have done in the past is a good predictor of future behavior. As result marketing and selling efforts should indeed focus more effort on customers highly likely to buy again than those unlikely to buy.

What has also written by me and several other blog colleagues is the importance of better understanding the WHY of customers. For example, why you are doing well with certain customers and not others, where you should strengthen your customer service operation to encourage even stronger buying, the areas were marketing and merchandising should focus attention to bring customers to the next level of profitability.

What few have mentioned, at least overtly, is being able to tie the WHAT of your customers to the WHY of them. It’s often referred to as LINKAGE.

Many companies, particularly, small and mid-size ones, conduct focus groups because they find them thought-provoking, interesting and an economical way obtaining attitudes of customers and prospects. But they often take findings from focus groups as gospel and make unwise investments as a result.

In his book entitled “Blink,” Malcolm Gladwell is highly critical of focus groups and refers to the information groups provide as “thin-slicing.” And he makes a very good argument against the use of groups as a valid research technique.

Consider this line of questioning for a discount store client:

Moderator: The last time you shopped at a discount store for clothes, what was the most the most important reason you choose the store you did?

Respondent in a focus group: They have the lowest prices.

Moderator: What else was important?

Respondent: I know if I go to that store, I can get in and out quickly?

Moderator. Anything else?

Respondent: There is usually somebody around that can answer questions.

Attending a conference for CFO’s and other financial types, I felt like duck out of water. But only for a few minutes.

As a career researcher, I felt it would be a waste of time to sit through four hours of presentations on being a more effective CFO or comptroller. Nevertheless the situation seemed worth the effort and off I went.

Well, the theme of all the speakers was basically the same and could apply to almost any staff function. It particularly hit home to me.

Simply put, to get a meaningful "seat at the table" it’s imperative to behave first as business person and secondly as a purveyor of numbers. For the financial executive this means having less an eye toward the intricacies of the balance sheet and more of an eye toward what the numbers mean for the business. Toward what actions they suggest.

The CFOs and headhunters who spoke implored the audience to learn their trade well and then become specialists. This meant that once they achieve success in providing their company numbers that can be trusted, they should turn their attention to what the numbers suggest.