Quantifying the Unquantifiable

The whole point of this class is to understand the importance of gaining consumer insights. To be a successful marketer, it’s imperative that we listen to what the consumer wants, tailor a product to their needs, and ensure we put a product that meets those needs in the market. Of all people, Americans understand the importance of meeting the consumer’s needs. Of any single country alone, the US is estimated to spend the most on marketing research – a whopping $6.7 billion dollars. The UK is a distant second with $2 billion spent each year on market research.

With all this money spent on marketing research, one would hope that it guarantees success for a company. It seems unlikely that a company would want to spend millions of dollars to better understand their target market, only to see unrealized gains. But there are still those that question whether or not there really are benefits.

Are marketing costs really worth it? This is an extremely difficult question to answer, especially because marketing is always seen as a cost center rather than a profit center. And from an outsider’s perspective, I can see how this is true. When a company says they spent $1 million in the last quarter on finding out how they can be innovative yet still meet the consumer’s needs, how does this translate to the bottom line? How is the marketing department supposed to prove to the upper echelon that the money the company spent so hard in earning was spent surveying the population? It seems impossible for marketers to turn around and tell management that for every dollar spent on marketing research, $x dollars was brought in as sales.

But from a marketer’s perspective, I can also see the flip-side to this argument. It seems silly for other divisions of a company to undervalue marketing. Without marketers, important insights would never be gathered for the company’s use. New product ideas, brand re-imaging, and product repositioning would be done without any support or reasoning behind the change. As a company without market research, you would be making assumptions about what the consumer really wanted. These assumptions are extremely dangerous and could greatly depreciate the bottom line of a company. With that said, not having marketing research kills the bottom line because it is very easy to make the wrong move.

Even if we were to argue that marketing research is a cost center, it still leads to the benefit for a company.
If we were to look at the value chain, we see that marketing is one of the last primary activities that lead to margins. With that link in the chain, companies create new products and techniques to better address consumer needs. By catering more to the consumer, the target end-user is more likely to purchase, which will directly drive sales. But if we remove marketing and marketing research, there is huge potential of driving the consumer away. We may think a new product innovation is what the consumer is looking for, but could actually be the exact opposite. This leads to unhappy consumers, which results in fewer purchases, lower sales numbers, and therefore a cut to the bottom line.

I think this issue of understanding the value of marketing and market research is especially interesting during the current economic climate. Everyone always says that marketing is the first thing to go when things are financially unstable and am appalled at this. It is imperative that companies continue to go out and research the population and gather, analyze, and make conclusions about the insights of buyers. It is imperative that we always stay on top of what they are saying and use their insights in making decisions about the direction of the company.

In finance class, we learn that the most important thing to a company is to maximize shareholder value. The way to do that is to add to the bottom line and return dividends to the owners of the company. And how do you do that? Sell your goods and services. The way to do that is to make sure that your goods and services really match what the consumer is looking for. And how do we do that?

Gain and understand customer insight.

The Persuaders

Dr. Rapaille, labeled as a “marketing guru” in the PBS special The Persuaders, was tasked to find out what really makes the consumer tick. What really drives a consumer to behave a certain way? Rapaille and many others believe that consumers present reasons that are inconsistent with behavior, so Rapaille studies people to understand the underlying or hidden messages that consumers present when reasoning their purchases.

Coming from a psychiatric background, Rapaille was forced to decode the issues of mute, autistic children. Applying his experience and learnings from his previous work, Rapaille helps marketers decode consumer actions. To do this, he uses a 3-step technique in focus groups to get to the bottom of human behavior. The 3-step technique involves:

1) Listening to a consumer’s reason
2) Getting to the emotional aspect of their behaviors
3) Tapping into their primal core to find the true rationale behind their behavior

In the first stage of understanding reason, Rapaille makes it seem like the participants are in a regular focus group. In the study that PBS showed, Rapaille was trying to decode what luxury meant to the consumer. By asking them to associate words with the word “luxury”, participants were able to show that they were logical and intelligent. Rapaille has discovered that people have a tendency to show these characteristics, so this stage allows them to do so. He is not really interested in the content of their feedback; he is just trying to let them get beyond this stage so he can move to the next two, more important, stages.

After a short break, he asks the participants to tell a story to convey “luxury” to a 5 year old from a foreign planet. This process enables Rapaille to tap into the emotional viewpoints of the participants about the word “luxury”. No longer are they trying to show that they are rational, logical thinkers, they are now just trying to convey a thought to a simple-minded 5 year old. This is a very important step to Rapaille because he is now beginning to really understand the most basic meanings of “luxury” to the consumer. They are being more simplistic in their descriptions, as one would be when speaking to a 5 year old.

At this point, the participants are utterly confused as to what is going on. They are given another break and then in for another surprise in the last session, or stage, or the 3-step technique. To tap into the primal core of the participants, Rapaille tries to get the focus group members in the most vulnerable state as possible. After letting them relax and rest in darkness, he tries to capture their thoughts right when they wake. According to the marketing guru, the thoughts of an individual when they wake up in the morning reflect their “primal urges”. By stimulating this state of mind, he is able to capture dormant thoughts that are not readily accessible in other states of mind. Studying the thoughts expressed upon awakening, Rapaille is able to identify the “reptilian hot buttons that compel [them] to action”.

While Rapaille does not convey exact findings about the public's associations with the word luxury, he does let the audience know that the reptile brain is the most important, latent aspect that we overlook or fail to discover when considering consumer insights. The reptile brain contains all our first impressions and associations of things, and these impressions and associations are what influence our daily activity and decisions. For example, he coded SUVs to mean "dominance", causing many SUV manufacturers to build larger vehicles with tinted windows.

With the 3-stage technique, Rapaille convinces many Fortune 500 executives that there is a simple code to understanding what makes the consumer tick. Based on testimonies, executives honestly believe that this technique has allowed Rapaille tap into the hidden drivers that bring a consumer to behave a certain way.

The second part of this blog asks that we evaluate the marketing technique of Song Airlines. Specifically, we are asked whether we think the image that Song has tried to exude was a good or bad idea and areas that we think could have been improved.

I disagreed with the strategy that Song Airlines employed. They identified themselves as a low-cost airline, but their marketing did not express this at all to the consumer. From their commercials and in-store marketing, it seemed like they were more of a high-end airline. With offerings like organic meals and retail outlets, it appeared that they were appealing to a consumer that had high demands rather than the no-frill consumer looking to put the smallest dent in their wallet. As one of the marketing team members of Song said, low-price airline seekers are only looking for a cheap ticket. The strategy that Song used did not show this at all. In fact, if I had seen the commercial done by Mr. Spade, I would have had no idea that Song was catering to the price-conscious consumer. From the commercial, I drew that Song was an airline that was catered to the middle-class, family oriented consumer.

Some things that the airline did well were the “training” of the employees and the focus on the importance of the logo. By making sure that they hired a specific type of employee that was especially “song”, the company was able to convey a very unique message. Their focus on the logo was also well done because it helped solidify a concrete brand image. Both the employees and the logo were consistent with the fun feeling that I got from the brand.

One thing that I did not like about the Song branding was the interior they chose for the airlines. I know they were trying to convey the youthfulness and spunk of the company, but I felt it made the airline seem very unprofessional. By using extremely bright colors for the upholstery, they seemed like a childish brand that would not necessarily appeal to most consumers. Because a plane is a place you hope to relax before and after your busy trip, distracting colors would probably not please the flyer.

One other flaw I saw was the fact that Song was trying to create buzz that only created confusion. Specific examples include the green-suited men with monitors around their necks and the physical retail stores. This definitely caught the attention of the consumer, but they were only left confused about what Song was. Song should have made much clearer messages to the consumer if they decided to use these avenues to create awareness. They were adding more to the clutter rather than standing out in the mess of information.

Who to trust?

As this class looks further into customer insights, it was interesting to see Malcolm Gladwell’s perspective on the topic. In the article and both digital medias that featured Gladwell’s insight, he interestingly points out the irony of consumer feedback.

Instead of focusing so heavily on customer insights, Gladwell suggests the perils of them. For example, he discusses the example of the Aeron chair, which was an unexpected hit after terrible reviews from the public. Everyone said they didn’t like the way it looked; that it was wiry and unlikely to support them with its mesh fabric. Despite these reviews, the Aeron went on to be the most successful office chair in the history of office chairs. In fact, it has won itself a permanent spot in the New York Museum of Modern Art.

Trust no one unless you have eaten much salt with him”
- Cicero

This quote applies to the lesson that Gladwell teaches in the Aeron chair example. Although it is important to listen to what the consumer says, it is even more valuable to take their insights with a grain of salt. Gladwell makes a very valid and interesting point that it is very difficult to get to people’s heart and truly get to what they think. Often times, the consumer does not know what he wants or just cannot find the words to express what they seek. Other times, they just don’t tell the truth.

Knowing that consumers often don’t convey what truly goes through their minds, it is important as marketers when doing research that we are careful not to completely believe what they say. While I venture to say that their personal insights are truthful about 80% of the time, there is a pretty substantial probability that they aren’t being completely honest or just can’t describe what they are feeling.

Just from speculation, I suspect that consumers misrepresent their desires or wants in two instances. The first is when they are asked to convey their feelings about something sensitive. The other is when they are being asked about something they are unfamiliar with. For example, if someone were to ask me about a product for personal hygiene, there is a very high probability that I would lie about my preferences in fear of them finding out too much about my personal space. Or if someone asked me about golf clubs, I probably would unconsciously misrepresent my answer just because I am not an avid golfer. (In fact, I’m quite bad. I often swing without hitting the ball) However, if I was an experienced golfer, I probably would give a different answer because I knew so much about what I did and did not like.

With that being said, I think it’s important that market researchers or business people be very careful when conducting surveys to analyze customer preferences. To prevent misrepresentation of true consumer insights, strategically hide sensitive questions or make sure that you ask the right people about their consumer preferences.

A second lesson that can be learned from Gladwell’s book and talks is the importance of first impressions. The cliché quote that says that impressions are everything is true in some sense. In Blink, Gladwell talks about how the packaging of different brandies led to either success or failure. In the example, a brandy was losing market share to a competitor, although tasters had more positive associations with their product than their counterpart. After heavy pondering, the company determined their loss in sales was due to their packaging. After changing their bottle to match more like their competitor’s, they were able to regain market share. In a similar example during TEDtalks, Gladwell attributes Grey Poupon’s success to the high-class image exuded to consumers. Both examples show how impressions can change consumer behavior.

I can attest to the importance of impressions as a consumer. Gladwell seems to talk/write a lot about food, so I’m going to use a food example as well. Besides, it’s probably the easiest thing for a foodie like me to talk about. Because I am such a foodie, I like to try everything that is considered edible. As you can imagine, eating vast amounts of food can be a hazard to the waistline, so I always try to eat healthy whenever possible.

Eating healthy is hardly possible when you have a sweet tooth like mine. Cakes, pies, ice cream, anything that uses at least a cup of sugar to make or bake, sits high on my list of things I like to eat. So this is where the conflict arises: I love eating sweets, but I try to eat healthy at the same time. The way I allow myself to indulge in my favorite things is by selecting foods that appear to be healthy or healthier. So if I were given the option between a chocolate cake and a chocolate cake topped with berries, I would go for the berry-topped slice of heaven. Obviously, the fact that the cake is topped with berries makes it no less unhealthy, but I perceive it to be healthier than a slice without any fruit atop. In other words, it makes the right impression on me to trick myself to eat it.

So the lesson to be learned here is that as a marketer, it is extremely important to take into consideration what kind of impression your product makes on a consumer. Your product may be great and better than the competition, but if it is inappropriately presented, then you have lost a potential customer. But as mentioned earlier, understanding how you can make the right impression is the tricky part. So it seems like there’s a never-ending circle when it comes to customer insights. You try to find out how to make the right impression. So naturally, you ask the consumer.  You make changes to meet their needs/desires, only to find out that their insights were unreliable.  So now you need their insights again and you're back to where you started from.

This leads me to an overarching lesson that I think we as business people can draw from Malcolm Gladwell. I believe the overarching lesson stems from the need to trust yourself. I firmly believe that the spirit of entrepreneurship thrives on faith in your own idea. So take it and run with it. Konosuke Matsushita, founder of Panasonic, relates to this point when he said:

“No matter how deep a study you make. What you really have to rely on is your own intuition and when it comes down to it, you really don't know what's going tohappen until you do it.”

Customer surveys may tell you one thing, but sometimes your own insight is just as important as the consumer’s. Your thoughts and insights may better represent what the consumer wants than you think. After all, it’s easier to get to the root of your own heart than someone else’s.

Just imagine what would have happened if Herman Miller decided to cancel the launch of his chair. This world would be missing out on the greatest office chair known to mankind. So when the entrepreneur within you decides to release something that doesn’t get the highest ratings, don’t let it get you down. If you have enough reason to believe in its success, follow your instinct. You too are a consumer. Listen to your own insight every once in a while.