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Market research matters

As the world becomes more sophisticated and business grows more competitive, research takes on a more vital role. Whether new or seasoned, businesses can learn many things from research and use it as a guide.

Greg Bradley of Decision Scientific in Gulfport says the three Ms of research are measure, model and manage.

“We do the first two and the client does the last one,” he said. “Our primary concern is making our findings actionable. We want to make sure the client can take the information and use it and it does not sit on a shelf. That’s bad for the client and bad for us.”

Established in 1996, Decision Scientific is an applied research and management consulting firm with a broad range of services. Bradley and John Brady are the principals and bring extensive business backgrounds to the research business.

“We’re dealing with a lot of consumer behavior lately. What factors influence people to become loyal customers? Why do they want your company or product?” Bradley said. “We feel that’s so, so important these days in any kind of business with things as competitive as they are.”

Understanding customers

There are several ways to extract information from consumers to determine how people act and intend to act. Those include phone surveys, intercept surveys and probability samples that are totally random.

“It’s a necessity for most companies to clearly understand customers and identify the drivers of satisfaction and loyalty,” Bradley said, “because that allows companies to improve their decision making.”

Decision Scientific has many clients in the tourism and gaming industries. One of these might ask them to conduct research to ascertain customer perception of a hotel, including front desk friendliness, room cleanliness and level of customer service. Armed with research, the client can move resources to areas of need.

In the fiercely competitive gaming industry, customer loyalty is the name of the game. Some casinos measure customer perceptions monthly and quarterly. They also gauge attitudes about other casinos and are concerned about perceived slot payouts and value. Intercept surveys on the property may be done or random samples with margins of error. Most gaming companies have huge bases of telephone numbers making phone surveys viable.

“It’s important to measure in a way that the client is comfortable because it impacts the bottom line and some are not comfortable with semi-annual research,” Bradley said. “We find all the time that resources are being focused on things that are not customer driven but are being done by intuition.”

Slicing and dicing data

After the information is gathered, it can be sliced and diced by gender, age, household income, geographical radius and many other ways. From these findings clients can tailor their marketing campaigns and advertising messages.

Bradley, who is a former director of planning in Casino Magic’s corporate office, says the issue clients are most concerned about is the way employees treat guests. “Service is key to loyalty, and we see a lot of customer churning,” he said. “The two parts of loyalty are behavioral and attitudinal. Customer delight goes beyond simply being satisfied. These customers are unequivocally loyal and are a company’s best form of advertising. It’s important to measure these attitudes on a repetitive basis so you know which customers are more likely to defect.”

Kurt Rushing of Southern Research Group (SRG) in Jackson also sees a lot of clients trying to find out how customers perceive them or their products. Among SRG’s clients are banks and hospitals that have management changes and new owners.

“Word of mouth is important in small communities, and a client may want to know how they’re perceived in the community,” he said. “Or we may be hired by a statewide bank to determine what people think of employees in the branches. Each branch has different demographics.”

Rushing, who is director of business development for SRG, says focus groups have become widely used in the past decade.

“With focus groups you can test existing or future products with recruited individuals that fit your demographics,” he said. “This way your company can formulate more effective and targeted marketing campaigns that speak directly to the people you are trying to reach in a way that interests them.”

Keith Bates, vice president of Maris, West & Baker, says the Jackson full-service advertising agency always recommends research. “You don’t want to market by assumption,” he said. “Research is like a roadmap to where you want to go, but first you have to know where you are. Companies can make a lot of assumptions, but that’s only perception and may not be factual.”

This 20-year advertising veteran feels that research should be part of a company’s business plan. A company may not know the competition and how it can affect their growth. The company’s degree of aggressiveness may determine how much research they want to do.

Wasting time, money without research

“Strengths and weaknesses is an important research tool,” Bates said. “You can continue to do what you do well — that’s important and we recommend that in some cases — or focus on weaknesses. Research reveals a lot of things you presume to be the truth. A lot of time and money can be wasted without research.”

He cites the Nova automobile that Chevrolet introduced in the 1960s. The car did not sell in Mexico because nova means ‘no go’ in Spanish. Cultural differences and how a company’s product will be used by various groups are important, especially with the Hispanic population, one of the fastest-growing segments in the U.S. Bates says focus groups are good for finding out about new products and will give initial responses.

Advertising recall is another weapon in the research arsenal. “It will determine how many people can recall your ad by the name of the product or name of the company,” Bates said, “and will let the client know how well their message is being received.”

John McKie, senior vice president of marketing for the GodwinGroup of Jackson, says cost resistance for research varies with the size of the client, the project and what they want. He points out that secondary research is less costly but primary — original — research is truly important, too. He thinks some of that resistance may come from a negative experience with research in the past, the kind that may not tell a client what to do but is heavy with charts and graphs.

‘Cheaper than a mistake’

“If you’re going to invest money in a business, isn’t it worth it to invest a few dollars in research?” he says. “It’s a lot cheaper than a mistake. That’s why it’s critical that clients understand that research helps them make decisions. We try to turn it into something that hits the street.”

McKie, who worked at McRae’s for 22 years before joining the full-service advertising agency, says gathering information can be as simple as looking for magazine articles or talking to knowledgeable acquaintances about a topic. On the other hand, it can involve surveys of hundreds of people nationwide.

“Suppose you want to open a home cleaning franchise in the metro Jackson area. There is a wealth of information available for free about the number of households, income, age, gender and ethnicity that would help you make the decision,” he said. “You could also figure out what competitors already exist and learn about them, and find information on lifestyle trends that could impact your decision.”

However, even with this secondary research, nothing tells you what people in the metro Jackson area think about a home cleaning service. What services do they expect? What price seems reasonable? Will they demand the ability to schedule visits over the Internet? Questions like these can only be answered by primary research. McKie says one common type is a mail or phone survey covering a number of questions to a sample of people or holding a focus group. Sometimes both are used.

Actionable information

“The key thing for a business considering research is to make sure you get results back that can be translated into action, to help make decisions,” he said. “Research, especially primary research like phone surveys and focus groups, can be a significant investment. Secondary research may be all some can afford and it can still provide great benefits.”

McKie recommends research for a major business decision and says it’s much less expensive than a failed business or a bad location.

As a case study, he tells of a public utility concerned that some homeowners did not understand the safety messages sent as bill stuffers. There was concern about the literacy level in some of the customer base, resulting in the safety message being unclear.

“Through interviews with educators in charge of adult literacy we realized that most of those who cannot read are still what they call ‘functionally literate’ meaning that while they can’t read the word STOP, they know that a red octagon shaped sign with these letters means STOP,” he said.

Using orange and white stripes with bold lettering, the utility company incorporated color and graphics that are associated with road construction into the safety messages placed in bill stuffers. Those who are illiterate are likely to associate it with something they should do to prevent harm, or they recognize its importance and take the piece to someone who can read it to them.

In another instance, the Mississippi Department of Transportation needed an anti-litter campaign. They had primary research on who litters more. Secondary research was added to better understand who litters more frequently. It was discovered that men over age 18 and those driving trucks are in this group. Their main reasons for littering were discovered to be carelessness and lack of responsibility.

Additional secondary research was aimed at understanding successful programs of other states such as Texas.

“Using this combination of primary and secondary research, creative messages were developed to speak to this audience in particular,” McKie said. “The messages were tested among the target audience through focus groups and found to be relevant, able to grab attention and likely to motivate them to be more responsible for their actions.”

The result was the “I’m Not Your Mama” campaign featuring Pat Fordice. In the print and broadcast campaign, all the drivers were men driving trucks. They were careless and irresponsible. The message was very direct in telling them to clean up after themselves.

Contact MBJ contributing Lynn Lofton at mbj@msbusiness.com.

About Lynn Lofton

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