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    I’ve been thinking a lot about market research lately, and how important it is to know your customers. Some companies are flying blind when it comes to offering and advertising their products or services. Here’s a few tips on why and how to get to know your customers!

    Meet their needs and solve their problems. It may seem obvious, but how are you going to meet their needs if you have no idea what their needs are? Some companies think that because they sell a certain product, they don’t need to find out about their customers’ needs. But just because you fill a niche, you’re not off the hook! Take Zippo for example. I just saw an article about Zippo changing their marketing strategy, as their sales have been falling. They have focused on pocket lighters for the majority of their existence, but have recently started moving into female-friendly and outdoor-friendly products. By recognizing that their products were being used in different ways, they were able to gain more market share and expand their business. Talk to your customers and find out what they need.

    How do I talk to my customers? There are many ways to speak to your customers, but the biggest point is to listen to what they’re saying. Don’t go into research trying to prove a hypothesis about what customers like and dislike, just be open.

    -          Focus Groups: Focus groups involve speaking with a small group of the target demographic, usually in a moderated session. The moderator asks guiding questions to open up the discussion, and keeps the conversation flowing. Taping these sessions gives companies the opportunity to view facial reactions and other body language, and to accurately record spoken responses. Maiden Form used a focus group when their sales were falling, and found out that their target demographic of young females viewed them as a brand their mom would use! They quickly re-worked their strategy and sales started rising.

    -          Surveys: Surveys are great because you can reach a large number of people to ensure a strong sampling of the target demographic. Once you receive the responses, you can use statistical analysis to figure out the most important problems your customers face. You can also use surveys to determine ways to improve your solutions to those problems. ConstantContact and Survey Monkey are two services that make it easy for you to set up online surveys.

    -          Usability studies: There are two ways to view this: Is my solution useful? Is my solution usable? Let’s take a look at the first question. You need to make sure that your product or service uniquely solves a customer’s problem. Coming into an established market is difficult, so you need to make sure that you have a unique value proposition. You also need to make sure your solution is easy to use. My favorite example of this is the label, “some assembly required.” I know dads around the world shudder at this phrase, as it usually indicates hours of work with obscure tools. Instructions and usage should be customer-friendly, and you need to do testing to figure this out. Focus groups can act as a moderated testing situation, where participants are given product examples and asked to rate them on different aspects. For software and other technology, a Beta version usually reveals bugs in the product. UserTesting.com offers a low-cost remote usability service that is perfect for website owners. There are many ways to figure out if your product is useful and usable, and these must be included in market research.

    Market research is not a one-time endeavor, but rather a continual process of understanding your customers’ needs. So, how does your company stack up in the market research category?

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    Today’s post features “The Medici Effect“, by Frans Johansson. I’ve been promoting this book to my friends, family and random co-workers since I first read it in spring 2008. This was the most eye-opening book of my college career, and I would recommend it as a yearly read for anyone who needs a touch of creativity. Why do you need creativity in Marketing you say? Check out the highlights of the book to see if you can use any of the tips!

    Connecting things that wouldn’t normally be connected

    The book talks about jogging your brain by connecting things that wouldn’t normally be connected. Force the connection if you have to! He gives examples of architecture and insects, music and airlines, and many more. When people go out of their way to find a connection, they might just happen upon a brilliant idea! As you think about your product, service, company, and customer, think about new ways to incorporate your brand into life.

    Planning for failure

    Sad to say, but we all know most ideas fail. But if everyone in your company is so afraid to fail that they never try, you’re missing out on a wealth of brain power and ideas. To encourage creativity and problem-solving, create an environment where it’s ok to fail. This is not talking about laziness or sub-par performance, but rather genuine attempts to find a new way to solve a problem. When your company and employees allow time to fail, re-formulate, and try again, your customers win. Ultimately, failure is a part of improvement, so encourage out-of-the-box thinking once in a while.

    Breaking down the barriers

    These chapters focus on communication and inter-discipline collaboration. To make an out-of-the-norm connection with an idea, it would stand to reason that you would need to make an out-of-the-norm connection with a person or place. If people in your organization are holed up in their offices, behind their desks, with their computers, how are they going to encounter anything new? Break out of the silos! Encourage your employees to talk to each other and bounce ideas off each other. You may think that Marketing and Accounting have nothing in common, but you might be surprised to find that both of your clients face a particular problem. Don’t be afraid to interact with those outside your normal circle, both inside and outside the organization.

    I could go on about “The Medici Effect”, but I would suggest you take a look for yourself. It’s a quick, engaging read that’s well worth the while… and after you check it out, you’ll agree that you need a little creativity in Marketing.

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    I was pleasantly surprised with a promotion from Starbucks, the Starbucks Treat Receipt. If you buy any beverage before 2:00 pm, you can use the receipt to get any grande iced beverage for $2.00! Now, I’m a pretty avid Starbucks fan, so discounts are always appreciated. Of course, encountering any promotion always makes me wonder about redemption rates and the increase in sales. With a survey of one (me), I decided to do a little analysis on this Treat Receipt.

    Normally, my husband and I stop in at Starbucks on Sunday mornings. Let’s take a look at how the Treat Receipt has affected our behavior:

    Before Treat Receipt: $8 spent in the morning

    We each purchase a beverage and one or two pastries, making our average ticket about $8.00. We normally make this trip one time on Sunday, so our daily total remains at $8.00.

    First Treat Receipt: $8 purchase in the morning + $2 purchase in the afternoon = $10

    We received our first Treat Receipt with our normal morning purchase. We were excited to use the receipt, so we made an additional trip on Sunday afternoon, increasing our daily total by $2.00.

    Second Treat Receipt: $5 purchase in the morning + $2 purchase in the afternoon = $7

    However, after learning about the Treat Receipt, we changed our behavior. Instead of purchasing two separate beverages, we shared a single large beverage, thus decreasing our normal morning total by $3.00. We then utilized the promotion in the afternoon, which decreased our daily total by $1.00.

    I wonder how often people change their morning purchase based on their plans to take advantage of the promotion? I also wonder how many people already frequent Starbucks more than once a day and thus decrease their daily totals by utilizing the promotion? I’m sure the marketing gurus at headquarters have numbers to answer these questions. Average ticket amounts and cannibalization are important factors to consider when offering promotions to core customers. Clearly, the second scenario described above is the goal of the promotion. As I said, I only have a single data point, so my conclusions may be way off-base.

    On the other hand, what if the goal isn’t to increase the average ticket over the summer? There are many other qualitative goals that may yield future value. For example, I might not be willing to spend $5 on a beverage I’ve never tried. The Treat Receipt is a low-risk way for me to sample a drink that may become my favorite. The promotion could result in me increasing my average ticket in the future by getting me hooked on something new (and more expensive). The promotion goal may be to increase brand loyalty through more touch points. Each time I visit the store, Starbucks gains more face time, which builds trust and credibility. The more experiences I have, the more likely I am to have a good experience.

    With no numbers to back me up, I guess I’ll be content to ponder… with my grande Java Chip frappucino, of course!

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    Welcome to Musing Marketing, my foray into the professional blogosphere. I’m learning to view the world through a marketing lens, and I hope that what I see will inspire others to contemplate marketing. I am planning to post commentary, book reviews, and general interest items weekly. For now, I’m taking it one post at a time… enjoy your stay at Musing Marketing!

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