Behavioral Economics: Why Ask Why?

I recently returned from attending the Worldwide Conference on Qualitative Research in Prague.  There was a great presentation given by fellow researcher Wendy Gordon on the topic of behavioral economics, a field that looks into how people make choices.  Numerous experiments have shown that logic is not the only factor in making choices.  Rather, people’s choices are strongly influenced by:

  • The context (i.e., the comparison set, the other choices available)
  • Other people (what our friends and colleague choose)
  • The person’s mood at that moment

An important implication of the above: when we conduct research and ask people why they made a choice, respondents look for logical reasons even though the choice may not be completely rational.  That’s why we should consider asking questions such as “how,” “where,” “when” and “who” before asking “why.”  In other words, learn as much as we can about the decision-making process without respondents’ logical analysis of the process.

For example, let’s say we wanted to learn more about how people go about deciding to purchase exercise equipment.  We could ask people who recently purchased why they made that choice.  But we might obtain even more valuable results by asking potential purchasers questions about what else they might consider buying when considering the possibility of purchasing exercise equipment.  Or how many of their friends use exercise equipment, or go to the gym, or do nothing at all.  Or conduct an exercise asking respondents to describe the typical exercise equipment purchaser, then the typical gym-goer, then themselves.  We look for ways to get people to tell us how they decide without going into “rational mode” and telling us how they think they should be making the decision.

To find out how your prospects and customers make decisions, give us a call at (818) 752-7210.

Sources: “Making inspiring big theories into real chunks that have value,” Wendy Gordon, Worldwide Conference on Qualitative Research, May, 2010; Bureau West research

Multicultural Marketing – Avoiding the Pitfalls

Marketing to ethnic and cultural minority groups can be a tricky proposition.  Marketers may want to reach out to those groups, but run the risk of insulting people if the approach isn’t just right.  Some questions we’ve dealt with lately:  Should a bank create a website with financial information targeting African-Americans?   Should a chain of hardware stores run an advertising campaign targeting gay men and lesbians?

We know that minority groups like to feel represented in advertising.  But advertisers need great sensitivity to make sure they’re not perceived to be reinforcing stereotypes.  A recent article reported on several studies where children of immigrants didn’t like ads with incongruous minority images.  That is, when a member of their ethnic group or a symbol of their culture was shown out of context, or seemed to be arbitrarily “tacked on” to the ad, they reacted negatively.

In order to figure out how to best approach appealing to minority groups, marketers need to ask two simple questions:

  • What is important to people in that group?
  • What are their unmet needs?

While simple, these questions frequently get overlooked.  In looking at the answers to these questions in comparison to the answers of mainstream (non-minority) consumers, marketers can decide whether and how to best approach multicultural marketing efforts.

We find that focus group discussions (whether online or in-person) are particularly well-suited to elciting the answers to these questions and are preferable to individual interviews and surveys.  In individual research, participants tend to be more “politically correct.”  In a group discussion, however, once participants start to feel comfortable, they’re more likely to open up and tell us how they really feel.

To learn how your prospects and customers really feel, give us a call at (818) 752-7210.

Sources: Bureau West research; “Cents and Sensibility: Why Marketing to Multicultural Consumers Requires a Subtle Touch,” Knowledge@Wharton, March 03, 2010; How to boost your multicultural intelligence,” Quirks Marketing Research Review,  April 2010

How Customers Decide

Recent research has underscored the important role emotion plays in customers’ decision-making process.  Our rational brains typically have a very large amount of input to consider for every decision.  It can’t process all of that information quickly, and therefore uses emotion to come to a decision.  Science writer Jonah Lehrer says:

“Our emotional brain is actually much better at taking in lots and lots of information. Summarizing lots of data very efficiently, and saying, ‘Here’s a feeling. Don’t worry about all the details. Here’s a feeling. We’ve already taken those details into account.'”

A study at Harvard found that when people are either happy or angry, they’re more likely to make risky decisions than when they’re not feeling strong emotions.  Another study demonstrated that while people were more attracted to a supermarket display with many choices, they were far more likely to actually make a purchase when confronted with fewer choices.

For marketers, this means we should not ignore emotions. Market research frequently relies on rational answers.  However, focus group discussions can uncover people’s feelings.  This is done in a variety of ways.  We can make people feel comfortable to have a conversation where they say what they really feel and not just the answers they think are most appropriate (as soon as one participant opens up, that gives others “permission” to follow).  And we use specific exercises to get around rational, intellectualized answers, with techniques such as story-telling and metaphor elicitation.

To learn how your prospects and customers really feel, give us a call at (818) 752-7210.

Source: “Decisions, Decisions . . .,” CBS Sunday Morning News, April 25, 2010

Using Social Networks for Research

Much has been said about utilizing social media for market research, such as mining tweets for customer input.  But companies can use the concept of a social network to conduct market research more actively, with market research online communities (MROC’s).  Also referred to as “focus groups on steroids,” MROC’s consist of a large group of people recruited to a private online platform to participate in research activities over time.

Companies use MROC’s in a variety of ways:

  • Co-innovation: involving customers in the product development process.
  • Longitudinal input: obtain information over the whole course of the decision-making process, or input about product use over time.
  • Speed: since MROC’s are on-going, when companies need consumer input on a question, there’s no need to start recruiting research participants.  Answers can be available in days rather than weeks.
  • Identifying trends: participants recruited for MROC’s are engaged, creative types of people who tend to be at the forefront of trends.

MROC’s are usually comprised of a few hundred people.  They require an on-going commitment, since participants need to be kept engaged.  This is done with a variety of online activities, such as online discussions, photo diaries, blogs, contests and surveys.  And these online communities may actually save on a company’s market research expenditures, since all of the company’s formerly disparate research efforts can be folded into one ongoing MROC.

To learn more and discuss the best ways to obtain input from your prospects and customers, give us a call at (818) 752-7210.