Ask the Customer, #@%$!#*%!

I am continually amazed by how many decisions get made at major companies without asking the customer. Part of being a data geek is realizing A) the limitations of qualitative research, and B) the more severe limitations of making decisions in a complete vaccuum from customer input.

Years ago, we were simplifying the instructions on a retail display to help customers use the display to select exterior stain colors. The head of sales wanted one set of instructions and the head of marketing wanted another. The product manager wanted a third. Using Harris Interactive's omnibus panel (a twice per week survey of 2000 people), we answered the question in about a week and a half for $6,000.  We also found out one or two other critical things for the money.

The research showed clearly that the product manager's language was preferred. Given that this was going to be a $280,000 modification to the display, I would say less than 3% of the cost was a justified investment.

Of course, in this case the head of sales overruled everyone and had his way anyway. Proving that asking the customer is important, but communicating the results effectively is paramount... and working with smart people is critical. A lesson I learned well that day.

So this week I'll be starting a project to ask a small group of our customers about a new project that Product Management is considering. I'll be careful to communicate the insights AND the limitations of the data. And I will be happy having any information at all rather than some pigheaded sales guy's gut feeling.

Of Squirrels and Baseball

Two great notes from this week:

1. A good (if "light") analysis posted by Adam Rosenberg in Online Media Daily about Web analytics and Moneyball.  The highlights: A) statistical analysis works well for baseball, a zero sum game, but even better for websites because all players within a market can win with better ROI, retention, relevance, sales, and so forth. B) data complexity increases exponentially and the landscape of the Web itself changes rapidly, causing difficulties in recreating the same analyses over time.

2. We got an ad for "LeafGuard" in the ValPak coupons. It had a picture of a squirrel in the gutter with the caption "My thoughts are in the gutter!" and the fine print, "Nice one, squirrel." We noticed it. The number one metric for whether your advertising is going to move the needle on awareness and purchase intent is whether the ad gets noticed. Differentiation (whether the ad makes you remember why to buy the particular brand) is second. All other considerations pale in comparative importance, so kudos to the LeafGuard people for an excellent execution.

You Know Your Marketing Is Good When...

Yesterday, I was running in the gym at work. I generally hate running indoors. I get bored, and I haven't yet found earphones that stay in while I run while retaining comfort and non-sweatiness. Consequently, I turned on the TV.

We don't have much in the way of daytime TV at work, so Montel was one of my best options. They had a segment about LifeLock, an identity theft prevention company. An ad came on after the segment, not surprisingly for LifeLock. Then another segment about LifeLock, with a different executive from the company. It was only after that segment, when I was beginning to get suspicious, that I realized it was a paid advertorial, AKA infomercial.

In the meantime, I learned a whole bunch about protecting yourself against identity theft, and I began to remember my accountant saying something about getting identity theft protection. Realizing it was an advertisement made me think about advertising's value to the customer.

This value is particular important in business-to-business marketing.  Some of the all-time best B2B advertising I have seen provided excellent insights to which I have returned time and time again, such as the simple but elegant paper from Sawtooth Software on choosing a conjoint methodology. The next time you start to create a whitepaper or seminar series, I say to stick to the LifeLock standard: would someone spend time on this information just for the value you are providing?

New Product Benefits Exposed!

I work for Vocollect, Inc., a subsidiary of Intermec Corporation.  Today, I'm excited about finding real evidence of a customer benefit we have had for years but never promoted. Why have we never promoted this benefit to customers?  Simply, until last year we never asked them what they cared about in purchasing a new technology solution. Market research revealed what problems are highest on the list of concerns in managing a warehouse. Therefore, we never asked ourselves whether our product provided any benefits in this area, preferring to focus our marketing on cost reductions and productivity increases. We missed millions of dollars in benefits to our own product because we did not understand the customer's concerns.

Data Geekitude is fundamentally about finding out what matters to your customers and your business so that you can re-orient your efforts towards those critical areas. Asking customers what matters to them is the first step.

"Cell Phone" Pricing

Think about your cell phone plan for a moment.  Do you have a fixed-price, all-you-can-eat type of plan, or do you have separate and confusing charges for every different type of call (international, domestic, in network, out of network, standing on your head) and service (text, data, text-to-data, data-to-text, video, videos with text, blah blah blah)?  Do you get warm, fuzzy feelings about your phone company when that bill is super confusing?

I am constantly astounded as to why business-to-business companies think that their pricing should be more confusing than their cell phone plans.  There is a reason consumers flocked to the Verizon flat-fee plans: they are easy to understand. Businesses selling to businesses should remember that their customers are, ultimately, human beings.  The more confusing we make our pricing, and the harder we make it to work with us, the less likely that those humans will want to do business with us in the future.

"But my company is the industry leader!" I hear you say. "Our customers will still work with us because we have the best products and services!"  And may I retort, "Do you really want to give your customer a reason to entertain 30 minutes with that new start-up because you are an unpleasant company with whom to do business?"  Why give the start-up competitors an opening?

This problem confounds me as I work through a new partner pricing program currently. I just hope our customers won't be more confused than I am already.