Guest blogger Judy Wang is a researcher at the Customer Contact Council, a sister program of the Market Research Executive Board. 

Recently, the Harvard Business Review published an article introducing the “Wallet Allocation Rule.” As the name suggests, this new metric measures the share of wallet that is allocated to companies – or simply, how a customer divides their spending among a company and its competitors.

The theory behind this metric is simple:

1. think about how much your customer prefers your company, and then
2. consider the number of competitors your customer is choosing between.

Knowing these two things will let you understand how your customers spend money, and how your company is doing relative to others. For instance, if you were the customer’s first choice and there is one competitor, then your position is different than if you were the second choice but there are many, many others behind you. Understanding this difference can help define strategy and hone in on certain initiatives.

To me, the key lesson that stood out in general is that metrics can’t be evaluated in a vacuum. It’s nice to know that your company is performing well, but when you discover that the “well” is less well than your competitors, the story changes. It’s important, then, to understand performance in its broader context.

So take customer effort for example. Even though the Customer Effort Score is the best predictor of customer loyalty, merely measuring it in isolation can paint an incomplete picture. More than just evaluating the score by itself, it’s important to consider the context surrounding it.

• How does the score stack up against others in your industry, your geography? (CCC members, use our interactive benchmarking tool to understand how your peers are performing. )
• Does the score change or remain static over time? (Track your score and compare against past performance.)
• What are the causes to a high effort score, and why do they exist? (Craft good survey questions to understand what about the interaction was creating effort.)

More than just a static number, the Customer Effort Score can reveal a lot about your company and your performance if you analyze it in context.  To the point made in the HBR article, you aren’t getting the whole story if you aren’t looking at the context.

Related MREB Resources:

• Driving Action with NPS® and Other Loyalty Metrics: Focusing on Key Success Factors
• Ask your peers for their opinions on metrics on our Primary Research Forum
• Get vendor recommendations from our Supplier Feedback Forum

By Anthony Bell

Today’s technological world of social media, cell phones, blackberries, iPads, and laptops makes achieving a “work-life balance” increasingly challenging for senior executives. A basic first step, according to Indiggo Associates, is “not stressing over work during downtime and not worrying about the downtime that we are not having while at work. According to the Corporate Leadership Council, companies that effectively manage their work-life proposition can improve employee discretionary effort levels by 21% and increase employee intent to stay by 33%. Interestingly, employees don’t necessarily have to use work-life practices to generate positive returns for the organization. Awareness of the work-life proposition is, in fact, slightly more important than consumption of it. Research Managers can take advantage of this idea of awareness by being a career coach to staff. Traditional approaches to career planning are too narrow to accommodate the ever changing employee. By expanding the scope of career progression and formalizing opportunities beyond the function, managers can motivate high-potential researchers.  Research should create specialty career tracks that introduce new opportunities in evolving research function.  We’ve also seen leading companies  encourage rotations outside of research to lower attrition rates. Who would’ve thought that doing the counter-intuitive thing actually STRENGTHENS your team?

MREB Members, take a look at our Career Planning and Evaluation Resource Center to help tie performance criteria to business impact and expand career opportunities.

The buzz around data analytics has been steadily increasing as technological advances make it possible to track,store, and model more and more information, and as vendors pop up based around those services. What are the implications of this buzz for insight functions? How can we take advantage of new capabilities, but without drowning in data?

Conversations with members have raised challenges and lessons around organizing analytics resources – both in terms of organizational structure and incorporating it into research projects.  A few of our interesting findings:

• Don’t forget the business acumen: Business acumen, quantitative skills, and technical skills are the key skills required in this team. Business acumen, in particular, stands out as an underappreciated skill within analytics groups.
• Consider “buying” specialized quant skills: A high degree of business acumen, coupled with competence in quantitative analysis and basic technical skills, makes a good analytics team member. Specialized quantitative skills can be “rented” from external vendors.

Learn more about organizing and staffing an analytics team.

• Don’t analyze in isolation: Although analytics can produce some value when done in isolation, combining it with other market research sources is more impactful. Alone, it lacks visibility into consumer psychology, limiting its use for consumer insight.
• Integrate people, not methods: Instead of trying to integrate the analytics methodology with other primary and secondary methodologies, integrate the people responsible for different methodologies.

Learn more about integrating analytics with other methodologies.

By Anthony Bell

Emerging markets will certainly be the driving force behind any growth in consumer demand across the next decade. The Economist Intelligence Unit’s five-year compounded growth rate for 2014 to 2020 shows that average private consumption per country in the BRIC group could quadruple to surpass those of the G7 nations, and shows that total private consumption in emerging markets will likely triple its current level to match the G7 countries in 2020. Although most of the growth will come from elsewhere, rich world consumers will still undertake the lion’s share of global spending across the next 10 years. The chart below shows that, on current trends, the U.S. will still be home to the world’s most active consumers in 2020 but that China, India, Russia, and Brazil will all have joined the top 10.

Chart 1: Top nations by consumption, 2009 and 2020 Economist Intelligence Unit, Corporate Executive Board Research

This means that firms should continue to pour time and effort into understanding and operating in emerging markets, both the obvious ones, such as the BRICs, and some of the less obvious (Indonesia, Chile, and Thailand for example). But they shouldn’t neglect their developed-world consumers, who will still account for a high proportion of firms’ revenues. These consumers’ tastes might change over time but they’ll still reward firms handsomely for providing good products and services at the right price.

It is difficult to make an accurate one-year projection, let alone an accurate 10-year projection but Research has become adept at identifying important market changes. The challenge is, however, while Research is the voice for insight into future market conditions, we struggles to drive stakeholder action. Progressive research organizations have shifted trends conversations away from abstract mega-trend ideas to more vetted market opportunities that provide better context for business decisions. Instead of boiling the ocean, with a broad net across the market, refocus your change-sensing efforts to identify a manageable number of new opportunities grounded in analysis of the company’s market share. A customer driven scenario ranking grid is a good way to prioritize potential scenarios’ likelihood based on customer views to ground discussions around market scenarios’ probabilities rather than internal perceptions. Research will be in the driver seat as company’s pay more attention to emerging markets in the next decade. We just have to make sure we deliver on the right opportunities, rather than mega-trends, to provide line partners with the confidence and context necessary to act.

This week’s guest blog comes from our sister program, the Marketing Leadership council. Take a look at the latest survey data examining Business to Business purchase decisions and drivers.

It used to feel like a consultation – customers calling you early on asking how you can help them. Now it feels more like scratching a lottery ticket at the end of the buying process, knowing you can’t alter what’s printed under the security coating – you’ve either been chosen or you’re not. This year, we have heard repeatedly from our members that the B2B purchasing process feels increasingly out of their hands as customers shifted to doing much of the research and comparisons on their own, turning to suppliers only very late in the game. Informally, our B2B members feel that 70% (or thereabout) of the buying process is completely out of their control, and they’re grasping onto the tail end of the purchase process which used to be much more malleable. Is that fear warranted? Read More »

Our guest blog this week comes from an earlier post by Josh Kimball from Iconoculture, a sister program of the Market Research Executive Board discussing a new macrotrend of people reprioritizing what they buy.

’Tis the season of buy, buy, buy. But more and more people are asking Why, why, why? It’s in trying to answer this question — what’s the why behind the buy? — that Iconoculture recently launched a new macrotrend, one we call Mindful Matters. The idea underpinning this macrotrend is that people are mindfully re-prioritizing what they buy, who they do business with and even how they live. They’re adding “simplicity” and “manageability” to their personal wishlists instead of iPods or flatscreen TVs.

For Iconoculture, macrotrends are a way of talking about why people make the decisions they make. And expressions of Mindful Matters play out differently depending on one’s cohort. In Iconoculture’s annual quantitative values survey, we saw that Boomers especially had embraced simplicity: They identified with the top end of the simplicity scale, defined as “I strive to live a simple and uncluttered life,” more than any other demographic group did (Wave 1, 2010).

Of course, slower living isn’t a phenomenon that’s only about Boomers. As we’ve seen in such observations as the Great American Apparel Diet, where people commit to abstaining from buying clothes for a year, Millennials have their own way of more closely considering their purchases. Nor is the idea nation-specific. We’re tracking similar examples around the globe.

For many people feeling the pull of Mindful Matters, this marks the beginning of a more considered, maybe slower life. But for marketers, that shift in people’s values means change is afoot — and it’s happening fast.

By Anthony Bell

A recent article from Technology Review examined how some companies are using predictive analytics to help forecast and influence purchasing behavior. These sophisticated computer algorithms link consumer patterns and identify potentially predictive relationships, but companies are still practicing restraint.

MREB View: This technology is certainly useful but (obviously) only as good as the data you select to input and your response to the outputs. Our members have found simpler prediction technology useful (Best Buy is one example) that relies on smaller but more pertinent data sets. Members also use numerous techniques to help them better understand key customers before turning to masses of data.

MREB Members, See How Lego brings in customers to inform the new product development process without jeopardizing process efficiency.  Access our Predictive Modeling and Analytics event replay to learn how Jay Dittmann, Vice President of Marketing Strategy at Hallmark, leverages marketing analytics to gain insight into customer purchasing behavior. 

According to a recent Reuters article, a few data-loving economists in key positions of the US government are pushing new metrics to provide a more clear picture of the country’s economy.  Considering that the model used to compute GDP, the US’s primary economic indicator, was created in the 1930s, many in the Treasury, the Commerce Department, and other agencies believe that the government needs a better understanding of how people work, live, and feel to make better policy decisions.

At the center of this push is Assistant Secretary for Economic Policy Alan Krueger, who, before his appointment, was an academic focusing on time use studies.  He and other “Data Dogs” believe that understanding what Americans do every day and how they feel about those activities will allow them to assess economic trouble spots more quickly.  Read More »

The July/August issue of the Harvard Business Review features an article from our sister program the Customer Contact Council: Stop Trying to Delight Your Customers.  Their research shows that in the contact center, “delighting” the customer yields only marginal additional loyalty. 

They also found that customers are four times more likely to leave a service interaction with the contact center disloyal as compared to loyal, and the primary thing companies can do to mitigate this disloyalty in the service channel is to focus on reducing the effort customers must put forth to get their issues resolved. 

Read More »