Brand Positioning for Store Brands Require Research

When I was growing-up, we always bought name brand items versus the store or private-label items because the perception was that name brand items were of higher quality than store brands since they were advertised more in print and on TV.

However, recent studies by several consumer research firms show that people’s perceptions of store brands have changed.  Although store brand or private-label products still cost about 30% less than the name brands, it appears that it’s much less about price and more about value these days.

A study by Clarkston Consulting showed that nearly a third of major grocery and drugstore chain customers didn’t cite price as a factor in choosing store brands over name brands – it was more about loyalty and positive experiences at those stores. 

And store brands aren’t just cheap copies of name brand products any longer.  In fact, in some categories, the store brand is the most expensive item in the category, due to the positioning of store brands’ private labels as gourmet or specialty.  Even packaging sometimes distinguishes store brands with small changes such as re-sealable packages and listing the ingredients prominently on the front of the package.  Further, chain drug and grocery stores are actively promoting their own brands through aggressive social media site campaigns.

This shift isn’t just for people either.  According to a new study by MarketResearch.com, 49% of pet product buyers are buying more store brand products than national brands these days, since they feel that store brand pet products are as good as the national name products.

Of course the current economy is a factor in consumers trying store brands more extensively than before but also a regular program of brand positioning research makes these moves by store chains possible.  If the store chains weren’t confident in their brands’ competitiveness, based on brand research, they could miss a golden opportunity to get people to make the change from name brands to store brands.

Have you switched to buying more store brands than name brands?  Why?

Brand Research: J.C. Penney gets a Brand Lift for 2012

Forbes just named J.C. Penney to be the most interesting retailer of 2012. Why?  Well, J.C. Penney is re-vamping everything from their logo (pictured on the left), pricing strategy, to their top management. Looks like J.C. Penney invested in some brand research to revitalize their brand after sales kept falling from 2006 to 2011.
One of the main changes that will be implemented is a new pricing strategy-a 3 tiered pricing structure: regular prices, month-long specials prices, and clearance prices. “By setting our store monthly and maintaining our best prices for an entire month, we feel confident that customers will love shopping when it is convenient for them, rather than when it is expedient for us," says J.C. Penney's new CEO Ron Johnson (launched Apple retail stores). It's a bold move for any retailer to make, especially when coupons, and special sales and promotions are the norm for department stores. 
Their logo changed as well, and it's meant to remind shoppers of the American flag-my gut reaction is...not a fan. Hopefully J.C. Penney should do a little more testing on this because the online community reaction is pretty much negative.
As with any change, however small or extreme time can only tell if J.C. Penny will survive it's brand lift. These changes take effect today, but the whole transformation is expected to be completed in 2015. We'll just have to wait and see if this daring move is what J.C. Penny needs to gain success or fail.
Next time you're out shopping stop by your nearest J.C. Penney let us know what you think!

What do you think of their new logo and brand strategy? Hit or Miss? 

 

Marketing Research Drives Customer Engagement in Social Media

Social media marketing is no longer a trend – it’s a fact of marketing life and one of the most effective marketing tools to come along in years. Platforms like Facebook and Twitter enable customer engagement in a way and at a level that most companies haven’t imagined in their wildest dreams – and as any market research company will tell you, customer engagement is the cornerstone of customer loyalty. While most companies are still struggling to find effective ways to use these new platforms, others have launched campaigns that gained them customers, increased their profits and sent customer loyalty ratings skyrocketing. The difference, in most cases, is the quality of the marketing research done before launching their campaigns.
If any industry has embraced social media marketing to drive customer engagement and customer loyalty, it’s the coffee industry. Coffee giants Starbucks, Dunkin Donuts and Green Mountain Coffee Roasters all boast Facebook pages with 27 million, 5 million and 500,000 Likes respectively. A deeper look at the statistics, though, suggests that the numbers really don’t tell the story about customer engagement.
Green Mountain Coffee Roasters based its social media strategy on marketing research. Before mounting its social media campaign, the company employed customer satisfaction surveys, marketing surveys and online research tied to its retail coffee website to determine what would get – and keep – its customers talking. The results speak for themselves. An engaged customer is a loyal customer, but engaging your customers isn’t always as easy as you’d think. A good marketing research company will work with you to identify your customers’ priorities, evaluate customer satisfaction and provide you with the information you need to drive customer engagement.
And once you get your customers engaged and talking with you, they’ll talk about you to everyone they know. That’s what customer loyalty is all about.
 
In what ways do you engage your customers or people overall?

Customer Satisfaction Research and the Cruise Industry

Sometimes it takes a disaster to show how companies deal with crisis situations.  In the aftermath of the Costa Concordia cruise ship tragedy, the industry association TravelAlliance reported that 37% of travel agents report being contacted by clients booked on 2012 cruises.  Of those customers, an estimated 10% have expressed interest in canceling their voyages.

In the cruise industry, January is known as ‘Cruise Wave Month’, the biggest booking month of the year for cruises.  Although 20% of travel agents reported that the incident has negatively impacted their bookings, 68% say it has had no noticeable impact on their bookings so far.

So, who should be assuring customers that cruising is safe?  And what should they be telling them?  The phenomenal growth of the cruise industry has had a lot to do with the public’s perception that cruises are safe and hassle-free, however, does this incident show that perhaps cruise lines are more concerned with providing the best customer experience (satisfaction) with a cruise instead of the safest customer experience?

Since 70% of cruises are booked through travel agents, they are the group that consumers look to first in times of crisis.  Surprisingly, instead of cruise lines publicly touting the actual safety record for the industry, most have chosen to remain silent, thrusting travel agents into the role of ‘crisis managers’. 

Although Carnival Cruise Lines issued a statement assuring passengers that the line was safe, most industry insiders saw this as a rather weak response to a horrific incident.  At this time, the number one concern is the safety of cruising in general – especially among first-time cruisers.  Carnival has decided to go another route by suspending its broadcast, digital, and direct mail marketing for its namesake line, Carnival Cruise Lines, for an unspecified amount of time.  Are they more concerned with their brand than their customers?

And the impact of this incident won’t solely be felt by cruise lines. Citigroup is forecasting a 6%-10% decline in cruise bookings following the disaster. The ports that cruise ships frequent will also feel an economic downturn if consumers, not content with cruise lines promises of safety, decide to put off or cancel cruise plans.  This includes everything from hotels to eating establishments to gift shops in the ports.

The cruise industry is counting on consumers’ short-term memory to get through this crisis, but will that memory lapse continue?  Already Seattle, a major port for West coast and Alaskan cruises, is fearing a ‘ripple’ effect that will significantly dampen the area’s economy.

So, could a basic, annual customer satisfaction survey have helped ‘control’ this incident?  Probably not.  But could a regularly-conducted customer satisfaction tracking research program have helped?  You bet! 

Knowing what to do in the wake of a crisis by quickly gauging and addressing consumer concerns through research is a function of a good customer satisfaction program that companies can ill-afford to be without,  since there are very few industries that are immune to crisis. They may not be fatal as this one was, but if not handled correctly, it can still lose customers if there’s not a plan in place to react to these types of disasters. 

An on-going program of customer satisfaction research that tracks consumers’ perceptions and concerns will be invaluable in reacting to unforeseen situations since the research will have shown what customers expect and that can be translated into immediate, actionable plans to address those expectations.

Did the Costa Concordia sinking change your opinion about cruising?

Did the Costa Concordia sinking change your opinion about cruising?

 

 

 

Customer Satisfaction: Online Shopping vs. Brick and Mortar Retailers

Forbes ran an interesting article a couple weeks ago about some surprising customer satisfaction results from last Christmas's shopping season. It seems that holiday shoppers are increasingly coming to prefer shopping online to shopping at brick-and-mortar retailers. 

Quoting a Motorola study, they found, in most areas, online shoppers expressed dissatisfaction with online retailers roughly half as often, or even less, than with a physical store. Shoppers especially don't like standing in line: 42% of in-store shoppers complained about the checkout process, versus only 15% of online shoppers.

One thing the physical stores definitely need to work on is their item availability. 41% of shoppers were unhappy with item availability in a physical store, versus 20% online. Unfortunately, the survey doesn't say how many online shops they tried. After all, there's a much larger opportunity cost in driving across town to Target because Wal-Mart was sold out, versus clicking around from one website to another. 

So that got me to thinking, what else could be behind these numbers? After all, there are pretty clear and obvious drawbacks to online shopping as well. It takes days to get your purchase, it might get waylaid in the mail, and even the Motorola study showed that people were still much more dissatisfied with the online return process.

But let's remember, we're talking about holiday shoppers. Outside of black Friday (or Boxing Day if you're outside the US) there are few periods of time more stressful for shoppers. The noise, the crowds, the insane parking lots, the long checkout lines, the occasional knock-down, drag-out fight over this year's hot toy... no wonder these customers were grumpy!Compare that to the experience of kicking back with a hot cup of cocoa and browsing Overstock.com or Amazon.com, and it seems to me we're talking about people who are already going to be predisposed to enjoy their shopping experience.

No wonder then that Amazon came up with a particularly clever\nasty way of poaching customers from physical stores. They offered a 5% discount to anyone who scanned the barcode of an item in-store using Amazon's app and then bought it from them online. Add in Amazon's free shipping and two-day shipping promotions, as well as Amazon's lack of sales tax, that makes it hard for retailers to compete. Retailers are already accusing Amazon of using physical shops as their own sales floor.

That, in a nutshell, is the problem for physical shops. People are going into stores, not buying anything from them, and increasingly buying using their mobile devices instead. If they are stressed out and dissatisfied with the shopping experience, they have no loyalty that would keep them from buying from Amazon. 

If stores think they can compete on customer satisfaction, they need to really compete on customer satisfaction. It may be that in this brave new digital world, the way forward for the brick-and-mortar store is actually the way back, to the relaxed and enjoyable shopping experiences of old. At any rate, doing things the way they have always done them, retailers are bound to lose.

What have your experiences been shopping online vs. retail stores? Which do you prefer? 

 

 

Customer Satisfaction Research vs. Advertising

For years, companies have relied strictly on advertising to bring in and retain customers but it appears now that customers may respond as well to marketing research as advertising to keep them satisfied with a company or brand.

A recent study conducted by the research firm, Cint, found that 62% of consumers are more likely to purchase a product if their opinion has been sought by the brand and 56% of those polled felt more loyal to a brand if it takes the time to find out their opinion.

Further, 70% of respondents stated that they felt brands act on marketing research results and 77% felt that brands listen more to what consumers want now than they did ten years ago.

This goes against conventional wisdom that advertising was one of the only way to reach and retain customers when in fact, just asking them how they feel and then acting on it means much more to them.  This should not be a huge shock since with the advent of social media, companies’ Facebook pages have become ‘sounding boards’ for customer likes and dislikes.  With the proliferation of online shopping sites, it doesn’t take much for a consumer to switch brands if they feel that their feelings are being ignored.

Using comments on a social media site will never replace customer satisfaction research, but they are excellent ‘barometers’ on consumer opinion and can act as an early-warning system that more detailed customer satisfaction research may be called for. 

What influences your perception of a brand more – a slick ad or the company asking for your opinion?

Swiss Cheese and Marketing Research

We all know what Swiss cheese is – the cheese with the holes.  The holes, which are naturally formed during the fermentation process, allow air to pass through the cheese, giving it a distinctive taste and consistency.  In this case, holes are expected and good but when conducting marketing research, unexpected holes are bad.

‘Holes’ occur in research when at some point in the research process, someone either forgets to include something or wants to add something after the project has started.  ‘Holes’ can also occur if the wrong sample is used or analyzed incorrectly, making the data unreliable.  And unreliable data is worse than no data at all.

To ensure that your research process doesn’t end-up like Swiss cheese, it’s best to include your research provider from the ideation stage to the project’s conclusion.  For the client, the opportunity for the research provider to be in the planning sessions for a project not only ensures that there won’t be any gaps or miscommunications during the planning phase, but also will relieve any doubts about the conclusions.

There is a lot of talk – and evidence of – companies conducting their own research.  As easy as it seems, most small to middle-sized companies just don’t have the experience or research expertise to do the job right.

There are some projects that only require responses from the general public, regardless of their age, sex or income/education level, but those projects are few and far between.  The truth is that most research projects need to contact a certain segment of the population to get their questions answered correctly.  Obtaining the correct sample is only a part of the process – designing the questionnaire, performing analytics on the responses and drawing conclusions are equally, if not more, important to the project.

So, in conclusion, holes in cheese are good; holes in research are bad.  If you want to make good cheese, use an experienced cheese maker, since that’s their business.  If you want good research, use an established research company, since that’s their business.

Have you ever been involved in a project where unexpected holes emerged and how did you deal with them?

 

WSJ: Survey Research breeds Feedback Fatigue

Last week (1/7/12), The Wall Street Journal reported on a phenomenon that they coined "feedback fatigue."  According to WSJ, "With emailed appeals for comments on commonplace transactions and customer-service calls that beget requests to take a survey, consumers are being pinged for opinions at a rate that has gotten some publicly grousing about a surfeit of surveys."

The combination of do-it-yourself survey technology, social media and ecommerce has combined to make information about customers available to any sized firm.  Additionally, it allows firms to reach out to consumers nearly constantly.  Any contact, every transaction - and even lack of contacts - can trigger a request for feedback or information.

As a marketing research professional, this gives me several concerns.  First is the shear number of bad surveys that are being conducted.  Surveys that are too long, with badly designed questions, that frustrate respondents not only generate bad data, but also convince people to swear off completing any surveys.  Response rate are already very low; what will happen if we continue to scare off potential respondents?

(From the WSJ article: Response rates have been sinking fast in traditional public-opinion phone polls, including political ones, said Scott Keeter, the Pew Research Center's survey director and the president of the American Association for Public Opinion Research. Pew's response rates have fallen from about 36 percent in 1997 to 11 percent last year, he said.)

As a customer satisfaction professional, I am delighted to see so many more companies attempting to collect information on the satisfaction of their customers.  I believe this is a key metric of business health, and I believe that all businesses should do this on a yearly basis.  Again, from the WSJ article, "... questionnaires have percolated into such professional settings as law firms and doctor's offices and become de rigeur for even everyday purchases." But with so many companies undertaking this effort on their own, I wonder how much value is actually being driven from this information.

And my final concern with this is the vast amount of information that is being given voluntarily through social media channels.  As my friend and social media expert Toby Bloomberg of Bloomberg Marketing and the Diva Marketing Blog asks: "Is the same thing happening with companies that conduct research under the guise of "crowd sourcing?"  What has always bothered me about these platforms is people give freely of their intellectual capital without even a thank you or acknowledgement back ..most of the time."

As marketing researchers and marketers, we should keep in mind that survey and marketing research is a representation of our brand, our companies and impacts the way our customers and potential customers view us and their relationships with us.  My rule of thumb has always been to collect only information that has a clear business action associated with it. And if the action is significant enough to justify research, you should spend the money to make sure the research is done correctly and that you get high-quality and reliable results.

These days, everyone CAN conduct marketing research.  But it does not necessarily follow that they SHOULD conduct marketing research.

What do you think?  Are you doing more or less marketing research - and why?

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Funny Place Names Don't Need Marketing Research

Today's blog has nothing to do with marketing research.  Its only relationship to customer satisfaction is that I hope it makes you smile.  Sometimes, humor is enough.

I have a colleague who HATES King of Prussia, PA.  She's never been there, and she'll never go there.  The name alone is enough to turn her off.  We've pointed out that King of Prussia is a suburb of Philadelphia and actually, a pretty nice community, but to no avail.  She hates King of Prussia and that's all there is to it.  

I have another colleague who lived in Picayune, MS.  I always thought that sounded pretty funny because it reminds me of my Grandmother saying, "Now, wait just a picayune minute!"  But then I grew up in Canandaigua, NY, a name so incomprehensible that we had it as a fourth-grade spelling word!  (The Chamber of Commerce claims that it means "The Chosen Spot" in some Native American language.)

So what about you?  Is your town's name as good as Cool, CA?  Or as silly as Punkeydoodles Corners, Ontario, Canada?  (Oh, those wacky Canadians!)  So read this list and choose your favorite.

Thanks to Reader's Digest for this list of funniest place names.  

Places you want to live 
Cool, California 
Beer, Devon, England 

Disco, Tennessee
Fear Not, Pennsylvania 
Rest and Be Thankful, Argyll and Butte, Scotland Surprise, Arizona 
Climax, Pennsylvania 

Places you may not want to live 
Accident, Maryland 
Arsenic Tubs, New Mexico 
Dismal, Tennessee 
Double Trouble, New Jersey 
Moron, Mongolia 
Satan's Kingdom, Vermont 

Delicious places to see 
Bead Loaf, Vermont 
Hot Coffee, Mississippi 
Clam, Virginia 
Egg, Austria 
Toast, North Carolina 

Cute places 
Cabbage Patch, California 
Silly, Belgium 
Sweet Lips, Tennessee 
Polkadott, Ohio 
Punkeydoodles Corners, Ontario, Canada 

Places where the animals go 
Bumble Bee, Arizona 
Chicken, Alaska 
Porcupine, South Dakota 
Doghouse Junction, California 

Scary places 
Eek, Alaska 
Frankenstein, Missouri 
Hell, Michigan 
Hurt, Virginia 
Monster, Netherlands 
River Styx, Ohio 

Questionable places 
Why, Arizona 
Whynot, North Carolina 
Who's Thought It, Texas 

Do you know of any other funny place names?  Please share!

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Employee Satisfaction: How to Show Them You Care

Earlier this week, another of our Polaris editorial team, Danica Kwon, explored the idea via her blog that your employees are also your customers.  Some companies may dismiss this but others take it to heart.

Want to know what companies are listening?  Recently, Glassdoor.com published a list of the best places to work. Glassdoor.com is a website where employees can anonymously post comments either for or against the company where they work and is used extensively by job hunters and occasionally by HR Departments.  In 2012, the companies making the Top Ten included McKinsey & Company, Facebook, Google, CareeerBuilder, REI and Trader Joe’s. 

Want to know how they got there?  It’s because they DO treat their employees like customers that they want to keep.  Apart from workplace amenities such as free gyms, on-site day care and subsidized cafeterias, there are other things that companies can do that won’t cost them much but will go a long way in garnering employee satisfaction.

An easy example is Best Western hotels who publicly recognize their employees via their social media sites.  This is an inexpensive but effective way to build employee morale in ‘real time’.  Another excellent website, Mashable, came up with several other cheap but very effective ways to keep your employees happy.  One easy way is to make sure your company website reflects all your employees – from the top down.  Another way is to share iTunes playlists among employees. 

And one that is becoming more and more important, letting employees work ‘in the cloud’ occasionally.  During last year’s ‘Snowmageddon’ that most of the country experienced, forward-thinking companies had already set-up systems that allowed employees to work from home which resulted not only in greater employee morale, but also, no loss in production for the company.    

As a contrast, think of the companies that didn’t even make the Top 50, such as Coca-Cola, UPS and Georgia Pacific.  I wonder if they know they have an employee problem?

An excellent way to make sure that you're treating your employees as well as you treat your customers is by conducting regular employee satisfaction surveys.  But one caveat, employee satisfaction surveys only work if the employee feels that the feedback they give will be at least evaluated by management, if not acted upon. 

A company that conducts these surveys ‘for show’ but with no apparent action, will find out fast that subsequent surveys will reflect the employees’ doubts that anything they say will be listened to.  And unsatisfied employees are as big, or a bigger problem, than unsatisfied customers – but both can sink a company.

Are there any good examples of ways your company shows appreciation to it’s employees?