HOW TO TEST THE EFFECTIVENESS OF PROMOTIONS
There is much that market research can do to improve and to measure the effectiveness of promotions. So why is it hardly ever used in business to business markets? The reason, sadly, is money. A market research study, designed to improve the effectiveness of a promotion, may cost as much as the promotion itself. Understandably, many marketers question spending so much on intelligence gathering, preferring to suck it and see.
At the time of writing this paper we have just finished a piece of research that tested the effectiveness of a new brochure. The cost of the research was £7,000 – as it happens, equal in value to the cost of the brochure and the mailing. However, in this case our client believed that the research was justified because of the learning gained from the research and the value that this could have for other parts of the business. Also, the brochure was one of a series to be used in modified forms within the Group. The total spend on the promotion in all its variations could be closer to £100,000. Not least, our client was sufficiently far sighted to recognise that if the brochure was launched without market research and failed to draw business, it would not only waste the £7,000 incurred in the print, design and the mailing, it would also cost in terms of the business that was never won. Conversely, just a couple of projects won as a result of an effective brochure would pay many times over for both the cost of the brochure and the research.
Before I describe how market research can help test the effectiveness of promotions, it is worth thinking about how market research can be used to find out what will make an effective promotion in the first place. Most promotions are creative ideas (sometimes not so creative) developed by the client company or its advertising agency. Once the creative idea is born, it quickly becomes adopted and translated into the promotional device – the piece of literature, the advert, the exhibition stand etc. However, what if the creative platform is wrong to start with? Market research carried out at an early stage can generate the creative ideas for the promotion. These ideas are best generated by focus groups which spark debate and thoughts.
Of course, many business to business markets are limited in size with customers and potential customers scattered over a wide geography. In order to persuade 8 such people to sit around a table and join a focus group, there needs to be a local population of 50 companies from which to recruit. On the occasions (and there are many) where there are no such clusters, other options have to be considered. Face to face and telephone interviews provide suitable options for exploring creative platforms as they allow projective questions, open discussion and lots of probing. At this stage the emphasis is on good qualitative research that flushes out ideas.
Before a piece of literature or an advert is finalised, market research can be used to determine its effectiveness. It isn’t necessary to show the mock-ups to hundreds of people, 20 or 30 target respondents is a fair test. This number will spot if there are features that are failing in terms of interest, impact or clarity.
Comments such as these about the front cover of a new brochure would give a clear signal that some changes are needed:
“It is just two guys kidding around, posing. It is false. I don’t know what they are up to… It does not give any information.�
“It looks staged.�
“I don’t think a lot of the front cover. It’s too general like a lot of marketing literature. I get five pieces like this on my desk every day�
The same approach can be used to test intended adverts. In a recent project we had to find the most effective advert out of 6 possibilities. The research was carried out amongst a target audience of 100 buyers in businesses. The telephone was used in the first stage to recruit and qualify respondents. The next step involved the mailing out of the six adverts to each respondent and finally, a follow-up interview asked key questions:
o What are first reactions to the advertisements
o What are the “stab points� that jump out of the advertisements
o What are the advertisements saying to people in a general sense
o What is the clarity of the messages
o What are the benefits that are communicated by the advert
o How important are these benefits in the minds of respondents
o How effective are the ads in terms of being compelling (“stop-ability�), relevance, links to the positioning of the advertiser and clarity?
o What are the success of the advertisements in “calling the customer to action�
o Do respondents think anything is missing from the advertisements
o How clear is it what people should do next having seen the advert (i.e. how effective is the response mechanism and instructions).
Prior to the research being carried out, the client, on the advice of the advertising agency, favoured ad number 1 (see Table 1). In fact, ad number 2 was the outright winner. Also, ad number 4, proved to have good potential subject to one or two modifications though prior to the research this had been dismissed as boring by the agency.
Table 1 Findings From A Test Of Adverts Under Consideration For A Campaign
There is one further type of study that is widely used in consumer market research but hardly ever used in business to business markets because of its prohibitive costs. This is the pre and post research study in which interviews are carried out before a campaign (the “pre�) and repeated with a matching sample of respondents when it is over (the “post�). Questions are asked about awareness of products, the recall of adverts and associations with products. The differences in the results of the two studies show the effectiveness of the campaign. The sample size of the pre and the post studies need to be sufficiently large to ensure that any changes in the measurements really are genuine and not the result of a statistical quirk. Each of the studies requires a minimum of 300 respondents (500 interviews is more comfortable) which results in the research being too expensive for most industrial companies.
Part 3 of this White Paper will be published on Tuesday 1st August.
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