Archive for the ‘Paul Hague’ Category
BIG, the Business Intelligence Group, in conjunction with the ICG, is hosting its second Northern forum of 2013 in Manchester on 5th June. The event, entitled ‘Look underneath your nose’, is all about using a little bit of imagination and insider know-how to get a head start on your research requirements. In short, there is an enormous amount of intelligence out there at little or no cost, if we only look for it.
The guest speaker is B2B International founder and director Paul Hague, and we love that the event is marketed as the chance to “hear one of the most seasoned (pickled?) market researchers on the planet” speak of his experiences about getting information for next to nothing. What more can we say?!
If you’re interested in attending this event – and why wouldn’t you be? – it could be the best £5 you’ve ever spent! For more information, please visit the BIG website.
If, like me, you are sitting in the UK, running a market research business on three different continents, it can feel like you have an average body temperature but it is made up of a foot in the fire and the foot in the fridge. The fire and the fridge are the markets of North America and China.
B2B International entered the US and Chinese markets six or seven years ago. Both countries are important to our organisation; as an international business-to-business market research company, we know that we have to have a foot in each camp. Indeed, we had being doing business in both countries for many years prior to this, but always remotely. We sent people from the UK or commissioned partners in the respective countries to carry out the interviewing. However, we knew that if we really meant business in these countries, we had to set down roots there.
These nations are surprisingly similar in physical size at 3.7 million square miles (nearly 6 times the size of the UK). In population, China wins hands down with 1.3 billion compared to 314 million in the USA. In economic terms, it is the US that dominates, with a GDP of $15 trillion per annum compared to $7.3 trillion for China. However, I am just playing with figures and the fact remains that both these countries are giants on the planet and forces to be reckoned with for market researchers.
Setting up a business in each country was relatively easy. We had to be a little careful as to how we defined our business in China because market research companies are looked at with some suspicion, if only because in theory they could carry out social and political studies, which are somewhat frowned upon. In our specialised niche of business-to-business market research this was not a problem. The US had no such restrictions and establishing a business required some form filling and administrative niceties but not much more.
Once we had a physical presence in each country we began to seriously address them as local markets, promoting our services as a supplier of b2b market research. It was at this time that we were struck by the huge differences between the countries. The USA is the home of market research. It began there in the early 1800s, and by the early 1900s the fledgling market research industry had started focusing on advertising testing in one form or another. The industry arrived on the European shores in the 1920s and 30s but it didn’t make it to China until around the year 2000. Not surprisingly, the US market for market research is many times bigger than that in China and much more mature.
The attitude to market research in the two countries could not be more different. In the established market of the US, where a large number of managers have a formal business education, it is accepted that major business decisions must be underpinned with objective data. It is not unusual for a relatively small US company with revenues of only $20 million per annum to commission a market survey costing $100,000. In China it is not unusual for a company with revenues of $2 billion to thumb its nose at spending $20,000 on a market research project. No doubt Chinese companies will modify this view as they find they cannot compete on product and price alone. They will be forced to become more sophisticated in targeting their audiences and understanding them more fully. This may take a few years and in the meantime a good deal of the market research commissioned in China will be by Western companies wanting a deeper understanding of how they can build their businesses in that country.
The implementation of research in the US and China is very different. In China there is a gulf between the massive cities and the rural hinterland. People are not yet forthcoming with their views and opinions and, as a result, the answers to market researchers’ questions can sometimes be a little on the thin side. On the other hand, most Chinese people will still spare the market researcher the time of day in contrast to the US, where it is almost impossible nowadays to get anyone in a large company to answer their phone rather than let it ring through to a voice message.
Paul Hague, founder of B2B International
How do emotions drive the choice of a supplier and how can we measure them?
As business-to-business market researchers, we are inclined to believe that decision-making by buyers and specifiers is entirely rational. When has a buyer ever admitted that he or she chooses a supplier saying it’s “because I like them”? When has an engineer ever said that he or she specifies a supplier “because they make me feel important”? They usually tell us that their choice is driven by the quality of the product, the price, the speed of delivery and so on. And yet, many companies have suppliers that have been in place for years and years. Surely there must be something else influencing buying decisions?
So what is going on? Maybe we are wrong in believing that the buying decision is entirely rational. We know that emotions play an important part in consumer markets, and we know that people don’t leave their emotions at home when they go to work. How much of the buying decision is influenced by emotions? It is hard to say, but some people argue that it accounts for up to half of the decision—even in traditional business-to-business markets.
If we assume that emotions do play a significant role in influencing the buying decision—and perhaps a larger role than we have previously admitted—then we must find some means of measuring this. The brand of a company is where we are likely to find most of the emotional repository because brands create an expectation and expectations carry with them a great deal of hope and promise. This is where emotions come into play.
What does this mean for us as market researchers? The starting point is to consider words we can use to measure emotions. Colin Shaw, the author of The DNA Of Customer Experience, suggests twelve positive emotions and eight negative emotions that can drive customer experience. He then places these into four groups which influence actions: advocacy, recommendation, attention, and destruction (see Figure 1).
Figure 1: Hierarchy of Emotional Value
Figure 1: Hierarchy of Emotional Value
please click on the image to enlarge
We researchers can measure the association that somebody has with these words and a brand to establish where it is strong and weak. In effect, we are generating an “emotional signature” which can be compared with other signatures. In Figure 2 below, the emotional signature for the company is the vertical bars and that of the competitors is the line graph.
Figure 2: Emotional Signature
Figure 2: Emotional Signature
please click on the image to enlarge
After years of research in which we have asked thousands of people why they choose certain suppliers, we are convinced that there is a great opportunity for finding out more about the emotional drivers of the buying decision. In doing so, we believe it is possible to gain a great competitive advantage. It will help you improve your customer satisfaction, raise your Net Promoter Score, and build market share.
Contact Paul Hague: email@example.com
In this week’s Business Surgery, Paul Hague offers an interesting slant on the quantity vs. quality debate.
An article caught my eye in the Financial Times recently (24th July 2012). It was by John Kay and called The Parable Of The Ox. It told the story of how, in 1906, the great statistician Francis Galton observed a competition to guess the weight of an ox at a country fair. Eight hundred people entered. Galton, being the kind of man he was, ran statistical tests on the numbers. He discovered that the average guess (1,197lb) was extremely close to the actual weight (1,198lb) of the ox. This story was told by James Surowiecki, in his entertaining book The Wisdom of Crowds.
This got me thinking. We all know that 1 million people can’t be wrong – or can they? It seems that in general they seldom are wrong. In the latest copy of the International Journal Of Market Research (volume 54, issue 4, 2012), Martin Boon of ICM Research wrote a paper called Predicting Elections in which he reported on the accuracy of response to a question which asked people what they thought would be the percentage share of the vote given to each party in the forthcoming general election. This was not a question about which way the respondents themselves would vote but a “wisdom of the crowd question” about how they thought others would vote. Without any prompting from the interviewer, a spontaneous prediction was extremely close to the actual result (within 2.2%). Just as people got the weight of the ox right, they correctly predicted the outcome of the general election.
So what does this mean for us in business to business research? It should mean that if we ask informed people what they think is the size of a market or what they believe to be suppliers’ market shares or something of that ilk, we ought to get a fair prediction of actuality. I suppose the emphasis must not be on the word wisdom but on the word “crowds”. In the parable of the ox story and in the ICM survey there were many hundreds of respondents. We need to ask enough people to be able to get a fair prediction. And this may be the problem in business to business markets – often there aren’t many people who have this sort of knowledge. Maybe in business to business markets what matters is not relying on the views of lots of people who have no idea but finding just one person who is in the know.
In this week’s Business Surgery, Paul Hague looks at how we make decisions – and particularly how much of an influence a strong brand plays in the process.
At the heart of good marketing is persuasion. We shouldn’t be shy about the fact that we have a product or service that we want people to buy. However, marketing focuses on the customer and their needs whereas selling focuses on the seller and what they want to get rid of. In other words, marketing forces us to understand the world through the customers’ eyes.
One of the most difficult things when trying to see the world through our customers’ eyes is “how rational are our customers when they make their decisions?”
Malcolm Gladwell in his book Blink argues that we subconsciously make our minds up very quickly indeed – in fact in a blink. We might then spend a long time rationalising this decision and believing that it has been arrived at by conscious rather than subconscious thought.
The relevance of this to us in business-to-business marketing is that we are inclined to believe that business-to-business customers leave their emotions at home when they come to work and that all their decisions are rational. We know that this is not the case. Research consistently confirms that those companies that are best known to us (in other words they have a strong brand) are most likely to get the business. This is because familiarity is important in the blink test – we feel more comfortable with a supplier that we know even if we have never done business with them before.
The answer is therefore to build a brand, not only in terms of awareness but also to engage with the customer and build trust. For those of you who haven’t yet read Malcolm Gladwell’s book Blink, we strongly recommend it. Or watch his 30-minute discussion on the subject on YouTube
Questions arising from Gladwell’s work are:
For more information on building a strong brand, click here.