RainToday, March 6, 2006

The Power Of Anecdote And Agenda:
Researching Your Prospects' Buying Patterns

by Barbara Bix and Melissa Josephson Edwards

As marketing directors, we want to invest money in marketing projects that demonstrate a return on investment and that will make a difference in the bottom line. How can you develop a great marketing campaign that will deliver results?

By conducting market research to:

  1. identify the best market segment(s),
  2. pinpoint the most promising prospects, and
  3. understand clients' needs and wants.

Armed with this information, only then can marketers implement an effective marketing campaign based on sound data that will deliver the best prospects to the sales team.

For many companies, the idea of market research can be daunting. How much data do companies need? How do marketers get the data they need? One concern is that getting a lot of data is expensive. Another concern, especially for companies introducing leading edge technology services, is that they may run the risk of missing the market window.

The ultimate solution is getting "just enough" data to identify the best prospects and determine what it will take to get them to act.

"Just enough" data enables marketers to:

  1. make wise marketing investments,
  2. manage the cost of data collection, and
  3. get to market on time.

Here's how to do it.

Tricks Of The Trade: Using An Anecdote

The best way to learn about how and why people buy is to ask them to describe how they came to use whatever service they're using today. Marketers can get much better information when prospects describe their previous thought processes and how they actually made decisions--versus “conjecturing” as to what they might do in the future.

Too often, marketers make the mistake of asking people to predict future behavior (e.g., “What would you pay?”) rather than report on past actions (e.g., “What did you pay?) When people report on historical behavior, they automatically take into account all influential factors at that time--rather than limiting their response to just one question.

How Anecdotes Can Further Your Understanding

So, ask about the past and listen for stories. When people tell their stories, they emphasize what's important to them, reveal how they've acted in the past, and describe what motivated them. When answering open-ended questions, respondents often provide stories rich with detail and ideas that marketers may not have even considered. On the other hand, surveys with “framed” questions generate responses that are limited by marketers' preconceived hypotheses and assumptions.

Anecdotes reveal prospects' needs, wants, and priorities. Understanding how and why people buy also helps marketers differentiate critical needs from requirements that are just “nice to have”. Marketers can go back to stories to learn not only what prospects value, but also to learn what circumstances trigger purchases and where prospects turn to get the information that informs their purchasing decisions.

In addition to helping marketers determine what features to include in a new service, the information gathered from stories can highlight what messages to emphasize and identify the most effective marketing media and sales channels. In fact, prospects' stories are often the most dependable way to get the information marketers need to create effective marketing plans and guide their marketing investments.

Use Anecdotes To Identify Market Segments

Anecdotes and stories also help segment the market. While we all have individual preferences when we make buying decisions, most of us fall into broader groups of people who tend to buy in the same way, time and time again.

The cost-effective approach to segmenting the market is interviewing respondents who appear to share similar characteristics. Talking to clients, prospects, and people in a good position to observe a lot of prospective clients making buying decisions will also reveal the buying characteristics of these broader groups more quickly.

When respondents repeat the same stories over and over again, chances are these respondents are in the same market segment. Once you're getting this kind of data convergence, you'll want to validate this hypothesis by continuing to interview from the same group until you get 5-8 people telling the same stories.

If you're hearing the same multidimensional story – rich in details and hitting on many of the same dimensions – you're getting enough data. Stories – unlike answers to survey questions – provide such a depth and breadth of data which really represent multiple data points.

The chances of 5-8 people telling the same story – with the same buying criteria and buying behavior – are small, unless they're buying in the same way. If the data is not converging, you are probably crossing market segments. To distinguish the boundaries of the market segment, interview until stories change and see if you can define the circumstances under which the stories change.

Tricks Of The Trade: Avoiding Agenda

One problem inherent in all data collection is bias. People often have agendas or preconceptions about their markets, especially insiders who have typically approached the client set from a particular angle. An example of this is the “happy ear” incentive, where company employees or partners hear what they expect to hear, rather than what the client is really saying.

Many companies, therefore, choose to outsource market data collection to independent researchers who are trained to ask questions that are open-ended and probe the whys and hows of past behavior.

These professionals offer more than an impartial agenda. They typically have a broad base of experiences across industries and companies and can apply best practices and lessons learned to your particular market and industry. Through their ability to access the right people quickly, they can help you cut costs by identifying the “right” people to interview.

Solid Beginnings Lead To Long-Lasting Success

Successful businesses are built on sound and compelling data that represents clients' needs and wants. Gathering anecdotes and avoiding agenda are key to effective data collection. By identifying and speaking with prospective clients in your market segment, you can quickly and cost-effectively identify your target markets, nail client requirements, and pinpoint effective marketing messages.

With careful forethought, companies can spend just enough time and money on data collection to get it right—and avoid blind marketing investments—without breaking the bank.

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I needed to find and evaluate specific information very quickly. Using her extensive contacts and knowledge of industry information sources, Barbara was able to get me everything I needed and more within just a few days."
Thomas Grape
Managing Director

ADS Senior Housing Division.

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