After World War II, The Cola Wars had been dominated by Coke but by the early 1980s, this had reversed and Coke only held about a quarter of the Cola market share. This was around the time Pepsi came up with the genius marketing tactic of running the very public Pepsi challenge in which they consistently won blind taste tests. Coke fired back by developing a new formula that won the taste buds of customers more than both their current formula and Pepsi. They called it, “New Coke”. Armed with 200,000 survey respondents supporting the launch of the new formula, they went to market in 1985. Within three months the old Coke formula was demanded back by loyalists who had claimed Coke betrayed them. To no surprise, Coke had to cave and do away with their expensive new formula. That 1985 marketing initiative to this very day serves business school enlistees as an example of one of the biggest blunders in consumer behavior history. It is going to be our North Star today as it encapsulates the importance of relying on both market research AND consumer insights. The Secret I’m going to let you in on a little secret. There is no vault with the secret formula to brand success laying around. There isn’t a closed club you get invited to when you reach a critical point. When it comes to marketing strategies and why some of the world’s largest brands are so successful, there actually is no secret. The reason why some companies are able to produce much stronger brands than others is due to their ability to deliver on three core tenants regarding their customers: Simplify why consumers buy and deeply understanding purchase motivations. Express a unique value proposition that amplifies a customer’s purchase motivation while maximizing competitive advantages. Create actionable and effective marketing plans that are directly linked to points 1 and 2 with as little deviation as possible. It’s as simple as that. Keep the customer’s voice at the center of your marketing campaigns. Now if you’re reading that and asking “But what if the consumer is saying illogical things?”, you’d be right to ask and it is a good question. To that I would say it is not only “what” they say, but also “why” they say it. If the “what” is consumer research, then the “why” is consumer insight. Without market research, insights lack statistical rigor and robustness. Without consumer insights, market research lacks conviction, empathy, and innovation. When people think of market research or consumer insight, it usually resembles a scene straight out of Mad Men with a table and a few people sitting around it. Or, a person standing in front of a room full of seated adults asking them how a product made them feel when they used it with a two-way mirror visible in the background. And for the most part, that depiction is mostly correct. I’ve sat behind plenty of those mirrors in dark rooms furiously taking notes in all parts of the world. But that is just one component of market research and the way professionals collect those gold nuggets from the consumer. This limited view of how information is collected about consumers has led to the misinterpretation that only big brands can afford this kind of information. “It’s on TV, right? Seems fancy for my brand.” That couldn’t be further from the truth.

Market Research Market research is the collection of fundamental consumer information that allows us marketers to do things like model segmentation or map demographics. But collecting it isn’t always so simple. Details are the name of the game here. Refer back to Coke – they got the market research right. Their study was robust enough, but it included a large error. Their study made no mention that the new Coke formula would be marketed in lieu of the old Coke formula. When conducting market research, you need to be sure you are gathering data with each component meticulously mapped out to achieve your objectives. Coke’s objective was not to see if they could make a cola that tasted better than both their current formula and Pepsi. At least it shouldn’t have been. It should have been, can we make a cola formula that will perform better in the market and consumers will purchase more? Coke made the assumption that consumers buy strictly on taste, which is not true. The insight was lost, but the research was there. Now that we’ve covered what market research is, let’s talk about the number of methods you can use to collect it. Collection methods Primary research is research that you are collecting organically that did not exist prior to your study. Primary research is often the first tool marketers start with due to the fact that it can be exploratory or it can be targeted. Exploratory primary research is designed to be open ended. This is less effective than secondary research in most cases because likely if you are conducting research, you know where the problem generally exists. The benefit of exploratory research would be to get a better understanding of why you are not getting any downloads for your newly created mobile app, as an example. You are not exactly sure why consumers are choosing to forgo on your amazing product so you would engage in exploratory research with a large variation of types of questions and inputs for the consumer to give you data on. Targeted primary research helps marketers understand motivations and gets very specific information from the consumer around a specific idea. If you are testing a specific concept, idea, or message, specific/targeted research forces the consumer to react to your assets. If primary is getting research that did not exist, then secondary is finding research already run to leverage for your study. There are obvious downfalls to leveraging other research studies for your analysis such as not knowing the full scope of the original study not knowing the objective or business problem it was intended to solve demographics/segmentation used in the study do not align to your brand Even with these downsides, secondary research can be a powerful supplement to pump up the sample size and rigor of your claims. Quantitative vs. Qualitative Both primary and secondary research can come in the form of qualitative research as well as quantitative. Qualitative research is usually reflected in the prototypical images of market research with focus groups, panelists, and interviews. Due to the size limitations of running qualitatives, which are run at such a one to one level, quantitative research is sometimes a better choice. Quant research is a good option when you need to produce statistical significance in a sample or have multiple items to test for an initiative. A good researcher will include both types of research into a final, solid recommendation but it is going to be specific to the circumstances of the business challenge. A cheat sheet of the differences can be simply put into this these bullets (generally speaking): When you hear qualitative research think behavior, attitude, motivation, one-to-one. When you hear quantitative research think industry trends, market assessment, competitor analysis. When you hear primary research think new, specific, targeted, problem buster. When you hear secondary research think efficient, fast, not original. An additional cheat sheet to leverage is the below matrix which highlights generally how to view these types of research regarding value, price, and level of insight. For example, secondary research is cheaper and more efficient because it is readily available with lower costs to acquire. This compared to qualitative research which is highly valuable and expensive because it is customized and requires deeper insight with lower sample.

Consumer insights Now that we’ve covered market research in-depth, let’s look at the relationship it shares with consumer insights. Insights can be thought of as why brands are specifically bought from an emotionally aspect of the consumer. These learnings should be viewed as being more targeted than market research. If market research are the Navy SEAL elite force operators for your business, then SEAL snipers are your consumer insights. Without one, the other is vulnerable. Consumer insights are the tip of the spear. But without the shaft, the weapon loses its utility. Nike and Colin Kaepernick An example fresh in the media is Nike’s 30 year anniversary of the “Just Do It” slogan featuring Colin Kaepernick among others in the campaign ad. Market research can tell us what kinds of media different demos consume and can even go as far as to tell us clearly that younger demographics ages 21-35 are the main drivers of Nike’s performance line and spend on average +$35 per basket compared to their older demo counterparts. All that information is important to know. But it doesn’t give us the why. Without access to Nike’s sales run rates, only Nike is going to know how the sales reacted… for now. While many Americans may be scratching their heads over the choice to include Kaepernick, market researchers worth their salt watch with a grin. Genius. Pure genius. The insight is tucked away in Nike’s ability to understand their base. Interestingly, the political landscape shares a common behavior with consumers in 2018. That is, tribalism is engrained in our preferences. One can assume Nike’s core consumers tend to lean to the left politically (the market research component). One can also assume Nike is likely aware we are in an environment where this messaging would certainly elicit an equal, if not stronger, reaction from the political right-leaning. My own thoughts would be Nike is anticipating the left-leaning base will react even stronger which would result in resounding support of Nike’s product from a majority of their higher spending audience. Again, we’ll wait to see the numbers but overnight they’ve potentially deepened relationships and loyalty to their brand with a valuable segment. This is just another example of when you separate the insight from the research, you can get two different stories. But, when you combine them you can dramatically drive brand performance. Consumer Insights Are About Relationships Consumer insights are about understanding how to build relationships. “People buy from people they trust” the adage goes. The same goes with brands. You must get the trust of the consumer before you can earn a purchase. Trust is built by tapping into emotions. Benefits have their place in the sell cycle, as do features, but if you are unable to correctly identify what a feature delivers for the end user and the impact it has on their life then you might as well not even shown up that day. Bringing It All Together The special formula for any business to thrive is to delight their customers. You can do this through an eloquent combination of market research and consumer insights. Here is a map of your typical emotional journey for the consumer and the role different types of research plays in the purchasing cycle: Qualitative data to understand your buyer segmentation and trends. Quantitative data to validate an idea or concept. Secondary data to know where the correct market is to deploy your initiative. Insights to tap into your customer’s purchasing motivations and maximize your marketing effectiveness.

7 Benefits Of Market Research & Consumer Insights Now that we’ve brought it all together, here are seven tangible benefits you receive when you combine market research and consumer insights:

1. Make decisions faster

You can rely on data readily available with a true guide that is linked to you customer’s voice.

2. Maximize profits

A more comprehensive understanding of your consumers and brand equity helps brands avoid poor business decisions. This in turn increase ROI on all marketing executions.

3. Increase sales

It’s no surprise that understanding what your consumer wants enables a brand to delight more consumers and increase motivation to purchase.

4. Crush competition

Brands can make safer bets on competitive advantages to exploit.

5. Avoid show stoppers – By knowing why your consumers buy, you can avoid irreversibly harming your brand with tone deaf ads – ask Pepsi.

6. Aggressive growth

It would be irresponsible for a brand to enter into a new market without first knowing the size of prize, competitive presence, or industry trends. Carefully navigating the minefield accompanied with entering a new market is a tedious process requiring top researchers and strategists in most cases. But if you succeed, it’s a powerful way to grow brand presence and market share.

7. Innovation

While innovation typically requires product creation, some of the most innovative plays in brand lore come from a strategy. Armed to the teeth with research and insights, top marketers have changed the game in how a brand can innovate using insights.

3 Mistakes To Avoid

Now that the benefits are clear of research and you are sold on the value, it is important you avoid these 3 mistakes: Be clear on what success looks like before running research. Your return on investment is going to be important to calculate. You want to be prioritizing market research for situations most correlated to the success of your brand. We touched on secondary research, but it’s always important to do your homework and check all research channels available to you. Often times someone, somewhere has run a similar study. That study may not be the best source for a decision, but you need to do the due diligence to know that for certain. Success criteria for a study should be set in advance of the research being executed. You should already have objectives and the business challenges in mind for the specific study to be solving. This point is crucial as the study you choose to run will likely be affected by the goals you are trying to achieve. Additionally, if you run the research without objectives in mind, you will often find that it is difficult to know if a study was successful or failed. When you have objectives, you are in a much better place to learn from your failures intelligently. Marketers sometimes have a hard time grasping that a failed experiment is still an opportunity to learn. You learned something about your consumer, what not to pursue, and why. That key piece of information can be filed away for the next initiative. What Ever Happened To Coke? As for Coke and their colossal 1985 market research mistake, consumers had an interesting response once they changed the formula back. Turns out, the consumer was not interested in holding a grudge. Coke came back stronger than ever. Coke was such a part of the consumer identity that changing the formula affected consumers regardless of when their last can was consumed. Had Coke simply understood that their product represented nostalgia and safety during a time America was a part of dramatic global change, they could have avoided one of the most famous market research errors ever committed.

Even with ideas that seemingly make sense, (e.g. a 200,000-respondent research study) a consumer expert who understands not only what consumers buy, but why they buy can sniff out these nuances for your business success. If you feel after reading this you could use a consumer expert in your business today, feel free to get in touch via email You could be leaving millions on the table. If you found this interesting, like or share with a friend or collogue please – we love healthy, intellectual challenges.