Archive for the ‘market research’ Category

Shattering the one-way mirror

Sunday, September 20th, 2009

The market research profession offers a variety of reactions to co-creation. At the negative extreme of the spectrum, some market research professionals reduce co-creation to a customer workshop technique close to ethnographic, observation-based research. Damning co-creation with faint praise, they’ll offer comments such as: “We’re all for co-creation; it’s like prose and we’ve been doing it for years.” We might call this the “defensive expert” attitude. Because the training of most market research people involves an expert paradigm – the PhD density can be quite high in the market research functions of large firms — it is hard for them to let go of the idea that they must “own” the science of market research.

At the opposite, positive extreme, co-creation is rapidly gaining ground inside the market research profession. In the early days of co-creation, say five or six years ago, market research departments were never sponsors of co-creation initiatives inside organizations. In the last year or so, though, some powerful agents of corporate change have emerged in market research departments. So how do these aficionados of co-creation describe the role of co-creation in market research? (By definition, co-creation is wider than customer market research, in that it also involves an economic point of view on the cost of interactions, or applies to other interactions than the interaction with customers, but we will limit ourselves in this blog entry to customer market research). These early adopters of co-creation usually point to four areas of difference.

The first difference has to do with who is targeted in the research. A co-creation workshop focuses on the interactions between at least two (and often more) populations. You cannot co-create by having in attendance, say, only the customers or prospects of a bank– which, by the way, is exactly what a traditional focus group does. Like for tango, it takes two to co-create. A bank co-creation workshop will have at least bank advisors and customers, possibly also call center agents who speak on the phone with customers. Participants will not be random customers with random advisors and random call center agents. They will be people who deal with each other in day-to-day live, i.e., real people who have interactions with each other. In other words, we want twosomes (or threesomes, foursomes, etc.) and want to start from their existing interactions, rather than proceed from an intellectualization of their future experience.

The second difference deals with how attendees participate in the workshop. The philosophy of traditional market research is to be as protective as possible of the customer’s natural habitat, “so as not to bias the answers”. This is where the one-way mirror concept comes from, as well as anonymous surveys and hidden camera filming. The basic assumption of traditional research is that experts should design those interventions, manage them to minimize the dangers of intrusion, and generate the insights which will then be communicated in distilled form to business users who will (hopefully) act upon them (some business people, usually quite junior, may attend the session behind the one-way mirror, or an occasional executive may be invited, but both are instructed not to say anything).

In co-creation workshops, we want to have as many company participants as customers, and we want them to be actively involved. The idea in co-creation is to shatter the one-way mirror. We don’t want company employees to be flies on the wall. We want them engaging customers all over the room. Co-creation involves having two parties share their experience and come up with new ideas on how to improve their respective experience. The experience of the bank adviser is as important as the experience of the customer, and customers can contribute as much to the bank adviser’s experience – once it is explained to them – as the adviser can contribute to the customer’s. For example, customers can do more than generate views on their own experience. They will for example routinely offer insights on how bank advisors could earn more commissions with their help, once they understand the bank’s performance measurement system. In fact, a significant portion of co-creation workshops involves sharing the inner workings of the company, a process called “making the company into a glass house”, to invite customers to imagine new experiences for themselves. As one can intuitively understand and mathematically prove, the quality of experience is deeply correlated between the two populations, hence the need to work on both simultaneously.

The third difference is one of analytical vs. analytical/emotional philosophy of change. The paradigm of traditional market research is an analytical one. Insights are meant to be powerful new views of the customer experience coming from an observed, documentable, and ideally quantifiable fact. Co-creation also builds a strong analytical case for the ideas identified, but generates a much richer set of new ideas through a deeply intuitive, emotional territory. The passion for a new customer experience comes from the excitement of one or two company executives participating actively in a new dialogue with customers. It originates from the sheer excitement of company managers being asked to “make up new stuff on the fly” with customers. Transformational ideas start from the enthusiasm or pain felt by one or more managers connecting with a single customer or company-facing employee. This emotional endorsement of an idea by internal managers is what produces sustainability in co-creation, not the brilliantly articulated PowerPoint presentation that may accompany it. Arguably the most distinctive characteristic of co-creation research is not in how it approaches the customer, but how it engages the internal organization.

The fourth and final difference is one of discrete vs. continuous process. Typical market research involves trying to generate insights through a one-time investigation. Most focus groups, customer surveys, and anthroplogical observations are one-time affairs. As my colleague Venkat Ramaswamy likes to say, “there is no feedback on the feedback”. Some advanced research departments conduct longitudinal studies and use permanent panels of customers, but they often limit themselves to tracking simple satisfaction measures over time, rather than engage customers in co-creation (with some notorious exceptions such as Procter & Gamble’s VocalPoint and Teen Tremor communities, for example). Co-creation is a continuous process where the external customer is made over time into an extension of the company’s staff. Not only does the company learn about customers, but customers learn more and more about the inner workings of the company, enabling them to contribute more. The first co-creation workshops typically do not lead to killer insights – co-creation is as much a journey as a destination, to use the cliché — but the longer the customer remains engaged in the process – usually this involves a series of workshops, followed by the putting in place of an electronic platform of some kind – the deeper the insights and their value.

Of course, all this requires a personal transformation of market research people themselves. Abandoning an expert view of oneself and moving to a “broker of co-creation insights” role is no easy task. Those who embark on the co-creation journey have a unique chance to make market research into a new force inside their organizations. The cards are being dealt as we speak.

Adding insult to injury: the tyranny of satisfaction surveys

Thursday, July 9th, 2009

I am in Paris, staying at a Novotel hotel, meeting with clients and teaching. The hotel is great. They all know me here and greet me by name. They even let me transform my room into an improvised meeting room with four of my colleagues, bringing me extra chairs and tailoring their cleaning schedule to my needs. It’s all peachy. Except for the fact that the Internet does not work properly. For €20 a night (gulp), it kicks me out every two minutes and forces me to reenter my access code every time. This is by now the only thing I care about. Forget about the friendly staff and the special service. This is a BAAAAD hotel. On the last day of my stay in the morning, I find a Novotel survey in my e-mail box asking me about my experience. The adrenaline starts flowing. I will get to vent. The cathartic effect is starting already. I will sleep in peace in the cab on the way to the airport.

But wait! It does not ask me about the Internet connection, except as a minor feature in a long list of “services”. It wants to know whether I think of this hotel more as “pleasant with some originality”, or “classic with a twist”. It wants to know whether I have enjoyed the two bathrobes and the slipper they have made available for me. Or whether the Nespresso coffee machine does anything for me. I don’t give a hoot. I want to talk about the Internet, in fact let them have it about their Internet. The survey is nearly over. I want to kill the market researcher who designed this questionnaire. At the end, there is a box where I can write whatever I want. I know the market researcher is already half-checked out. I still spill my guts. Just in case. The box is too small to contain my ire. The tyranny of quantitative market research has won once again. They will never know why I have woven this complex pattern of a final evaluation where I hate the hotel, yet love the people in it and most of its amenities. They will probably run regression models between my overall low grade and my favorable answers to most questions, and shake their head.

Maybe they should have just given me a blank piece of paper and let me tell my story.

Co-creation in the fish tank

Thursday, July 2nd, 2009


“I’m not like them” this attractive young branch advisor tells one of her customers. “I’m much more like you than I’m like them. I invested in the same shares you did. I too have lost 40% of my assets.”

The “them” is the management of her French bank. Or any bank for that matter, for she hates them all. “They” are the ones that took excessive pay, invested in subprime and derivatives and caused the global financial crisis. That she might be lumped with these high-fliers galls her no end.

The bank has become concerned about this Stockholm syndrome for advisors. Advisors and customers are increasingly co-dependent and advisors are progressively distancing themselves from the bank. In its desire to reengage advisors and customers, the bank has decided to start with two test regions. In the North, the regional marketing manager is in charge: he’s a classically-trained person. He’s eager to offer his region as the test bed, but wants it done classic market research-style, with no management interference. He wants a well-lit aquarium and a comfortable chair from which he can observe the fish.  In the Center region, Raphael, head of the region, has decided to come to the workshops himself in order to engage directly with advisors and customers. He wants to dive in the tank and swim with the fish.

“But we want unfiltered data” the Marketing Manager of the North states, upon hearing what Raphael, the Head of the Center Region, wants to do. “If I or any of the senior managers come to the workshops, our advisors and customers will be intimidated and their responses biased. I’d rather come to one or two focus groups and observe what’s going on behind the glass. Or maybe I’ll look at the films.”

A few days later, Raphael and his team find themselves involved in a passionate discussion with advisors and customers. It’s about midnight and they’re still going. Advisors challenge him openly in front of customers about the incentive system that occasionally drives them to push products onto unsuspecting customers at campaign times. Raphael pushes back by outlining the economics of the retail banking business, the need for campaigns to create the volume effect required to maintain branches in smaller towns and villages, and the fact that these campaigns pertain to products people happen to need. So where is the conflict? Paradoxically, customers start reassuring advisors that there’s nothing wrong with what Raphael just explained. They’re cool with the fact that the bank has its own economic imperatives, as long as they’ve been made transparent.

The customers in attendance are young people who would typically never come to a bank branch. They have a cynical view of banking, no particular loyalty to any brand, and simply do not care much. There are many yawns in the early part of the conversation. When Raphael starts talking about the community he wants to build in each town, though, chins come up and SMS texting under the table mysteriously stops. He shows them a project he’s doing, restoring one of the stained glass windows of the Chartres cathedral. They deem the project “awesome”. He then lets them see how the mutualist structure of the bank could allow them to participate in its governance and promote their own community projects. Now, they’re positively enthusiastic. They start building with Raphael what the process could be like. that would draw young people to the bank’s mutualist activities.

“But you’re leading the jury” the Marketing Manager of the Northern Region utters one last protest, looking at the film of Raphael interacting with advisors and customers in Chartres. “You’re interfering with the process.”

“That’s the point” Raphael tells him. He has a broad smile on his face. You can tell he’s fully energized by the encounter. “And I’m going to get back together with these kids as soon as we have a concept of that new community process” he announces, almost giddy. Straight back to the tank, swimming with the fish.