Understanding Consumer Behaviour

I’m teaching marketing research this semester, so it was with great interest that I read an article in October 2010 Harvard Business Review, entitled “Reading the Public Mind.”  It points out that the traditional random sample telephone survey is looking obsolete, due to the number of people switching away from land telephone lines, and the lack of consumer interest in cooperating with marketing researchers.  Not only is the accuracy declining, the cost of telephone surveys is increasing as participation declines.

The big problem for both political pollsters and for businesses is that the alternative survey methods are not particularly accurate.  For example, most online survey companies have panels of volunteers. Recent research suggests that these panels are not even close to being representative of the general public. They are more likely to be white, English speaking, higher educated and have higher incomes.  People on these panels are also more likely to be “professional” survey respondents, and more likely to lie in their responses.

So what is a marketer to do?  At least in the short-term, we’re going to have to rely on judgment.  And perhaps in the future, social media may provide us with powerful predictive tools.  Recently a US study indicated that Twitter might be an effective tool to predict US elections.

In the meantime, we’re going to need to deal with more uncertainty in our marketing research data, and be more skeptical of research results.  Which means that product development is going to become a riskier proposition.  We’re going to have to build more empathy for our customers, and really get to know them well.  At least then we can minimize the risk.

Empathy

One of my favourite sites, ChangeThis.com, has a great new manifesto called Creating Widespread Empathy by Dev Patniak.  You can download it here.

Patniak’s premise is that we are better able to feel empathy for our customers if we understand their experience. I know that when I worked in Consumer Packaged Goods that I didn’t spend enough time in our customers’ stores. And I didn’t spend enough time with the end purchaser — the consumer.  I wasn’t even vaguely like her. In order to have empathy for her, I should have walked a few miles in her shoes.  But I didn’t. I thought that I was too busy dealing with running a business. Boy, was I wrong.

Interacting with our customers face to face,  experiencing what they do helps us innovate and helps us serve the customer. The more external connection that we have, the more likely we are to understand our competitive environment and what we need to do to respond to it.

The Death of Marketing Research

I’ve recently read a number of books that all point to a similiar theme. The Black Swan, The Drunkards Walk, The Paradox of Choice, Buyology and Mindless Eating all suggest that our decision making is influenced more by unconcious decision making rules than we have ever thought possible. 

Brian Wansink noted in Mindless Eating, that people consistently said that plate size or atmosphere might fool others into eating more, but it wouldn’t fool them. Wansink’s experiments showed that these people were wrong about their own behaviour, they were fooled into eating more. 

Other books, like the Black Swan and the Drunkards Walk point to our inability to predict or forecast the future accurately. In fact, according to Nassim Nicholas Taleb, author of The Black Swan, the more of an “expert” you are in a particular area, the less accurate your predictions of the future.

Martin Lindstrom’s book “Buyology” uses neuroscience techniques such as funtional MRI’s to determine how our brains react to certain stimulus. He completed a study on smokers and their reaction to the awful photographs of diseased lungs on cigarette packages.  First he asked the smokers to look at the package and indicate how they would react to the pictures on the package. Most said that they would stop smoking. Yet when they viewed the packages in the fMRI, their brains lit up in the part of the brain that indicated excitment — meaning that the participants would crave a cigarette.

Other research into decision biases and the impact of emotion on decision making have consistently shown that we are influenced by many unconcious factors when we make decisions. We are not rational decision makers, and we are not often aware of what our true desires really are.

So what does this mean for decision making in the business world? Perhaps this explains the rampant failure of new products. We rely on traditional survey research to help us develop products. While people don’t intentionally lie, they may not be able understand or predict their own behavior. So perhaps the brave new world of marketing research will evolve to the brave new world of psychology, using traditional experiments or neuroscience to better understand consumer behaviour. Which of course brings up a whole new set of ethical questions about the discipline of marketing. Yet more fuel to add to the already hotly burning fire.