What Is the Most Important Thing To Do Right Now? One Word!
Hey-
I spent some time this week prepping for a presentation on pricing for the National Sports Forum. Then I had a call with an organization that has found themselves stuck because they are pulling in too many directions at once. Finally, I talked with one other business that says, “They definitely know the market and what people want.”
After it was all over, I recognized a theme that should be on all of our minds right now, research is needed.
Let me hit on a few things that illustrate the importance of research right now.
From the top here, right now we have been on lockdown for more than a year in a lot of places and during that time any number of things has happened like:
People have switched careers
People have moved to different places
People have changed their habits
People have gotten sick
People have lost jobs
People have started families
I can go on. This isn’t the definitive list of things, but the idea is that we don’t really know what the world looks like right now. Period!
In one of the conversations I had during the week, I was chatting to a person that said, “Oh we’ve been working in this market for the last 5 years…so we have a good feel for what people want.”
It isn’t unusual and in normal times, this kind of point is followed by the executive loosening his tie in a “Hello fellow kids” kind of manner and getting down to the business of telling everyone what folks want.
Truth be known, the belief that the internal marketing team has all the answers and is supposed to dictate to the market what they need and want is probably one of the top three reasons a marketing campaign fails.
Why?
Three reasons:
You should always be in the market doing research, small and big stuff.
When you start working for a business or an organization, you lose the ability to look at your business and the things you offer from the point of view of your market. You lose perspective. You are too close to the situation.
Now that we are getting back to some sort of regular life after the pandemic, none of us really know what is going on and to rely on others’ opinions or our own guesses is dangerous.
Second, in this emerging from the pandemic world, we aren’t entering a return to normal or a “new normal”. We are entering a period of no normal or not normal.
When you are faced with a rapidly changing environment, guessing or falling back on the way things have always been done isn’t safe.
How do you deal with a time of rapid change?
You have to get close to your market. You need to talk to customers, watch how they are acting around you and with other businesses, and you want to find data everywhere you can.
Again, research.
One of the best things you can do in normal times is try to get into the market with an iteration as quickly as possible to see how folks react, so you can learn, adjust, and get back to the market.
Now?
It isn’t a best thing to do, but an essential thing to do.
Again, research helps you do it.
Third, when you are being pulled in too many directions at once, it is often because everyone is looking at a different set of priorities and data. Or, everyone has their own priorities and no data.
Either way, you need to make sure you have a shared set of facts to work from so that you can get everyone working in the same direction.
How do you do that?
Research, of course.
But a special kind of research called Backward Market Research which focuses on narrowing down your research and focusing your attention.
Sounds hard?
It is actually pretty simple.
Three steps even.
Figure out what question you want to answer with your research.
Decide what is the best way for your question to be answered. Long form answers? Multiple choice? Conjoint study? You decide what will show off your answers the best way.
Design your survey around the first two points and execute it.
Finally, your pricing deserves research.
I made a joke with a friend on Friday that I’m having a slow week since I only received 75 emails with different discounts from around the world that week.
I was joking…it was likely 100.
But what it highlighted was a willingness for a lot of brands to go into the market without a real pricing plan for the reopening of their businesses and how they were going to generate demand, especially in the short term.
I have advice on pricing and pricing research that isn’t complete, but you can find it here.
On a bigger level, just throwing out a price now can be dangerous. A lot of businesses I know and work with have seen their businesses radically changed by the pandemic. So falling into the trap of trying to guess at pricing and throwing out a number that may or may not have worked in the before times is dangerous.
Right now, I’m going to suggest you start doing research by looking at some small-scale experimentations and some simple market research.
On the experimentation side, you might try placing your ads at two different prices in two different places and running ads, looking for the conversion rates. You might shift the price depending on some aspect of the target’s profile or location. You could try an experiment involving different packages.
Experiments can take all kinds of forms. And, if you’ve never done it before, start simple with two landing pages or two ads running directed people to different purchase pages to measure the conversion data on different offers.
On the market research side, you are going to want to start identifying drivers of behavior and where folks are putting value now.
You can do some of this by running a conjoint study of your market.
What’s that?
It is a simple price research model that breaks the “product” into its different parts and has your market rate which ones matter most. Let’s say you are selling a luxury notebook because I just saw Smythson start going nuts with 20% discount codes and I have a Smythson notebook that I love…and partly because I know it is a luxury brand. So…talk about destroying your brand.
In this case, you might start out asking your market to rate these factors for importance:
Brand
Material
Look
Feel
Then when you rate them, another set of four comes up:
Brand
Feel
Cost
Distinctiveness
In the first round you ranked brand and feel most highly. The second time you rated feel and distinctiveness most highly so that the third set of options pops up:
Distinctiveness
Feel
Brand
Word of Mouth
Does this make sense?
Because all the conjoint study does is helps you rank attributes that contribute to sales.
I’m going at length here because some of my other favorite pricing tools aren’t as helpful in the moment because we are still dealing with great uncertainty. So you want to understand where folks are right now on safety, wants, needs, desires, and drivers to behavior.
So, if you are selling tickets to a sports event, your first round of attributes might look like:
Cost
Matchup
Safety
Ease of attendance
And, if you are in the professional services, you might go with something like this:
Brand
Cost
Expertise of team
Speed
On these, your mileage may vary.
But the key, again, research.
To sum up my rant today, research is the foundation of everything right now. You have to understand the world we are entering now and you can’t do it with guessing or assumptions.
Your research isn’t like to be perfect, but it never is and there is no such thing as perfect research.
What I hope you will do is get started on research.
You want my number one tip on where to begin?
Google!
See you later!
Dave