Marketing Pulse

May 01, 2008 9:30 PM  By

When it comes to market research, multichannel retailers tend to be do-it-yourselfers: Sixty-five percent of the companies surveyed by Multichannel Merchant say they conduct market research in house. A quarter of the respondents used an outside research firm or consultant, 8% don’t know how it’s done, and 19% say they don’t do market research. Our March e-mail survey of nearly 50 readers finds that Web/e-mail surveys are actually the most popular type of research: More than half (51%) of respondents say they conducted an e-mail or Web survey in the past 12 months.

The companies now conducting research see the value in it: 31% plan to maintain their level of market research activity in the next 12 months, 29% plan to increase their level, and none plan to decrease research. Then again, 21% have no plans to start a market research program in the next year, and just 4% do plan to start one; 15% say they don’t know their plans for research in the next 12 months.

When asked about using outbound telemarketing to contact customers, 43% of respondents say they’re doing it; 53% are not, and 4% don’t know. Among those survey participants who are doing outbound telemarketing, how are they using it? Most (65%) say they perform customer surveys, 55% check on service levels, and half try to sell products via outbound telemarketing.

Just about 36% of respondents say they have a preferred or frequent buyer program; 60% do not, and 4% say they don’t know if their company has such a program. Those who do have preferred or frequent buyer clubs offer member customers lower prices (offered by 56%); newsletter or other information devices and special product offers (each offered by 44%); and point redemption programs and product previews (each offered by 25% of respondents).

How do marketers contact their best customers, in addition to regular catalog mailings? Most (64%) use e-mail offers, while newsletters and sale catalogs are used by 30% of respondents, 21% use special targeted catalogs, and 15% use item-offer solo mailings. Nearly 20% say they have “other” types of communications to reach their best buyers; 11% have none, and 6% do not know.

About half of the survey respondents say they do not conduct customer lifetime value studies. Why not? Thirty percent say these studies are too time consuming, while 26% say they are too expensive. Another 26% admit they don’t know how to conduct lifetime value studies, and 17% say they see no need for them; 26% say “other,” and 21% do not know why they don’t conduct lifetime value studies.

How did near-term value — typically a time frame of two to five years — studies fare among survey participants? Twenty-seven percent say they conduct near-term value studies, 33% do not, 9% are considering it, and 31% say they don’t know if their company is calculating near-term value of customers.

As for international marketing, 17% have an active program, and 11% are testing overseas. Which foreign markets are the most lucrative or most attractive? The markets closest — in proximity and culture — to the U.S., Canada and the U.K. tied for the top, both rated a top market by 62% of the respondents pursuing international marketing, followed by continental Western Europe and Mexico (54% each), and Australia, with 46%.

Why aren’t merchants pursuing international marketing? No real surprise there: The plurality (30%) say they don’t have enough staff, while 23% say it is too expensive. About 33% have “other” reasons for not marketing overseas, and 20% say they don’t know why they aren’t pursuing international programs. Given the weakness of the U.S. dollar, now might be a good time to consider targeting overseas customers who will get more bang for their buck.

Types of market research conducted in the past 12 months
Web/e-mail surveys 51%
Direct mail questionnaires 36%
Phone surveys 33%
In-depth one-on-one interviews 28%
Focus groups 23%
Mail intercept surveys 8%
Other 5%
None 5%
Do not know 10%
Totals do not equal 100% due to multiple answers
How do you entice prospects to shop with your catalog?
Offer discount coupon toward first purchase 35%
Offer free shipping and handling 26%
Send personal letter with catalog request 22%
Offer free gift with first purchase 17%
Refund catalog subscription price with first purchase 7%
Other 17%
We do nothing special to entice prospects 26%
Do not know 11%
Totals do not equal 100% due to multiple answers
The top three reasons why you conduct market research
Determine overall customer satisfaction 49%
Determine your rank as compared with competitors 31%
Rate your company’s service level 31%
Ascertain demographics 26%
Determine viability of other product lines 23%
Evaluate creative 18%
Ascertain psychographics 13%
Determine viability of current catalog concept 13%
Determine viability of electronic catalog concept 10%
Determine viability of new catalog concept 8%
Other 18%
Types of customer incentives used/tested
Currently use Have tried Never tried
Deferred billing 18% 9% 73%
Dollar-off coupons 26% 28% 46%
Free gift wrapping 7% 9% 84%
Free gifts or premium with purchase 33% 11% 56%
Free shipping and handling 43% 19% 38%
Frequent-buyer discounts 26% 15% 59%
Frequent-buyer program 26% 13% 61%
House credit 17% 11% 72%
Lower shipping and handling on large orders 18% 16% 67%
Preferred buyer program 28% 13% 59%
Special Website offers 45% 19% 36%
Sweepstakes 9% 24% 67%
Volume discounts 54% 17% 28%
Totals do not equal 100% due to rounding