Survey says: research works

Decisions about which new product lines to offer, what areas of customer service most need improvement, or which catalog covers will be most effective too often come down to best guesses. And what with increasing costs and competition, fewer companies can afford to guess wrong. Fortunately, Internet surveys and other new research methods are enabling more marketers to conduct research before making major decisions. Eastern Mountain Sports (EMS), for one, is an active user of e-mail/online surveys.

Not that the more traditional survey methods are obsolete. Last winter, for instance, EMS complemented its Web surveys with good old-fashioned focus groups. Lego has done the same. And 18 months ago, Beverly, MA-based women’s apparel cataloger/retailer Appleseed’s opted to conduct a phone survey to help it find growth opportunities among its target market of women ages 50-70. Unlike a Web or paper questionnaire, says Appleseed’s senior vice president of marketing and retail Claire Spofford, a phone survey allows for a broad array of follow-up questions.

Call for data

To conduct the customer survey, Appleseed’s enlisted Boston-based Mercer Management Consulting. “It’s always good to get someone from the outside to keep you objective about what the data is telling you,” says Spofford. “Otherwise, you might fall prey to letting the data tell you whatever you want it to tell you. If you make an investment to understand your market place, you want to be clear-eyed in how you interpret that data, so it will be useful to you.”

The next step was to select 800 women to call: 200 customers, 200 catalog requesters who had never made a purchase, and 400 women chosen at random from a sample that matched the demographics of Appleseed’s customer base.

The random sample is a crucial part of a phone survey, says William Steinberg, Ph.D., president of Montreal-based survey research consultancy and software development firm “If you’re calling people to get marketing information, you run the risk of getting a highly self-selected sample,” says Steinberg. “You either get people who are bored and delighted to talk to you, or people who are the maddest or happiest with your company.”

Individuals in the random sample were asked several qualifying questions. One was whether they were strictly “value channel customers” — in other words, if the majority of their apparel purchases were from discount superchains such as Wal-Mart. “If you look at market opportunity,” says Spofford, “there is obviously a sort of pyramid where a lot of volume is purchased at price points below where we would play.” With prices ranging from about $29.95 for dress shirts to $225 for dresses, Appleseed’s considers itself part of the “moderate or upper part” of the apparel pricing pyramid, so it did not want to waste time interviewing consumers who wouldn’t think of spending more than $15 on a pair of pants.

Since Appleseed’s wanted to devise a strategy for the next 10 years, the cataloger needed its questions to gauge the emotional drivers behind the shopping habits of baby boomers, a subset of the population rapidly aging into its demographic target. The company knew that it could not market to boomers as one segment.

“Demographics play a part,” Spofford says, “but the primary drivers of segmentation are much more attitudinal and driven by women when they describe their sense of style, where they like to shop, how they think about dressing, what their attitudes are about the way they look, and how they like to be treated when they shop.”

The company tried not to keep survey respondents on the phone for longer than 25 minutes, after which abandonment rates — in which the caller simply quits mid-survey — usually begin to escalate, says Spofford. But to the company’s surprise, respondents were more than willing to chat. Trial runs of the survey clocked in at around 30 minutes per respondent, but when actual consumers were called, interviewers found women who were willing to stay on the phone with them an average of 43 minutes.

“These women loved talking about themselves and shopping, so we got great data,” Spofford says. “The survey cost more because [the interviewers] spent more time on the phone, but we got an amazing amount of data.” The company won’t reveal the costs of the research, but Spofford estimates that developing and conducting a similar study would fall in the $100,000-$175,000 range.

Appleseed’s survey consisted of two types of questions. The first, close-ended questions simply asked for information such as how much participants spent by channel and apparel category. The second type of question asked participants how strongly they agreed or disagreed to statements such as “When I walk into a room I like to be noticed,” and “I would describe my sense of style as classic.”

Appleseed’s launched the survey on Thanksgiving weekend, when the cataloger expected to find most of its potential respondents at home. It took two weeks to complete 800 interviews. Spofford won’t specify exactly what the survey revealed, but Appleseed’s did find that five of the audience segments identified behaved enough like each other in their sense of style to be collapsed into one segment. What’s more, Appleseed’s is now giving incoming callers abridged versions of the original survey to determine which audience segments, if any, the callers fit into.

E-information please

Phone surveys tend to be among the most expensive research methods. Furthermore, says Steinberg of, the responses can be influenced by the voice and tone of the person asking the questions. A far less expensive and arguably more impartial method is to use the Internet and e-mail.

In November, after its first catalog drop in 18 years in the form of an editorial-laden “catazine,” EMS wanted to evaluate the effectiveness of the mailing. The Peterborough, NH-based merchant of extreme-sports gear was no stranger to surveys: It had been e-mailing quarterly surveys to customers and outside lists of sporting enthusiasts; questions elicited responses to subjects such as new billboard advertising and store design, says manager of consumer insights Mark Van Saun.

Using two vendors — a survey research consultancy and a company specializing in direct marketing research — EMS e-mailed 20,000 of the 650,000 catazine recipients an invitation to participate in an online survey. (All the individuals sent invites had opted in to receive e-mail offers from the company.) While its quarterly survey participants receive an undisclosed incentive provided by the research firm that EMS uses to assemble samples of respondents, the company did not feel an incentive was necessary for the catazine survey, says Van Saun: “It was the first time we had sent out a catalog-type of piece in years, so I think people were excited to provide some feedback.

The survey consisted of roughly 30 questions and was designed to be completed in 10 minutes. Most of the questions, which covered topics such as ease of use and the appeal of the creative, were designed to be answered on a scale of one to five, with one as the highest ranking. Demographic questions about age, marital status, and level of outdoor activity were asked in a close-ended format. Other questions were multiple choice (for instance, “Which of the following descriptions best summarizes your current level of outdoor activity?”).

EMS got back more than 1,000 completed surveys, which Van Saun says the company felt comfortable with. A key draw of online surveys is the speed with which they can be transmitted and responses received. EMS had survey results available within a week.

“The timeliness was important because of the lead time needed to develop the next catazine,” Van Saun explains. “You’re talking about an 80- to 100-page book, so no time is too early to get productive input from people.”

He will not disclose the results but says that it showed that customers were pleased with the catazine to the extent that “the casual observer won’t notice any dramatic changes” to the spring catalog, due to hit homes this month. Van Saun says the “tweaking” that occurred between the first and second issues of the catazine centered on making the book more user-friendly — for instance, making products easier to find.

The company, which had received a handful of angry letters about the inclusion of nudity and obscenity in the catazine, was reassured that it was on the right track. “It’s easy to react to letters and e-mails sensitive to imagery,” Van Saun says, “but what 1,000-plus responses told us was that it really wasn’t an issue for most of our customers.”

EMS plans to send a post-drop e-mail survey to recipients of the second catalog. The company has not yet determined the recipient list of the spring survey, but the majority will not have received thewinter survey, Van Saun says.

EMS supplemented the fall online survey with feedback from four focus groups of 10-12 people. One group consisted of consumers ages 30 and younger; the other was made up of consumers over the age of 30. These panels, held in Boston in December, were conducted in tandem with two 10-person focus groups of EMS employees segmented like the consumer groups by age. A professional market research moderator led the consumer panel, while Van Suen moderated the employee group.

The consumer groups were asked questions similar to those of the online survey. The employee participants were also asked their opinion of the book from a customer perspective, but in addition they were asked about their perception of the catazine from a business perspective, such as what they felt were the marketing strengths of the book.

The goal of the employee focus group, says Van Saun, was to assess internal reaction to the catazine, “to see if our own associates felt the book captured the brand direction.” The meeting was held in Peterborough, but the participants met outside the office for the discussion. It was important to “get out of the bounds of the office, where the phones don’t interrupt, and you can talk,” he says.

More focus on focus groups

Toy manufacturer/marketer Lego has also used focus groups. The Enfield, CT-based company conducted focus groups in fall 2003 to determine whether offering membership to a paid club was a viable marketing strategy. The company already had a free Lego Club in which members received a complimentary copy of the company’s bimonthly magazine, says manager of marketing analysis Margaret Conley. But Lego was questioning the viability of another club; for a set fee, members would receive six Lego sets mailed to their home, six exclusive editions of Lego magazine, and a child’s admission ticket to LegoLand amusement park in Carlsbad, CA.

New York-based market research firm Sachs Insights conducted four focus groups for Lego. Each group consisted of five pairs of randomly selected parents and children, who were brought in on two weeknights for 75-minute sessions.

In the first session, the children and the parents were put in separate rooms featuring mirrors that Lego executives could stand behind as unseen observers. Using cards and posterboards, the children were asked to create their ideal fee-charging Lego club. In the second session, the children and the parents were put in one room. “We got to see the family-negotiating dynamics in the interaction of how kids talk to parents about what they want,” says Conley.

Among the specific topics covered during the second session were the name of the club and reactions to different club graphics marketing materials. In exchange for their participation, the children were given a Lego set worth $60 and the parents received $125.

Videotapes of the focus groups were edited into a 10- to 15-minute presentation that the marketing department was able to share “throughout the company so that anyone hesitant about the idea could see the reactions of the parents and kids,” Conley says. “It helped sell the club.”

Lego has since launched the club, which it calls the BrickMaster Club and for which it charges $39.99 a year. As for the cost of the four focus groups, Lego paid $24,000, which included recruiting, moderating, reporting, and incentive expenses.

Mix master

Lego doesn’t limit itself to focus-group research, however. To learn how customers use the print catalogs, the company includes a one-page survey in about 5,000 books twice a year — during the holiday season and the off-season. Usually about 600 recipients respond to each survey, Conley says.

The questions cover subjects such as how long recipients spend with the catalog, who in the household uses it the most, does the child in the house use it to make up a holiday wish list, and whether family members take the catalog to stores to help them find what they’re looking for. The survey requests that the main user of the catalog answer the questions; in exchange, participants are entered into a random drawing for a Lego gift certificate.

Lego also conducts a phone survey right after the holiday season. Survey-takers will always ask to speak to an adult in the house. Participants are asked which channels they like to shop in and why. Conley says that, in addition to providing insight into why consumers select the channels they do, the phone surveys also help the company gauge the value of its Shop at Home catalog.

“Kids receive the Lego catalog, sit down, and study it for 45 minutes on average and tell their parents what they want. If parents buy the set at a retail store, like Toys ‘R’ Us, we would never know the true impact of the catalogs unless we did this research,” Conley points out. “Even though the sale may not be credited directly to the catalog, we can still see the importance of mailing those catalogs and the impact they have for our retail partners.”

The company’s e-mail/online surveys often ask more-targeted questions, about specific product lines or new designs, says Conley. For instance, Lego has sent online surveys to buyers of its Knight Kingdom Collection building set. The product, which enables the construction of king and queen Lego figurines and castles, also comes with game cards. In the e-mail survey, Lego asked the buyers how much they liked the cards and whether they played with them or kept them as collectibles. “The beauty of it is, you can launch a survey like that on a Thursday or Friday, and by Monday morning, you can have the results to Lego brand managers,” says Conley.

Following the laws stipulated by the Children’s Online Privacy Act of 2000 (COPPA), the company never e-mails minors directly. E-mails containing links to the survey are sent to the parents, who are asked to complete the surveys themselves or with their children. Lego usually sends about 10,000 e-mails and gets 3,000 completed surveys back within 48 hours, giving them a 30% response, which Conley knows is much higher than what most companies will see. “We have such an enthusiastic core customer and parent that they seem to really want to help us,” she emphasizes.

Lego, which also surveys noncustomers for brand awareness studies conducted by market researchers based at its international headquarters in Billund, Denmark, will not disclose the amount of money it spends on each of its surveys. It uses third-party vendors for all surveys except those distributed via the print catalog. Phone surveys are handled by such companies as Chicago-based Rabin Research. Its Web surveys are conducted by companies such as Brisbane, CA-based Informative and Ann Arbor, MI-based ForeSee Results.

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