How deep do you go?

Editor’s note: Luke Williams is senior analyst, and Timothy L. Keiningham is global chief strategy officer and executive vice president, at Ipsos Loyalty, Parsippany, N.J.

The curse of the market researcher is that we work in an industry that is reliant upon a specialized skill set that involves complex knowledge and often a particular education. These skill sets are not easily understood by people outside of the research field. Such specialization curses the mechanic, the electrician, the doctor, the physicist and the academic in general because at some point they are all left having to explain the intricate workings of their particular knowledge in over-simplified terms. But rarely does a mechanic have to explain to you how he fixed your car. Because of his training, he almost intuitively knows what’s broken and why. All you ask is: “How much will that cost?” He quotes you a price and you tell him to fix it.

Client relationships in the field of market research are rarely as simple as the one we share with a mechanic. In research, we cannot easily identify “broken” parts that can be simply swapped out for new ones, and fixing what is “broken” almost never a linear process. Even in trusting, long-standing client relationships, researchers are typically asked to explain their methodology. Research, though, is complex; we require expertise in quantitative and qualitative research methods, social and economic theory, as well as proficiency in statistics to support our methodological claims. This tends to make it somewhat difficult to explain what we intuitively know to be true. But researchers’ abilities to explain and express themselves clearly are critical, as we typically find ourselves in the role of a management consultant (minus the paycheck).

Our charge as researchers is to offer deliberate and accurate research that can be thoughtfully presented so that managers may act upon it. We develop models and action plans that are reliant upon the observations we make. While some managers are still satisfied by data dumps, it is increasingly the case that a company’s research plans are integrated into a management’s strategic plans, and well they should be. If great research tells an illustrative and cohesive story, then all sound decisions are based on a solid and accurate view of the field. But the research picture is only as accurate and focused as the methods that are used to paint it.

The trouble is that the research itself is often cumbersome; it can be a fairly daunting task to perform robust analyses that are accurate, insightful and actionable all at the same time. In painting this picture for clients, we bear in mind that our research is heard only as loudly as it speaks. To ensure that our research is heard, it is often necessary to target our presentations and research models with marketing in mind. Are we confident that our research will hold up to analytical scrutiny? Can we make it understandable for managers? Will they be able to use our research to drive change? Compelling research secures a resounding “yes” for each of these questions.

Fundamental challenges

Successful market researchers produce compelling research by conquering the effects of two fundamental challenges: 1) communicating a practical view of the world according to their research, and 2) pinpointing the appropriate level of analytics for a client.

The first fundamental challenge is embodied in a commonly-made mistake: the reduction of complex, dynamic and multidimensional research matters to topical, one- or two-dimensional analyses. The targets of marketing plans are real people and you should always keep this in mind when trying to bring your research to life. Research shouldn’t exist in a vacuum and it shouldn’t exist in one or two dimensions. Some researchers look at how consumers think and then analyze that against profits, while others look at how people spend their money and then study what sort of demographic splits occur in that spending analysis. Sure, those are important figures to understand, but why does research and analysis stop there? How can we possibly think this alone gets at the heart of what is really going on in a consumer’s head? Specific behaviors are not often the product of one or two emergent details in a consumer population, and stuffing people into some flattened view of the world ultimately defeats any effort to better understand the marketplace. And it is doubtful that a seasoned researcher will consider a two-dimensional profile to be a sufficient mechanism for fully understanding consumer behavior.

To address the first fundamental challenge - communicating a practical view of the world - we need to reset our brains. We must remind ourselves that research needs to accurately reflect the world around us if it is to be worthwhile. We must make every effort to view our world in three dimensions - or more! Let’s think for a moment - very simply - about all the different types of consumers in the world. Lots of people have very similar behaviors; they buy similar sorts of things. Perhaps it is because they tend to think in a similar way or are attracted to similar things. Perhaps it is because they share similar personality quirks or because they have similar needs.

But simplistic thinking like this doesn’t tell us all that much. Not everyone who considers themselves to be tech-savvy will buy the same gadgets. Not all newlyweds will shop the same stores. There is nothing specific enough about these attributes that clients can really market to (without leaving most of the marketing plan to chance). Two-dimensional thinking, while simple to grasp, can hide the real pockets of potential in any marketplace.

The potential that managers are seeking lies in profitability. This seems like a fairly pedestrian idea, but it is the foundation of every business model. Beyond profitability, managers want satisfied customers and they want loyal customers. Of course managers want to identify profitable customers who are both satisfied and loyal, as this is where the greatest market potential lies. Marketers, in turn, focus on segmentation as a means of identifying potential profitability. But segmentation schemes are prone to falter because the segments that are developed - often based on a reliance upon individual demographic characteristics - do not accurately reflect the consumer landscape.

An accurate description of any potential customer can go so much further beyond the one or two dimensions that we might commonly think of first. Every client benefits from a better-developed understanding of who their most profitable or loyal customers are, as well as which segments are not making returns on a client’s investment (not every customer is a profitable one, not even if they are loyal!).

Segmentation should be incorporated to define the people who actually comprise the groups whose behaviors and attributes you discover within your research results to indicate loyalty, satisfaction or whatever it is that the client seeks to achieve. But this does not mean that sweeping segments solely account for consumer behaviors. The characteristics by which you measure your respondents should be expanded to include as many dimensions as you think exist in the real world, or at least as many as are pertinent. And you should always seek to execute research that falls in line with that wider picture of the world we live (and conduct research) in.

More tangible

The second fundamental challenge - determining the appropriate level of analytics - is more tangible than the difficulties associated with effectively articulating the parameters in which research ought to exist. The trouble with choosing the level of analytics is that depth of research analysis varies directly with the ease of understanding a researcher’s statistical evidence. In other words, the deeper and more “small-frame” the analytics go, the more blurry the big picture (the broader context of your research analysis) becomes. Choosing an inappropriate level of statistical complexity can be a professional pitfall because your research becomes separated from the greater context in which your research exists. Certainly, research results must not be statistically unstable, but they don’t need to prove the theory of relativity either! So the question remains: how intricate should your statistics and research analysis be?

Some researchers will try to explain the research landscape in terms more accessible to their clients by watering down the mathematics, thereby making it easier to follow and easier to swallow. And some folks even claim that a single question can offer a simple solution to complex research questions. But these researchers suffer from what we call “analytical plague”- dumbing-down complex ideas simply to avoid the heavy lifting required to understand and address complex issues. This does nothing but put the client at jeopardy; they might actually rely on that flimsy analysis!

On the other hand, we do not serve our clients by spewing gibberish, either. Jargon-filled, obtuse reports that seem encrypted with statistical terms usually elicit well-justified yawns from the corporate executives that our research endeavors to enlighten.

The end-goal is to have a level of analytics that is balanced somewhere between these two extremes. You must be able to execute statistical analyses that are accurate, but you must also be able to explain these analyses to your client without their eyes glazing over. Ultimately, the solution to this second challenge is heavily dependent upon your client, and what it is that they feel they need and what they are willing to pay for. But if you share a healthy relationship with a client - and you have the analytical capability to do so - it is often best to offer deeper analyses. Not because you stand to make yourself more profitable by doing so, but because accurate research and robust segmentation stands to make them more profitable.

Illuminates the world

As Albert Einstein famously said, “Make everything as simple as possible, but not simpler.” Don’t be afraid to use your specialized skill set. It’s why your client hired you! Improve your clients’ profitability by making sure you that your research illuminates the world that they compete (and we live) in - with all its complexities - and be sure that your analyses have the potency to make an action plan stick!