Editor’s note: Winslow “Bud” Johnson is president of the Stamford Marketing Group, a Stamford, Conn., consulting firm specializing in qualitative research.

E-commerce represents an unprecedented direct-to-customer marketing opportunity. The emerging information technology can put your marketing effort in front of people all over the world with lightning speed. Customers and prospects are all neatly segmented by their special interests, and all of this is done at a tremendous cost savings. At first glance, e-commerce appears to be a marketing manager’s dream. Unfortunately, it is not quite as easy as it appears.

The problem with e-commerce in the New Millennium is the large number of players. Customers and prospects are saturated with dot.com messages. Virtually every business segment is competing for their attention. Marketing on the Internet is like advertising to television viewers who all have thousands of channels to choose from. Today’s e-commerce marketers must identify clever ways to lure Internet surfers to their Web sites, and then motivate them to fully participate in the interactive opportunities they have carefully created.

The purpose of this article is to show you how on-line focus groups can be used to learn what motivates your Internet customers and prospects. We will discuss how this technique can help you determine how your target audience gathers information on the Web, and how they feel about the messages you are sending. We will present some of the perceived benefits of on-line focus groups as well as some of the concerns. Finally, we will provide a few key tips for the use of this new technique.

Traditional methods of e-commerce feedback

There are a number of ways managers are now measuring their e-commerce efforts. To quantify results, many are monitoring Web site traffic, and quantifying sales made directly from e-commerce. For qualitative measurements, some are taking on-line surveys, reviewing Web site ratings, and reviewing e-mail sent in by customers. Some are using traditional focus groups and one-one-one interviews to gain insight into the attitudes of e-commerce customers and prospects.

Ginger Atwater, Web manager at Burlington Coat Factory, is doing a lot of business on the Internet. She uses e-mail as a frequent indicator of how her customers feel about the Burlington Web site. “We get at least as much positive as negative feedback on the site. The Internet is a medium that lends itself well to communication. Customers have more access to the right people in our organization through e-mail than through many other means,” she says.

Kirsten Smith, marketing manager – Internet at Black & Decker, describes an on-line contest the firm conducted in which participants who answered a survey were eligible to win a free power tool. “We got 3,000 responses in three weeks on that. It was tremendous. All of the data fell within certain categories. I felt that it was a good survey for us. We didn’t get a lot of repeats,” she says.

Go deeper

On-line focus groups represent an opportunity to go much deeper than on-line surveys or e-mail. This technique goes behind the Web site traffic numbers and sales counts to determine why things are or are not happening. Because the Internet is the communication vehicle, the research targets the Internet user, and presents the questions in a format directly related e-commerce.

On-line focus groups take place over the Internet with text comments similar to a chat room. Like traditional focus groups, there are separate chat rooms for the respondent waiting room, the respondent discussion room, and the client viewing room. As with traditional research, audio and video files may be played to respondents, which is useful in researching off-line advertising designed to attract e-commerce. Unlike traditional focus groups, respondents and clients can log in from geographically dispersed locations.

Researching e-commerce with on-line focus groups

One of the benefits of using on-line focus groups for e-commerce research is that you can show respondents material in the same way that they would actually see it over the Internet. Rossella Clark of the wholesale marketing department of Select Energy feels that this represents a significant advantage. “You could use traditional groups, where you can get everybody set up with a PC, but that will cost a lot of money, and it would be a lot easier through on-line groups,” Clark says.

Julie Beggs, director of marketing information services at Bloomingdale’s, feels that on-line focus groups could be ideal for testing the functionality of a Web site. “We are moving to selecting merchandise for e-commerce. We want to ask people if they want to shop by trends versus just looking for shirts or skirts. We want to see their reactions to how easy or difficult this is. We also want to see reactions to pop-up messages or targeted responses, and I am trying to determine how we can target information to a person based on purchasing behavior,” she says - all applications for which on-line focus groups could work well.

Joan Emmer, research and planning manager for Philips Lighting Company, sees potential applications for on-line focus groups beyond e-commerce. “I think they could also be appropriate for non-computer related products and services if your target is people who are on the Internet a lot. For example, if you have a very young target audience, or college students who are Internet-literate, it would be very appropriate for that,” she says.

Benefits of on-line focus groups

Many researchers see unique advantages to on-line focus groups over other more traditional methods of qualitative research. Some of these advantages are specific to e-commerce, while others could apply to any research. For example, Ellen Brown, global market research manager - polishes for Reckitt Benckiser, feels that on-line focus groups are ideal for reaching certain professional respondents. “They would be really great for going to businesspeople who use the computer for their day-to-day work. Also, in the past I’ve had experience trying to recruit doctors and pharmacists. This would have been a great tool to get to them in their office, on their schedule, where they don’t have to take time out to travel to a facility. It is very difficult to get a three-hour block of their time.”

Philips’ Joan Emmer sees on-line focus groups as a potential money saver. “Doing traditional focus groups with the expense of traveling all over the place and taking the time out of the office is really overwhelming. For some specific applications on-line focus groups could be a very good option,” she says.

In addition, Select Energy’s Rossella Clark feels that on-line focus groups could be a significant time saver. “It takes a long time now between the time you decide to have a focus group and the time the groups are completed. The fact that you come up with an idea and then can get it done in a matter of days, and then get quick results, is a good thing. Also there is the fact that there is no travel involved and you can do it at your convenience.”

Burlington Coat Factory’s Ginger Atwater sees on-line focus groups as reducing Web site downtime. “The turnaround on the feedback is probably faster than the traditional way, and this shortens the time frame for making changes on your Web site,” she says.

Maritza DiSciullo, research manager for AT&T’s Customer Sciences, feels that a key advantage of on-line focus groups is that they can be conducted with people who are scattered around the country. “A good example is business-to-business research where you are trying to get in touch with CEOs. These people are scarce in number and short on time. It also applies to people who travel a lot. You are going to have a hard time nailing these people down to do a traditional focus group. If they know that they can be responding while one is in Italy and one in Mexico, then that works out well,” she says.

Select Energy’s Rossella Clark feels that on-line focus groups make it possible for key people to watch the research, which might not be possible with traditional focus groups. “An executive who’s on the road can log on from wherever they are. They don’t have to worry about being in the focus group location physically. Now a person doesn’t have to miss the group because they are in another location and can’t be in two places at once.”

Concerns with on-line focus groups

Researchers also voiced a number of concerns with on-line focus groups. One of those concerns was the inability to actually see the respondents during the focus groups. “Sometimes our marketers like to go to the groups because they like to see the respondents,” says Ellen Brown of Reckitt Benckiser. “They want to see how they react. What you don’t get on-line is the tone of voice and the inflections in the voice. When a respondent says she loves something, how do you know that she really loves it?”

Jill Nass, vice president of market research with the Chase Manhattan Bank, is concerned about a loss of control by not being able to see the respondents. “I worry about believing that the people are who they say they are in an on-line focus group,” she says. In a traditional group a client can see the respondents and send in a note to dismiss one if, for example, they are obviously not the age they said they were or if they are “professional respondents” who have been seen in other recent focus groups.

AT&T’s Maritza DiSciullo feels that in some cases there could be a problem with market representation. “Most people use the Internet for e-mail first. Then they branch out to doing information searches on the Web, such as for news or future purchases, and don’t usually get involved in long chat sessions until after that. On-line focus groups are basically a chat room, so you are dealing with a smaller population of Internet users. I think the people who tend to get recruited for on-line focus groups are probably somewhat more advanced Internet users.”

Rick Rocchi, marketing manager – Internet at Hershey Foods Corporation, is concerned about the credibility of on-line focus groups. “The people I am selling my results to internally are typically not passionate about the Internet,” he says. “Telling them you tested this for 90 minutes with some people on the Internet is going to lessen the likelihood of them believing the results.”

Julie Beggs of Bloomingdale’s agrees. “The credibility factor might come into play. Research is always questioned anyway. We have gotten to a comfort level with doing focus groups for some things where you don’t need a sample of a thousand people. When you put together a small group over the Internet, however, the question is, how credible is this?”

AT&T’s Maritza DiSciullo feels that one of the ways of reducing the concerns about the use of on-line focus groups is to run parallel studies. “I ran a few parallel studies where we ran a traditional focus group and then did the same topic on-line. We had to show people some advertising media alternatives. We got the same reactions in both types of research, right down to verbatim responses and emotions,” she says.

Look for a good fit

Here are some tips for conducting on-line focus groups.

  • Make sure the research fits the Internet language and culture. The Internet has its own language, one which Web-savvy consumers speak fluently and which may be alienating to others. “In my opinion, on-line focus groups are like dealing with an intercultural setting. It is like trying to compare focus groups with American consumers to those with Japanese consumers,” says DiSciullo. These language and culture differences should be considered when designing and interpreting the research.

Where possible, match the respondents’ levels of Internet experience. Ideally, all of the respondents in the same on-line focus group should have similar chat room experience. “A chat room can be overwhelming to a novice,” says DiSciullo. “An inexperienced respondent could have excellent feedback, yet may not be able to respond simply because the other, more experienced people are going too fast.”

  • Include a hardware profile in the screening questionnaire. “Find out what kind of computer the respondent has and how fast their modems are,” says DiSciullo. “Those hardware problems can impact somebody’s response rate. You can have somebody who is very intelligent, articulate, and has great opinions but if he is on a slow modem, he isn’t going to be responding as quickly as somebody else. The conversation may just go past him,” she says.
  • Consider mixing on-line and traditional focus groups. “I could see mixing on-line and traditional focus groups in the same study,” says Kirsten Smith of Black & Decker. “If you were launching a new product and you were trying to research the physical design of that product I would recommend traditional focus groups. If you were researching how to communicate the features and benefits of that product on your Web site, you could use on-line focus groups,” she says.
  • Make sure to involve technical as well as marketing people in the research. “The Webmaster should be involved for two reasons,” says Ginger Atwater of Burlington Coat Factory. “First, because the site’s technology is clearly going to affect the kind of feedback you get about the site. Second, the solution to whatever problems consumers identify is going to be developed by marketing in conjunction with the IT people. When you have a marketing person working with an information technology person the balance is better.”
  • The best way to get started is on a small project. “It’s a matter of getting your feet wet, and getting some experience with it,” says Joan Emmer of Philips. “You just have to try it. I would suggest starting off with a simple study, something that is not too complicated and is not a difficult recruit and that won’t have an earth-shattering business result. If you have the budget to do it, run your own parallel study using a traditional focus group and an on-line one,” she says.

Quality feedback

On-line focus groups can be an effective way to learn in-depth what customers want from e-commerce efforts. With them you can obtain quality feedback on Web sites, and can follow-up on traditional methods of gathering e-commerce feedback. Many researchers feel on-line focus groups can save time and money over traditional research techniques. Many also believe that they can be the best way to communicate with Internet customers in far-flung locations. Used properly, this qualitative research technique can help marketers better understand their opportunities in the ever-expanding e-commerce marketplace.