Capture the power of the purse

Editor’s note: Martha Barletta is president of the Trendsight Group, a Chicago consulting firm.

How well do you understand your MVPs, your most valuable purchasers? I’m talking about women, of course. Women are the world’s most powerful consumers, and they are the largest, fastest-growing market in the world. How well do you understand them? I don’t just mean being able to rattle off the important target demographics or purchasing data. How do you quantify the effectiveness of your communications and interactions with them? How well does your brand resonate with women? Even brands and industries that have traditionally been the territory of men need to seriously dig into their data and make sure they are not alienating the “chief purchasing officers” - the ones actually controlling the checkbook - the women of the household.

Understanding the nuances of women’s relationship with your brand is crucial for marketers - and almost no one can afford to ignore this segment.

Why concentrate on women? Women have tremendous financial power.

  • American women by themselves are, in effect, the largest “national” economy on earth, larger than the entire (!) Japanese economy (Marketing to Women).
  • Over the past three decades (1970-1998), men’s median income barely budged (+0.6 percent after adjusting for inflation), while women’s has soared +63 percent (American Men and Women ).
  • Women bring in half or more of the household income in the majority of the United States.
  • Women control 51.3 percent of the private wealth in the United States (Federal Reserve, cited in PBS online, “To the Contrary, Hot Topics, Women & Philanthropy”).
  • Women control most of the spending in the household - about 80 percent.

The information above is just the tip of the iceberg. The largest wealth transfer in history is about to take place as the Baby Boomers inherit from their parents. In turn, because women generally outlive their husbands, the family assets will become concentrated in the hands of Boomer women.

Many companies don’t seem to realize women are the primary buyers of their products. For instance, take a look at women’s purchasing power in these historically male-dominated categories:

  • 68 percent of new cars (J.D. Power, reported in “Olds Markets to Women,” Detroit News, August 15, 1999).
  • 66 percent of computers (CondeNast/Intelliquest Survey, as quoted in Ad Age, 1997).
  • 60 percent of home improvement buyers (Lowe’s, per CEO Robert Tillman, cited on Forbes.com and quoted in Tom Peters presentation, June 1, 2003).
  • 53 percent of investment decisions (Securities Industry Association, 1998).
  • 51 percent of consumer electronics (Fast Company, 2002).

Companies in these industries are missing huge opportunities to grow their share and beat the competition.

What to keep in mind when designing research on women

Sociological studies show that women notice finer details than men. They will bring up things that men don’t find worth mentioning. This is important because in most categories the top competitors share the same basic characteristics. Differentiation lies in the details. Here are some ways to uncover those precious details.

  • Women respond better in all-female focus groups. Mixed-gender groups often default to male patterns of conversation and interaction. Women are less likely to interrupt or insist on their opinions, and they don’t offer as much information. In women-only groups, there’s often an unspoken “equal talk time” rule - they are more conscious of who is remaining silent and often encourage each other to speak. In women-only groups, women respond to truly free interaction with each other and “multi-talk.”
  • Women are very comfortable talking about personal things with virtual strangers. Get them talking with one another, instead of with the moderator. Encourage them to laugh and build on one another’s thoughts and you won’t be able to get them to stop giving you insights.
  • A non-traditional focus group approach I like is girlfriend groups, where acquaintances meet with the researcher at the home of one of the participants. The familiar environment and people make women comfortable to be themselves. In addition, it often places them closer to the point of product usage, which allows them to easily relay details that make a difference. And familiarity with each other keeps each of them honest.
  • Another qualitative favorite is the brand champion group, a mix of women who love your product along with some who are either unfamiliar with it or predisposed against it. Given time to get to know one another, brand champions will “sell” your product by answering questions from the prospects. Observing the phenomenon of word of mouth will essentially tell you how to overcome resistance to your product.
  • Online chat rooms where experts on a topic related to your product transform the session into an informal focus group by capturing the transcripts and interpreting them later are another way to observe the word-of-mouth phenomenon.

What about quantitative research?

Quantitative marketing research recruitment can be fairly easy with women. Many women love surveys and quizzes. Magazines are filled with them. Surveys help women learn about themselves and see how they compare with others in the results. Often, this learning is the only necessary incentive. Run a survey via e-mail or online, quickly tabulate the results, and share them with the participants. It’s cheap and simple.

But my big word of caution to designers of quantitative marketing research is to critically evaluate all questions included. Many researchers don’t even know women shop and buy differently than men, so I find questionnaires to be replete with errors and oversights that may look unimportant but can drastically affect the validity of the response.

For example, a phone surveyor called me once on behalf of an apparel retailer. The questions were laughable, things like “Please rate the relative importance of quality, price, selection and fit in deciding where you shop” or likewise for “what you buy.” All of those are important, and one is never “more important” than another - not always, nor even as a general rule. It’s the trade-offs among these factors that determine value and drive what she buys.

For example, what does it mean when I respond that while I crave the quality of an Armani suit, I’m still not willing to pay Armani prices? Is “quality” important to me or not? Suppose I’m willing to pay for an Armani if I score a one-of-a-kind bargain at Loehmann’s - does that mean I don’t care about selection when I shop at Nordstrom? Absurd.

You could reasonably point out that these objections apply equally well to men as to women - and indeed, you would be right. (Which makes you wonder why you ever see silly questions like the above on any questionnaire!) The difference is that they apply to a considerably greater degree with women. Men’s thought processes tend to be more linear, single-track and directed toward efficiently finding a solution to a problem. As they are proceeding down a decision path, they use criteria like the above to screen out options, until they come to one that provides an acceptable value.

Women’s decision-making tends to be more multi-minded and integrative. They tend to view shopping as more of a learning process, educating themselves on what options they have, and typically adding on criteria as they learn more. It is not unusual for a woman to shift back to an earlier stage of the decision process as she learns something later on that might cause her to even change categories.

For example, she may have decided to buy an SUV because her friends all love theirs and she likes the looks of the new models. However, once on the showroom floor, she may see a new minivan that has some great storage solutions and fuel mileage. Suddenly, she’s including minivans in her consideration set, and has added two new criteria to the qualifying list. Most men are uncomfortable with that kind of change in direction, they see it as a disruptive shift in strategy.

So while men shop through a process of elimination, looking for “a good solution,” women add and balance criteria, looking for “the perfect answer.” Therefore, the “forced choice” methodology so popular with quantitative surveys obscures women’s real responses because female decision-making is more integrative and contextual than men’s. Unless your question is presented relative to a specific purchase, her real answer (not that most questionnaires give her this option) is “it depends.”

A better use of quantitative research is to dig deeper on “why.” Rather than asking her to rate the importance of quality, ask her how she assesses quality - by fabric, details, designer name, etc. Yes, it makes the research more complex, costly and difficult to interpret. But unless your research reaps useful information, what’s the point of doing it at all?

In written or online questionnaires, it’s better to leave some room for write-in answers. Give your consumers a chance to tell you something you didn’t know. If you’ve pre-programmed all the answers and limited her ability to give you input, how can she help you identify the details that would cause her to choose your brand over your competitor’s? Very few researchers provide women with open-ended questions, and I think it’s a mistake.

Implications

Marketing to women is not rocket science. Yes, women are more complicated, but improving your female marketing effectiveness is not difficult or more expensive. Companies do not need to worry about creating two research initiatives, one for women and one for men. That’s ineffective and costly - just dig into the person who’s doing most of the buying...you know who she is! Many companies have found that when you improve your marketing to women, customer satisfaction among men rises as well. That’s because when you meet women’s more demanding expectations, you’re generally exceeding the expectations of men.

Ask yourself, how can you help your company be more effective at reaching the chief purchasing officer of your product? How well do your communications work against this CPO? Do you have information on how women seek out and investigate your brand? Do you quantify the impact of the various marketing elements on women, noticing what particular messages and channels combine for stronger results?

Women make the majority of decisions about spending for their households. According to one estimate, they spend over $7 trillion a year in the United States alone. It is imperative for all businesses to examine their feminine side. Marketers who communicate effectively to women will see their businesses prosper, and those who don’t will be left behind.