Using Mobile Phones to Gain Real-Time Customer Insights

Stephen DeAngelis

September 14, 2012

“Few marketing challenges are tougher than identifying and influencing what drives customers’ attitudes and behavior,” write Emma K. Macdonald, Hugh N. Wilson, and Umut Konu?. [“Better Customer Insight—in Real Time,” Harvard Business Review, September 2012 (registration required)] They explain:

“Traditionally, executives have relied on a combination of quantitative data from surveys (such as those that track customer satisfaction and brand image) and qualitative insights from focus groups and interviews. Unfortunately, both kinds of research suffer from a fundamental flaw: They rely on customers’ memories, which decay rapidly. Consumers frequently recall a company’s communications inaccurately; it’s not uncommon for people to claim they’ve seen a company’s TV ad at a time when the firm was not advertising.”

In a previous post entitled Are Social Media Sites Replacing Focus Groups?, I noted that companies have tried for years to find an alternative to focus groups. Sandy Thompson, Global Planning Director at Young & Rubicam, writes, “Like everyone else in marketing, I’ve put in my time behind the double-sided mirrors watching and listening to focus groups. Here’s what I’ve learned: Focus groups will never get to the truth.” [“Finally, The Truth About Focus Groups!” Huff Post’s The Blog, 30 July 2012] She continues:

“Focus groups … will fill your head with information but they cannot give you true understanding. But isn’t understanding the goal here? Focus groups are relics of the World War II era. Meanwhile, today’s consumers are bombarded with branding messages, and they are not going to pledge lifetime loyalty to a product just because their mom used it. They are smart, they know when someone’s selling them something, and they have their guard up. But many marketers haven’t changed how they get to know the opinions, the lives, and the feelings of the people they want to fall in love with their brand. They bring people into a cold, impersonal, and totally artificial setting and expect them to open up and act natural. They ask them the same old questions that they know to ask and think that, somehow, they’ll learn something new. Does this approach make any sense?”

Macdonald, Wilson, and Konu? note that a third alternative to surveys and focus groups is ethnographic research. They write:

“The only traditional technique that really allows companies to record the complete range of customer experiences is ethnographic research, in which researchers shadow individual consumers and watch their behavior. This approach, however, is both labor-intensive and expensive, and it’s also potentially misleading: It’s hard to untangle the individual customer’s quirks from general customer behavior. Worse, the ethnographic approach introduces another bias: The customer will probably have an unconscious desire to please the researcher, who is physically present, which will affect her reactions.”

Focus groups suffer from the same problem — an unconscious desire of participants to say what they think researchers want to hear. Macdonald, Wilson, and Konu? note that “corporations, therefore, face a dilemma. They must either rely on imperfect and biased memories or risk spending a ton of money on directly observing po­tentially unrepresentative behavior. Either way, the insights and data on which they base their market­ing decisions are inherently faulty.” They believe, however, that a better method for gathering consumer data has been developed that is more immediate and reliable than focus groups or surveys. The method is called real-time experience tracking (RET) and was developed by the market research agency MESH Planning. They claim it is “a new research tool [that] rises to this challenge.” They report, “Over the past two years a number of leading companies—including Unilever, BSkyB, PepsiCo, Schweppes, HP, Energizer, Microsoft, InterConti­nental Hotels, and SAS—have been using RET to in­form their marketing decisions.” Macdonald, Wilson, and Konu? continue:

“Real-time experience tracking was born of two in­sights. First, while a market researcher can’t eas­ily follow customers around 24 hours a day, those customers’ cell phones can, and unlike human ob­servers, they don’t sway people’s perceptions of ex­periences. The second insight was that although cus­tomers may interact with a company in thousands of ways, you really need to know only four things about each encounter: the brand involved, the type of touchpoint (TV ad, say, or call to the service center), how the participant felt about the experience, and how persuasive it was. (Did it make the customer more inclined to choose the brand next time?)”

One of the advantages of the RET method is that participants are willingly providing the information they submit. This bypasses privacy concerns that some other methods of data gathering often encounter. Participants agree to provide information for an entire month. Macdonald, Wilson, and Konu? write, “One might expect that it would be hard for RET participants to remain engaged in the program, given the level of commitment needed. But most find that the minimal extra effort involved is outweighed by the engaging nature of the process, and many report that they enjoy reflecting on their customer journey.”

 

The article contains a full description of the RET methodology along with its challenges and limitations. The authors note, however, “Insights gained from RET can be acted on immedi­ately — a great advantage in new product launches or marketing campaigns conducted in fast-changing environments.” They conclude:

“Because RET enables companies to assess and respond in real time to customers’ reactions to products, services, or branding efforts, it can play a central role in allowing customers to help design their own experiences with products. As RET and tools like it emerge, we expect that marketing will cease to be a game of stimulus-response and will evolve into a continual process of cocreation.”

The following video, which is narrated by one of the authors, provides a quick overview of the RET methodology.