lorraine, Author at Pollfish Resources

What is Experimental Research & How is it Significant for Your Business

Experimental research uses a scientific method for conducting research, employing the most methodical research design. Known as the gold standard, it involves performing experiments to reach conclusions and can be conducted based on some of the findings from previous forms of research.

Logically, it would follow correlational research, which studies the relationships between variables. It can also follow causal research, a kind of experimental research in itself, as it establishes cause and effect relationships between previously studied variables.

Experimental research is typically used in psychology, physical and social sciences, along with education. However, it too can be applied to business.

This article expounds on experimental research, how it is conducted, how it differs from other forms of research, its key aspects and how survey studies can complement it.

Defining Experimental Research

Experimental research is a kind of study that rigidly follows a scientific research design. It involves testing or attempting to prove a hypothesis by way of experimentation. As such, it uses one or more independent variables, manipulating them and then using them on one or more dependent variables.

In this process, the researchers can measure the effect of the independent variable(s) on the dependent variable(s). This kind of study is performed over some time, so that researchers can form a corroborated conclusion about the two variables.

The experimental research design must be carried out in a controlled environment.

Throughout the experiment, the researcher collects data that can support or refute a hypothesis, thus, this research is also referred to as hypothesis testing or a deductive research method.

The Key Aspects of Experimental Research

There are various attributes that are formative of and unique to experimental research in addition to its main purpose. Understanding these is key to understanding this kind of research in-depth and what to expect when performing it.

The following enumerates the defining characteristics of this kind of research:

It includes a hypothesis, a variable that will be manipulated by the researcher along with the variable that will be measured and compared.
The data in this research must be able to be quantified.
The observation of the subjects, however, must be executed qualitatively.
It can be conducted in a laboratory in field settings, i.e., field research.
1. The latter is rarer, as it is difficult to manipulate treatments and to control external occurrences in a live setting.
It relies on making comparisons between two or more groups (the variables).
Some variables are given an experimental stimulus called a treatment; this is the treatment group.
The variables that do not receive a stimulus are known as the control group.
First, researchers must consider how the variables are related and only afterward can they move on to making predictions that can be tested.
Time is a crucial component when putting forth a cause-and-effect relationship.
There 3 types of experimental research:
1. Pre-experimental research design
2. True experimental research design
3. Quasi-experimental research design

The Three Types of Experimental Research

Experimental research encompasses three subtypes that researchers can implement. They all fall under experimental research, differing in how the subjects are classified. They can be classified based on their conditions or groups.

Pre-experimental research design:

This entails a group or several groups to be observed after factors of cause and effect are implemented.

Researchers implement this research design when they need to learn whether further investigation is required for these particular groups.
Pre-experimental research has its own three subtypes:
1. One-shot Case Study Research Design
2. One-group Pretest-posttest Research Design
3. Static-group Comparison

Quasi-experimental Research Design

Representing half or pseudo, the moniker “quasi” is used to allude to resembling true experimental research, but not entirely.

The participants are not randomly assigned, rather they are used when randomization is impossible or impractical.
Quasi-experimental research is typically used in the education field.
Examples include: the time series, no equivalent control group design, and the counterbalanced design.

True Experimental Research Design

This kind of experimental research design studies statistical analysis to confirm or debunk a hypothesis.

It is regarded as the most accurate form of research.
True experimental research can produce a cause-effect relationship within a group.
This experiment requires the fulfillment of 3 components:
1. A control group (unaltered) and an experimental group (to undergo changes in variables)
2. Random distribution
3. Variables can be manipulated

Why Your Business Needs Experimental Research

There are various benefits to conducting experimental research for businesses. Firstly, this form of research can help businesses test a new strategy before fully engaging in/ launching it.

The strategy can involve anything from content marketing strategy, to a new product launch. This is especially useful for technology companies, which conduct experimentation frequently. In fact, this kind of research is essential to an R & D (research and development) department.

This makes experimental research a much-needed effort when it comes to spurring innovation. Whether it involves a slight rebranding or an upgrade of products, experimental research guides these campaigns in a science-backed manner.

Secondly, a business must excel in meeting customer needs. Customer experience is an overwhelmingly important side of any business, as customers are willing to make on-the-stop purchases and pay more for a good CX.

As such, each product addition and change in a customer journey must be carried out wisely. Businesses ought to avoid creating unwanted services, or those that cause any aversion within customers. Instead, they should only invest in the most profitable services, products and experiences, a feat that cannot be accomplished solely on guesswork.

Experimenting allows brands to understand customer preferences and changes in their behaviors, as the experiments create stimuli and changes in independent variables.

Additionally, experimental research grants companions an understanding of their business environment. In turn, this helps them predict outcomes, or create hypotheses about outcomes to guide them in further research, if need be. For example, a business may consider testing the reactions of its competitors should it raise its costs on various offers.

Aside from discovering if this yields a profitable change, it can discover how companies in the same niche respond and if those responses drive more sales, etc.

Key Independent Variables

Prices
Digital user experience (DX) such as new site features
Advertisements
Marketing activity (SEO, SEM, social media announcements, retargeting, etc.)
Season
Inventory (new products or upgrades)
Interactions with sales agents

Key Dependent variables

Sales
Demand
VoC feedback (whether positive or negative)
Site traffic
In-store visits
Revenue
Time spent on a website, bounce rates, etc.

An Example of Experimental Research for Business

Market researchers can apply experimental research to a wide breadth of testing needs. Virtually anything that requires proof, confirmation, or is clouded by uncertainty can put experimentation into practice.

The following is an example of how a business can use this research:

A product manager needs to convince the higher-ups in a denim company to launch a new product line at a particular department store. The objective of this launch is to increase sales, expand the company’s floor presence and widen the offerings.

The manager has to prove that this line is needed in order for the company to pitch the idea to the department store. The product manager can then conduct experimental research to provide a strong case for their theory, that a new line can raise sales.

The product manager performs experimental research by executing a test in a few stores, in which the new line of denim is sold. These stores are varied in location to signify the target market sales before and after the launch. The test runs for a month to determine if the hypothesis (the new line resulting in increased attention and sales) can be proven.

This represents a field experiment. The product manager must heed the sales and foot traffic of the new product line, paying attention to spikes in revenue and overall sales to justify the new line.

Experimental Research Survey Examples

Survey research runs contrary to experimental research, unlike the other main forms of research such as exploratory, descriptive and correlational research. This is because the nature of surveys is observational, while experimental research, as its name signifies, relies on experimentations, that is testing out changes and studying the reactions to the changes.

Despite the contrast of survey research to experimental research, they are not completely at odds. In fact, surveys are a potent method to gain further insight into an existing experiment or understand variables before conducting an experiment in the first place.

As such, businesses can adopt a wide variety of surveys to complement their experimental research. Here are some of the key forms of surveys that work in tandem with experimentation:

The quantitative survey
1. Discovers the aspects of statistical significance within variables.
2. Helpful in that causal research is quantitative in essence.
The retrospective survey
1. Delves into past events, occurrences and attitudes in regards to the variables.
2. Shows whether the variables changed and how so.
The prospective survey
1. Can find causative elements between variables over a period of time.
2. Useful for formulating hypotheses.
The customer experience survey
1. Helps businesses zero in on variables that contribute to or result from certain kinds of customer experiences.
2. Allows businesses to test CX in relation to the responses from this survey.
The pulse survey
1. Measures various matters critical in a business or organization; surveys employees.
2. Deployed more frequently, so variables can always be continually tracked.
The qualitative survey
1. Helps answer the what, why and how with open-ended questions.
2. Extracts key high-level information in depth.

How Experimental Research Differs from Correlational, Exploratory, Descriptive and Causal Research

Experimental research differs from exploratory, descriptive and correlational research in self-evident ways. It is, however, often conflated with causal research. However, they too have notable differences.

Causal research involves finding the cause-and-effect relationships between variables. Thus, it too employs experimentation. However, this means that causal research is a form of experimental research, not the other way around.

Experimental research, on the other hand, is fully science and experiment-based, as it chiefly seeks to prove or disprove a hypothesis. While this largely involves studying independent and dependent variables, as it does in causal research, it is not solely based on these aspects. Instead, it can introduce a new variable without knowing the dependent variable or experiment on an entirely new idea (as in the example used in the previous selection).

Causal research looks into the comparison of variable relationships to find a cause and effect, while experimental research states an expected relationship between variables and is bent on testing a hypothesis.

As far as comparisons to correlational research go, while experimental research also studies the relationships between variables, it functions far beyond this by manipulating the variables and virtually all subjects involved in experiments.

On the contrary, correlational research does not apply any alterations or conditioning to variables. Instead, it is a purely observational research method. As such, it merely detects whether there is a correlation between only 2 variables. In contrast, experimental research studies and experiments with several at a time.

Exploratory research is vastly different from experimental research, as it forms the very foundation of a research problem and establishes a hypothesis for further research. As such, it is conducted as the very first kind of research around a new topic and does not fixate on variables.

Descriptive research, like exploratory research and unlike experimental research, is conducted early in the full research process, following exploratory research. Like exploratory research, it seeks to paint a picture of a problem or phenomenon, as it zeros in an already-established issue and delves further, in pursuit of all the details and conditions surrounding it.

Thus, unlike experimental research, it only observes; it does not manipulate variables in any capacity or setting.

The Advantages and Disadvantages of Experimental Research

Experimental research offers several benefits for researchers and businesses. However, as with all other research methods, it too carries a few disadvantages that researchers should be aware of.

The Advantages

Researchers have a full level of control in an experiment.
It can be used in a wide variety of fields and verticals.
The results are specific and conclusive.
The results allow researchers to apply their findings to similar phenomena or contexts.
It can determine the validity of a hypothesis, or disprove one.
Researchers can manipulate variables and use them in as many variations as they desire without tarnishing the validity of the research.
It discovers the cause and effect among variables.
Researchers can further analyze relationships through testing.
It helps researchers understand a specific environment fully.
The studies can be replicated so that the researchers can repeat their experiments to test other variables or confirm the results again.

The Disadvantages

It involves a lot of resources, time and money, as such, it is not easy to conduct.
It can form artificial environments when researchers unwittingly over-manipulate variables as a means of duplicating real-world instances.
It is vulnerable to flaws in the methodology, along with other mistakes that can’t always be predicted.
Flawed experiments may require researchers to start their experiments anew to avoid false calculations, measuring results from artificial scenarios or other mistakes.
Some variables cannot be manipulated and some forms of research experiments are too impractical to conduct.

How to Conduct Experimental Research

Experimental research is often the final form of research conducted in the research process and is considered conclusive research. The following explains the general steps required to successfully complete experimental research.

1. Identify your research subject, a question surrounding it and its variables.
  1. Form a specific research question.
  2. Gather all available literature and other resources around the subject.
2. Conduct secondary research around the subject and primary research via surveys.
3. If the topic involves a research process you have already begun, for instance in exploratory, descriptive, correlational or causal research type, gather together the facts you already have and hand.
  1. Consider how they relate to your question and how they line up with the secondary research you conducted.
4. After your initial studies, form a hypothesis.
5. Design a controlled experiment.
  1. First, decide which variable(s) is dependent/ independent (if it doesn’t involve experimenting).
  2. Decide how far to vary the independent variable.
  3. In the experiment, manipulate the independent variable(s).
  4. Measure the dependent variable(s) while you study the independent variable(s) alongside.
  5. Make sure to control potential confounding variables.
6. Assign subjects to their designated experimental treatment groups.
  1. Keep the study size in mind; a larger study pool creates statistical findings.
  2. Assign your subjects to “treatment” groups randomly, with each to receive a different level of “treatment.”
7. Use a control group, which receives no manipulation. This shows you the test subjects as they appear/behave without any experimental intervention.
8. There are 2 types of groups for assigning your subjects:
  1. A completely randomized design vs a randomized block design.
    1. Completely randomized design: every subject gets randomly assigned to a treatment.
    2. Randomized block design: aka stratified random design, subjects get first grouped based on a shared characteristic, then assigned to treatments within their groups at random.
  2. An independent measures design vs a repeated measures design.
    1. Independent measure: subjects receive only one of the possible levels of an experimental treatment.
    2. Repeated measures design: every subject gets each of the experimental treatments consecutively, as their responses are measured. It also refers to measuring the effect of an emerging effect over time.
9. Continue experimenting on variables as needed, take measurements and take notes.
10. Based on your experiment(s), put together a logical conclusion. It is possible that it may need testing over time.

Using Experimental Research and Going Further

Although experimental research can be very complex, this research method is the most conclusive. Using a scientific approach, it can help you form tests on various business matters. While it is critical for understanding your target market’s and customers’ existing behaviors, it can also be used to experiment on a wide variety of other matters.

Before launching a new product, or an updated one, for example, you can conduct an experiment to understand the product in action. This helps you avoid any glitches or undesirable qualities that will incur problems for your customs and a bad reputation for your brand.

Experimental research is not for every business, yet if you decide to implement this form of research, consider using surveys in tandem. An online survey platform can help you establish and distribute your surveys to a wide network via organic sampling to avoid biases.

Although it isn’t a requirement, in today’s age of excelling in customer experience (CX), it is of the essence to have as much data on your target market as possible. An online survey tool makes this possible.

by lorraine

Understanding Customer Behavior with Market Research

Customer behavior is one of the foremost areas of concentration in marketing, as consumers are the bedrock of a company’s success.

Businesses must therefore understand their customer behaviors in order to suit their needs and drive revenue. In fact, 66% of customers expect businesses to understand their needs and expectations.

But there is far much more to customer behavior than customer desires and expectations. This concept encompasses several facets of customer actions, along with the driving force behind them.

This article explores customer behavior, its importance, aspects and how a well-established campaign of market research techniques allows businesses to be well-acquainted with the customer behavior within their target market.

Defining Customer Behavior

Also called consumer behavior, customer behavior denotes the study of customers, particularly those in a target market, including the processes they use to choose, consume and discard products and services.

This field of study involves recording and examining customers’ mental, behavioral and emotional responses. Observing customer behavior goes beyond studying behaviors in a customer journey, that is, the actions customers take prior to making a purchase.

Rather, consumer behavior studies how customers choose products, why they avoid certain products, their buying behaviors, along with how they interact with a product or service. Thus, this concept transcends looking into what customers want and don’t want.

When studying these behaviors, researchers often incorporate scientific approaches, using notions from psychology and economics and even chemistry and biology.

Studying customer behavior can also involve studying organizations, especially for B2B businesses. However, B2C businesses can also stand to scrutinize companies as a kind of competitive analysis.

Consumer behavior is the study of individuals and organizations and how they select and use products and services. It is mainly concerned with psychology, motivations, and behavior.

The Key Aspects that Customer Behavior Investigates

As aforementioned, customer behavior takes various elements of customers into account, going beyond its subsets of customer journeys and customer buying behavior, which themselves span different concepts.

The following enumerates several key aspects that customer behavior encompasses.

Buying habits, including locations, devices and frequencies
Social trends and background factors that influence customers to make or avoid purchases
Customer sentiment around product/service alternatives, such as related products/services, those from different brands
Preferred methods of purchasing such as in-store versus online or both, at a large retailer or at a mom-and-pop shop, etc.
Behaviors of customers as thy shop
How customers search for companies
How customers find businesses during their research
Customer reasoning behind different alternatives
How customers are influenced by their environments such as their friends, media, culture and other target market members
How marketing campaigns influence or affect their behaviors

The Importance of Examining Customer Behavior

Studying this concept may appear to be laborious at worst and tedious at best, however, brands ought to avoid omitting it. This is because the aspects of customer behavior paint a critical picture of who customers are, allowing businesses to market and cater to them accordingly.

Understanding the customer behavior of customers allows companies to adapt and improve their marketing campaigns, sales promotions, customer service and more. Most importantly, it allows brands to influence their customers more productively.

Additionally, by understanding how customers choose, consume and discard products, businesses can identify issues in the products themselves and make innovations. In this way, studying customer behavior helps with product-related issues such as customer development and product satisfaction.

Businesses can therefore study it to find gaps and flaws in existing products and improve upon them. Or, they can create products with alternative features and even new products to gain a competitive advantage.

Studying consumer behavior also allows marketers to present their products more effectively, so that they can drive a maximum impact. That way, customers will be more keen on interacting with a business, whether they’ve long known about it or recently discovered it.

When customers engage with a business more frequently, they become far more exposed to marketing and advertising messages that can influence them to make purchases. In this way, engaging with a company, whether it is viewing their content or browsing their offerings lodges that company in customers’ minds, which is key for brand awareness.

Generally speaking, it is also ideal for customers to have businesses on their minds subconsciously. In fact, a Harvard Business School professor declares that 95% of purchases are made subconsciously in his book, How Customers Think: Essential Insights into the Mind of the Market. This book also discovered that the biggest drivers of unconscious urges are emotions.

All in all, examining consumer behavior enables businesses to become more attuned to their customers, thereby allowing them to better tailor their marketing efforts and retain customers for the long term.

Customer Behavior Patterns

It is important to identify the patterns that makeup customer behavior. Patterns are not to be confused with buying habits, as the latter refers to inclinations for an action that can become spontaneous, whereas patterns exhibit predictable occurrences.

Customer behavior patterns are also contrary to buying habits in that patterns are indicative of groups, while habits are more unique and individual-based.

The following explains the four customer behavior patterns:

Items purchased: Businesses should study their customers’ shopping carts, as they reveal exactly what customers buy and how much of it they buy. Patterns usually show that customers buy everyday-use items in larger quantities and more frequently, while luxury items are bought less frequently and in smaller quantities.
1. Customers tend to buy products based on the products’ perishability, a unit of sale, price, number of users of the product and the buying power of the customer.
Place of Purchase: Customers usually shop at various stores, even when all of their intended products are available at just one. This largely depends on the accessibility of getting to various stores. When customers are not restricted to just one store due to transportation limitations, they are at liberty to choose items from multiple locations.
1. Businesses must study place of purchase patterns, in that it will reveal customers’ choice of place, helping marketers understand which areas their customers visit.
Purchase Method: The way a customer chooses to buy products divulges the kind of customer that they are. That is because there are various purchase methods, all of which tie into a customer journey.
1. Customers can window shop online, then make up their minds at home and buy a product online. Or, they may buy a product in-store, via different payment options such as cash, debit or credit card.
2. Businesses that gain this kind of insight into behavior patterns help them find ways to make customers buy again and more frequently.
3. This pattern can also help businesses upsell products.
Frequency and Timing of Purchase: Customers exhibit different times and frequencies of purchase. Regarding the former, they won’t all buy during business hours, given the prevalence of e-commerce, which allows them to shop at the earliest and latest parts of the day.
1. Businesses can meet customer demands by studying their purchase timing and frequency in order to serve them better.
2. Studying these concepts will help businesses adapt to regional (and global) time differences, along with seasonal variations.

The Things That Affect Customer Behavior

There are various influences and facets that can affect how customers behave. Businesses ought to acclimate themselves with these customer behavior factors, in that they all have a bearing on customer behavior and behavior patterns in one way or another.

When studying customer behavior based on these factors, businesses will be able to understand it more holistically. This helps in market segmentation and building customer personas, two market research tactics that allow businesses to gain a deeper understanding of their target market.

The following lists the critical factors of customer behavior:

Purchasing power: even the wealthiest of customers are constrained to some sort of budget or need to buy things within their means. Thus, much of what customers buy depends on their purchasing power.
Marketing campaigns: Specifically designed to persuade customers as well as reel in new ones, marketing campaigns have the capability to influence buying behaviors, when done correctly. They can prompt customers to switch brands or opt for a more expensive product with the correct messaging — which requires understanding your customers.
Personality traits: Personality affects many kinds of behavior, including customer behavior. These spring from background and upbringing, which affect how people will behave in different settings. Some customers will be drawn to events (grand openings, sales, etc.) due to extroversion, while others may not be and some may fall in between.
Personal preferences: The way customers choose purchases often relies on their personal preferences. Advertising and marketing campaigns can surely affect these but some preferences are unyielding. For example, a vegan will not buy animal-based products, while a meat lover is not going to shop for exclusively vegan items. Businesses should therefore be well-acquainted with the preferences of their target market.
The economy: Economic conditions play a role in customer behavior, especially in relation to more expensive products; positive economic environments are bent on making customers more willing to indulge. In times of inflation, consumers are less likely to spend on expensive items, as well as make frequent purchases. Negative economic conditions are fruitful for businesses to introduce promotions and bargains.
Group influence: Peer pressure and the opinions of others can also weigh heavily on buying and usage decisions. When customers’ friends and peers speak negatively or positively about an item or brand, it affects the way the customers perceive it. In some cases, group influence provides a setting of brand advocacy, while at other times, it can cause major reputational damage to a business.
Social trends: Related to group influence, social trends set the scene in terms of what is popular and acceptable. From social media, to movies, blogs and podcasts, various talking points and fads can form and leave strong impressions among customers. Some of these platforms provide a breeding ground for new trends, the kinds that marketers can access, depending on their budget and strategy.

How Market Research Helps Businesses Understand Customer Behavior

Conducting market research enables businesses to understand all the key facets of customer behavior. There is much involved in market research, all of which can help marketers deliver more effective campaigns.

First off, market research encompasses a wide breadth of studies, from secondary research to primary research and from quantitative research to qualitative research. There is a vast pool of available resources, i.e., secondary sources available. These can take the form of industry news sites, statistics sources, published studies and more.

While secondary research is an important starting point for conducting market research, it does not address all the specific needs that a business may have, let alone the specific questions that businesses intend to probe their customers with.

As such, all businesses should turn to primary sources to understand their consumer behaviors. There are different routes for market researchers to take on this front; effective survey studies are the most useful. This is because surveys allow researchers to understand where their target market lies in all the factors and patterns of customer behavior.

For example, market researchers can conduct surveys to learn more about their customers’ purchasing power and how it relates to what they buy and how much. In addition, they can qualify only certain people from taking a survey, so that they can study respondents who fall within a particular income bracket.

Another example involves surveying customers based on their awareness levels of cultural trends and their opinions thereof.

In relation to studying customer buying patterns, surveys provide value, in that customers can ask detailed questions about all patterns, whether they are concerned with purchasing methods, the place of purchase, frequency, etc.

A strong online survey platform will allow businesses to gain a deep understanding of these aspects, through the use of advanced skip logic, which routes survey respondents to appropriate follow-up questions based on their answers to previous questions.

Finally, surveys allow market researchers to make decisions in an organized way, as they help form a customer behavior analysis report. This report reveals:

How customers behave while researching, browsing products and purchasing
How customers use products
How long customers use their products
What customers think and feel about different brands and product options
How their environments affect their behavior

Improving Business Goals and Scaling by Understanding Your Target Market

Customer behavior to a business is like blood to mammals. While this may sound dramatic, it analogizes the importance of understanding your target market’s behavior. When businesses fail to study their customers’ behaviors, they are remiss on so many meaningful opportunities.

Thus, marketing campaigns of all sizes and calibers are at a much larger risk of failing. Market research, particularly survey research helps combat ignorance of customer behavior. This is because surveys give researchers the freedom to study any factor and pattern that relates to this behavior, arming them with critical insights on how customers shop throughout their journeys.

The most crucial component of survey research is using the correct online survey platform. Not all surveys offer advanced skip logic and can qualify respondents based on various demographics and psychographics. Thus, businesses and market researchers must invest in an online survey tool wisely, as it can make or break any market research campaign.

by lorraine

How to Use Concept Rules in Your Monadic and Sequential Survey

What can I achieve with concept rules?

With concept rules, you can differentiate the follow-up questions a respondent gets and obtain better insights from the test. The evaluation questions of the test will remain the same for all concepts, no logic can be applied within the questions of the test.

By using concept rules in your monadic or sequential test, you can direct the respondent - after he finishes with the evaluation questions, to follow-up questions curated specifically for the concept or concepts he got.

For example, for a monadic test, you can make follow-up comparison questions that test how a respondent perceives the product he saw in comparison to another one.

How do concept rules work?

You can apply concept rules at the AB group, so that when the respondent finishes with the questions of the AB, to be redirected to a specific question outside of the group based on the concept they got.

You can also apply complex rules containing concept rules, in the case you want to combine specific answers from regular questions with concepts shown.

Add a monadic or sequential test to your survey
Open the logic page

A. For simple rules:

Select the question or the ab test group, you want to apply the rules
In the rule, you can select the “if concept at” and pick the concept you want to apply the rule
You can add rules for all concepts or for some of the concepts

For example, let’s assume that you want to conduct a monadic test for 3 soft drinks, and have the respondents compare 2 out of these 3 in the case they got one of these 2 in their monadic.

Pollfish Researcher Dashboard

B. For complex rules, combining concepts with answer questions:

i. Select the question or the ab test group, you want to apply the rules

ii. In the rule, you can select the “if concept at” to pick the concept you want to apply the rule, click “Add” and select “if answer at” to pick the question’s answer you want to add.

For example, let’s assume that you want to conduct a monadic test for 2 soft drinks, and drive the respondent to answer a specific follow up question provided that he has also given a specific answer to a regular question (outside of the A/B)

Pollfish Researcher Dashboard

What is the mobile flow a respondent gets with concept rules applied?

For the first case of rules(2a), the respondent will follow the following flow: Pollfish Survey

For the second case of rules(2b), the respondent will follow the following flow:

Pollfish Survey

Or this: Pollfish Survey

Can I combine a sequential test with concept rules?

Yes, for a sequential test, you can apply concept rules with complex logic if needed. For example, you can conduct a sequential test for a respondent to view 2 out of 3 concepts, and based on the concepts he got, make a comparison after the sequential questions finish.

Here you can find how to set up such a sequential test with a follow-up comparison question:

Pollfish Researcher Dashboard

Here you will preview what the respondent gets: Pollfish Survey

by lorraine

Understanding the Customer Acquisition Cost (CAC) and How Surveys Lower It

Acquiring new customers can be costly, making it imperative for businesses to understand their customer acquisition cost or CAC. It is especially important to attempt to reduce this cost, given that acquiring a new customer costs five times more than retaining an existing customer.

Companies also need to contend with balancing their CAC with the worth that a new customer brings to their business.

While customer retention carries a larger value, as existing customers are 50% more likely to buy a new product from a business and 31% more likely to spend more per order, attracting new customers still carries weight in sustaining a business.

That is because in order to retain customers, a business must first gain customers in the first place. Additionally, not all customers will become repeat buyers. Thus, acquiring new customers is generally favorable.

This article explains the customer acquisition cost, how to calculate it, its role in a customer’s overall worth, or customer lifetime value (CLV) and how surveys can help minimize the cost.

Understanding the Customer Acquisition Cost (CAC)

Businesses funnel most of their budgets into their target market, whether it is to understand it via market research techniques, cater to it to boost customer satisfaction or make potential customers aware of it through brand awareness campaigns — all in the name of maintaining a steady flow of customers.

As such, businesses work to acquire new customers and the customer acquisition cost measures the monetary value of acquiring them.

The customer acquisition cost is a metric that dictates the total cost of gaining a new customer, taking into account the expenses incurred from sales and marketing.

Essentially, this metric keeps track of all the money that a company has spent attempting to convince a non-customer into becoming a customer — but only when the targeted individual makes a purchase, thus becoming a customer.

The CAC can also refer to the cost of gaining new leads or a new subscriber.

The objective goal of any business is to keep the CAC at a minimum, as a lower customer acquisition cost entails less labor and resources to convert a potential buyer. Additionally, a low CAC creates a quicker gateway to higher profits and revenue.

The Importance of the Customer Acquisition Cost

The customer acquisition cost is critical to track in a business’s marketing budget — but it carries much more importance than just another logistics matter.

Firstly, the CAC is one of the most expensive investments a company can make, as it incorporates a variety of practices and disciplines to reel in new customers. It relies on the following, all of which requires channeling monies:

advertising
SEM
SEO
content marketing
event marketing
social media
PR
branding

In addition to the cost of these activities, companies also invest in human capital, many of which are full-time employees, to carry out these activities. Thus, the most expensive aspect of the CAC is employee salaries. On top of that, some employees are also paid a commission.

The CAC is therefore a major investment and businesses must keep continuous track of it. Only by doing so can they optimize it, therefore lowering it, saving money for the business and obtaining leads quicker.

Businesses should also be wary about their cost of acquisition in order to fuel growth. After all, in order to retain customers, you need to have a steady pool of them.

When businesses neglect to calculate their CAC, they aren’t gauging how effective their marketing and sales campaigns are, whether they are gaining more customers and how valuable those customers are for the long term.

Thus, many key aspects of the business follow suit to this kind of negligence, such as ROIs decreasing. A high CAC can also lead to declining revenue, directly impacting a business’s sustainability for the worse. When the revenue continues to decline with no assessments on the CAC and therefore no plans at curbing it, a business becomes at great risk for going out of business.

When and How to Calculate Customer Acquisition Value

Businesses have the option of examining their customer acquisition value within different timeframes. This involves calculating the CAC once a year to understand it on an annual basis, as well as reviewing it at regular intervals.

It is apt for businesses to measure their CAC on a quarterly basis, given the significance of the quarter and that businesses tend to measure the performance of other business activities, such as brand tracking.

Businesses can also calculate their CAC on a campaign-specific basis, should they seek to understand how a specific campaign affects their CAC.

To calculate your customer acquisition cost: first, you must determine the time period to evaluate such as a month, quarter, year, etc. This will allow you to focus your analysis. Then, gather your marketing, sales and all the other expenses used to acquire new customers.

Plug those variables into the following formula:

CAC = (add all costs of acquiring new customers) / the total number of new customers gained during a time period

For example, a jewelry company that spent a total of $3,500 on marketing collateral and mini-campaigns to draw more customers to its online store and gained 100 new customers would have the following CAC.

CAC = $3,500 / 100

CAC = $35

How to Determine a Customer’s Worth with the CAC

Businesses should never analyze their customer acquisition cost on its own. Instead, they must examine it in relation to another critical metric: customer lifetime value (CLV). This indicates the revenue that a customer will generate throughout their entire relationship with a company.

It’s important to weigh the CAC against the customer lifetime value, given that not all acquired customers bring the same value to a company.

The CLV divulges two key aspects of a customer’s value: their revenue value, along with their anticipated lifespan doing business with a company. Thus, the longer a customer purchases products and services from a business, the greater their CLV becomes.

The CLV allows businesses to discover the most significant customer segments in their target market. This is because even a small portion of these kinds of customers add the greatest value to the revenue.

The CAC depends on a decent CLV. This is because the CLV shows whether a business is sustaining an ROI or losing money. For example, if the CLV of your customers is $300 and it costs roughly $900 to acquire them, that means your business is losing money, with a net loss of $600.

For example, if the CLV of your average customer is only $500 and it costs close to $1,000 to acquire them (advertising, marketing, special offers, labor), then could severely be losing money if you’re not able to pare back your acquisition costs and/or increase CLV through other products and services.

It can be difficult to calculate the CLV for a fledgling business, as it does not have a large amount of historical data. However, it is vital to monitor this metric and compare it with the customer acquisition cost.

Businesses can calculate their CLV on a 1, 3 or 5-year basis. If a company is relatively new, it can compute its CLV via subscription renewal rates (in a subscription model) or repurchase rates.

The most important kind of business acumen that examining the CAC against the CLV brings is whether the customers that businesses acquire yield more revenue than they cost.

Customer Lifetime Value to Customer Acquisition Cost Ratio

When a business compares its CAC with its CLV, it must do so via the customer lifetime value to customer acquisition cost ratio, or CLV: CAC, also expressed as LTV: CAC. This ratio reveals a customer’s value, relative to how much it costs to earn the customer.

It helps businesses adjust various expenditures, such as marketing, sales, advertising, UX and more. Additionally, it illustrates whether a business is slated for sustainable growth and can stay ahead of its competition..

A suitable CLV: CAC is 3:1, as it shows the value of customers is three times as much as its costs to acquire them. When this ratio nears 1:1, it indicates that a business is spending the same amount of money to obtain customers as the customers are spending on a business.

A business with a higher ratio, such as 6:1, signifies that a business is not spending as much as it should on sales, marketing and other means of customer acquisition. This can mean that it is losing opportunities to gain more customers.

For example, if a company has a CLV of $4,000 and a CAC of $1,000, the CLV:CAC = 4,000:1,000 or 4:1.

How Surveys Help Lower the CAC

Surveys can help reduce the customer acquisition cost in a number of ways. This is because surveys can get to the heart of who your customers are, thereby allowing your business to better serve them.

Surveys also allow you to better understand your customers in relation to your overall industry. In this way, businesses can then tweak their offerings, experiences and services to your customer’s liking. They also help you avoid the things that repel them, whether it is a specific topic, messaging or price point.

The following enumerates the other key ways the surveys reduce the cost of customer acquisition.

They help glean a clear understanding of your customer segments via market segmentation. Without understanding the makeup of your target market, you won’t be able to serve your customers or market to them.
They allow businesses to implement proven marketing/advertising methods via experimental research.
They track brand awareness and brand equity, as these aspects contribute to customer acquisition.
They optimize advertising campaigns, so that customers will gravitate towards a business, thereby lowering costs.
Surveys help you augment your content marketing strategy to draw in customers across the digital space and increase your site traffic.
They remove any hesitation or guesswork around any marketing campaign or business campaign at large.
They foster customer development to ensure a product is needed prior to launching.
They prevent businesses from spending on wasted efforts or unsatisfactory methods of drawing in new buyers.
For those with lower budgets, they help businesses settle on one marketing effort over another, rather than spending money on both.
They gauge the customer satisfaction of existing customers, so that businesses understand how to better reach and serve new customers.

Rounding off Any Acquisition Campaign

As the above section expounds upon, surveys help lower the CAC in several ways, in turn allowing a business to save money on acquisition. However, there is far more to a survey campaign than the surveys themselves.

In order to round off any customer acquisition campaign or market research campaign at large, businesses need the power of a potent online survey platform. Such a platform provides all the necessary software to run a quick and efficient survey campaign.

There are various capabilities that businesses must look for in an online survey tool, such as artificial intelligence and machine learning to ensure relentless quality, an automated checking system that disqualifies low-quality answers, survey fraud and survey bias, along with one that offers mobile-first quality in mobile experiences.

A survey platform that offers all of these functionalities and more will set up a business to lower its CAC and excel at all marketing and research efforts.

by lorraine

Increasing the Customer Retention Rate with Surveys

The customer retention rate (CRR) is a crucial metric for virtually all industries. As its name suggests, it measures the percentage of customers that a business has retained over a given period of time.

This rate essentially spells out how successful companies are at satisfying and keeping their existing customers. It is therefore a measure of customer loyalty, helping businesses better understand why customers stay with a company.

In turn, businesses can improve their offerings and experiences to increase their customer retention. Retention is a key business concept to uphold, as increasing customer retention by just 5% can increase company revenue by 25-95%.

This article explains the customer retention rate, how to calculate it, its importance, the CRR across industries, and how surveys help increase it.

Understanding the Customer Retention Rate

Customer retention rate (CRR) is a metric that measures a company’s ability to retain its customers over time. A percentage-based metric, it measures how many customers a business retains at the end of a given time period.

For example, if a business has 100 customers at the beginning of the year and has 70 at the end of the year, its retention rate is 70%. (See the section on its calculator for the breakdown of its formula).

This rate is the opposite of churn rate, which gauges the percentage of customers that a business loses over a period of time.

The importance of the customer retention rate will vary based on its industry. For example, businesses that provide subscription-based services (from B2B SaaS to B2C magazine subscriptions) depend on higher customer retention, as it directly affects the profitability of the business.

However, a high customer retention rate is still crucial for all sorts of businesses, as existing customers are 31% more likely to spend more on their average order than new customers. Additionally, retained customers are 51% more likely to try a business’s new offerings.

Thus, maintaining a high customer retention rate should be a top business priority. This involves going beyond measuring the rate alone, but establishing customer satisfaction.

The Importance of the Customer Retention Rate

This metric is important to calculate, keep track of and most importantly, use to raise customer retention. It provides a simple data point for determining how many customers a business retains over time.

It also carries considerable weight in other business matters.

Firstly, studying this rate is important given that it is a major KPI, but unlike many KPIs, this metric relays one of the most sought-after aspects for a business, that of customer retention, as its name implies.

Customer retention, as explained above with statistical figures, offers a wealth of benefits. These include those of relationship-building with customers, forging loyalty and gaining more profits.

Another such benefit is the affordability factor. Given that customer retention is far more valuable for a business than acquisition, one would think it is more expensive to achieve. However, it is anywhere from five to 25 times cheaper to retain an existing customer than it is to acquire a new one. Thus, it is financially more practical and viable to implement customer retention methods.

In order to form such methods, a business must know its standing when it comes to its customer retention, and that is the exact data point that this rate provides.

Additionally, studying this rate, businesses can increase customer lifetime value (CLV), which relays the total monetary value a customer brings to a business throughout the entirety of their relationship with the business. This helps businesses understand which customers and customer segments are the most useful for their business.

By studying your customer retention rate, businesses can improve their ROI and grow revenue, as retaining customers, as laid out in the above figures, is healthy and profitable for businesses. When customers trust a business with their patronage, they provide value, be it with regular purchases or online interactions, such as with social media posts and contributing their own positive reviews.

How to Calculate the Customer Retention Rate

There are several formulas to calculate customer retention rate or CRR, but businesses only need to choose one to narrow down their retention rate. One of the most commonly used formulas uses the following variables and equations:

CRR Variables:

EC - number of customers at the end of a given period
NC - number of new customers during that period
SC - number of customers at the start of that period

Customer Retention Rate Formula

CRR = ((EC-NC)/SC) x 100,

CRR Formula Example:

Let's assume that a business released a new product. At the beginning of Q1, it had 1,200 customers and at the end of Q1, it had 1,400 customers, having acquired 300 new customers within Q1. The CRR is thus calculated as:

CRR= ((1,400- 300) / 1,200)) x 100

CRR= ((1,100) / 1,200)) x 100

CRR= 0.91666 x 100

CRR= 91.67%

Although this is a strong CRR, businesses should remember that it also signifies a percentage of customers lost (normal in business). In this case, the business lost close to 100 customers.

The Customer Retention Rate Across Industries

The average customer retention rate varies across industries. As such, there is no hard and fast rule designating a good or bad rate.

A 100% retention rate is a patently good rate, as it is the highest possible one. Meanwhile, a rate closer to 0%, such as 20%, can objectively be determined as poor. Percentages that run in between these numbers will have different attitudes towards acceptability across industries.

What may work for one industry or niche may be deemed poor for another, and vice versa.

The following provides a rundown of the average customer retention rate across industries:

Retail: 63%
Telecom: 75%
Banking: 78%
IT Services: 81%
Insurance: 83%
Professional services: 84%
Media: 84%

How Surveys Can Increase Customer Retention Rate

Surveys, especially the online variety, provide a quick and practical means of conducting primary research. While market research techniques include a host of other primary and secondary research techniques, surveys are by every measure, the most proper tools for not simply conducting market research, but to be used as vehicles for increasing the CRR.

Although conducting secondary research is a useful practice, secondary sources do not address specific topics, issues and least of all, inquiries that businesses have about their subjects. Therefore, conducting secondary research alone is insufficient for market research, let alone increasing the CRR.

Companies must incorporate primary research into their market research campaigns, as this method allows businesses to scope out their particular topics and most importantly, their own target market.

To reiterate, survey research is the solution for virtually any market research campaign. Surveys open up the minds of customers’ to market researchers and their respective businesses.

As such, when survey research is carefully conducted and on a potent online survey platform, researchers gain a wealth of customer insights, the kinds that help brands improve their customer experience and overall standing in the eyes of their customers.

When businesses understand their customers on an in-depth level, they can thereby market to and serve them more effectively. Customers appreciate when brands understand their unique grievances and needs, along with the marketing personalization efforts used to better cater to them.

When businesses develop strong relationships with their customers, they build and reinforce customer loyalty, a major component of customer retention. But businesses can only build these kinds of relationships when they understand their customers on a deeper level.

Surveys provide a feasible solution for reaching these kinds of customer insights, allowing businesses to better understand and serve their customers, therefore raising the customer retention rate.

Making Strides in Retaining Customers

A high customer retention rate is an integral ingredient for business success. Businesses must prioritize their CRR over customer acquisition, as customer retention is more beneficial and practical for businesses.

Survey research, as explained above, helps increase the customer retention rate; however, not all surveys are viable for this pursuit. Businesses must choose their online survey platform wisely, in order to ensure they are extracting optimal data and using an agile platform.

A strong online survey platform uses the random device engagement sampling method (RDE) to ensure randomization and obtain respondents in their natural digital environments, along with AI and machine learning for data quality checks, a vast system of survey employment and more. The Pollfish platform offers all of these abilities and far more.

by lorraine

Diving Into the Net Profit Loss and How Market Research Helps Avoid It

It is in the best interest of businesses that seek to stay afloat to circumvent the net profit loss. An accounting term, net profit loss is a critical issue that businesses and market researchers must pay close attention to and endeavor against.

This term relates to profits, namely the lack of profits, when business expenses surpass revenue. As such, it represents a negative value for a company’s income. This value is recorded in the net income portion situated at the bottom of a business’s income statement, also called the profit and loss report.

Given the unpredictability of markets and events, take the COVID-19 crisis for instance, all businesses should be wary that they too may incur a net loss at any given time.

While there are mechanisms that help companies stay in business in spite of sustaining a net loss, they will not help a company survive in the long-term, as net profit loss is one of the main drivers of business failure.

This market research guide expounds on the net profit loss, including its causes and solutions, how to calculate it and more, along with how survey research can help businesses avoid it.

Understanding Net Profit Loss

This concept has several names, such as net loss and net operating loss, all of which refer to the negative value in income, which occurs when business expenses exceed the total income or total revenue during a specific period of time.

Thus, net loss refers to the negative consequence of businesses losing money, given that expenses do not merely carry the same costs as the total revenue, but exceed it.

Net loss is the opposite of net income, which refers to the case of income or revenue exceeding expenses, therefore producing a profit. Net income is also referred to as a net gain.

Business owners can check whether they have induced a net loss in their company’s income statement, which is also referred to as a Profit and Loss (P&L) Report. The net loss or net income appears at the bottom of this report, which is how business earnings gained their moniker of the bottom line.

This net loss issue is one of the chief risks that both startups and long-established businesses face. When left unaddressed and neglected, this problem can cause a company to permanently go out of business. This is because the lack of profits causes major financial damage that leads to bankruptcy.

Businesses can prevent going bankrupt should they take loans or use their retained earnings. However, these strategies are merely short-term safety nets; they cannot sustain a business in the long-term.

Therefore, this concern should not be solely left up to accountants to view and report, as all businesses must strive to steer clear of net profit loss.

The Causes and Solutions of Net Profit Loss

There are several contributing factors of net operating loss. Therefore, a business should examine all of these factors in relation to itself to determine which cause contributes the biggest dent to profit.

First off, low revenues are the greatest cause of net profit loss, which themselves include several factors. Low revenues can be the end result of an economic recession. For example, the COVID-19 pandemic caused major economic devastation in the US, in which 50% of people aged 25 to 44 lost their jobs, thus losing their spending power.

Other causes of low revenues include a strong competitive presence, poorly performing marketing initiatives, insufficient sales processes, low product demand, prices that don’t match the target market’s spending power and many other considerations.

Rising expenses are another cause and these can include anything required to maintain the business, from business headquarter costs, to marketing, to customer acquisition cost (CAC), to SaaS and marketing investments, to the cost of goods sold (COGS). COGS include all the costs required to produce the goods that companies sell and bring them to market.

Net loss also comes into being when a business’s products are low on demand. This can occur when products become obsolete or when a competitor offers either a more advanced version or a better quality or of the products. Thus, when product performance is insufficient, the demand for it drops, along with its sales.

Another cause of profit losses is that of poor management execution, which can occur in a number of disciplines, such as product, marketing, sales, customer support and others. For example, the product team may undergo delays. Or the marketing team may have run a poor campaign, one that draws little attention and leads.

A lack of brand tracking can additionally cause negative income statements since they can take a toll on a brand’s reputation. Companies that receive bad press, negative reviews or social media comments can sway the minds of even the most loyal of customers. This also ties into the idea of low product demand, as businesses who tout their products with heavy PR pushes can form a better public opinion of their products, thus pushing a business’s customers towards their competitors.

Finally, there is the receiving end of all marketing, sales and product efforts: the customers. Businesses can endure net loss when they do not have enough customers. This is typically a concern for new businesses along with those with scant brand equity. Brands with familiar names tend to reel greater customer loyalty and trust. However, even long-established brands can lose customers from a variety of factors, such as brand crisis, stiff competition or when businesses do not study their customers.

Businesses can avoid net profit loss in a number of practical ways. The following list enumerates several useful solutions to eliminate incurring profit losses.

Businesses ought to create a fleshed-out budget and check it regularly in order to assure that all items continue to fulfill the budget.
1. Businesses should remove expenses that no longer fit the budget such as martech and all other expenses, including business real estate costs.
Marketers should execute quarterly campaigns set to increase sales, along with the sales team, which requires open communication and continuous collaborations.
Brands should make reducing expenses one of their priorities. For example, rather than opening a new position, they should consider hiring a freelancer instead.
Businesses should use the professional advice of accountants and advisors to ensure all operations can run smoothly without overspending the budget.
Cutting down on store inventory and excess expenses is crucial. Businesses must first analyze their sales figures relative to their inventory. If there is a low demand for certain products, businesses should reduce manufacturing on them, as this will cut costs.
1. Excess expenses also include administrative costs, office materials, labor costs and more.

How to Calculate Net Profit Loss

Calculating this metric is relatively simple. Its formula involves the same mathematical action as does the net income formula.

The formula for calculating net loss is to simply subtract all business expenses from the total revenue in a given period of time. This period can be quarterly, annual or centered on a specific campaign.

The following guide explains this formula in a step-by-step fashion:

Calculate the total revenue your business generates from the resources it uses and their corresponding expenses.
1. Net income and net loss are on the bottom line, while revenue is the top line in a P&L report or income statement.
Layout all of your expenses in a particular time period. Add them all together.
Finally, plug your values into the formula: (total revenue during X period) — (total expenses) = Net Profit Loss

Understanding a Profit and Loss Report

The profit and loss (P&L) report alludes to a report with a summary of all the income and expenses that a business retains and carries during a specific period of time. Also called the income statement, it lays out business losses relative to revenue.

This income statement can be formed on a weekly, monthly, quarterly or annual basis, depending on business procedure and formalities.

In this document, businesses are able to see whether they generated a net income, also called a net gain, or a net loss. It also shows a breakdown of all expenses, sales and revenue figures, so that businesses can see all the financial activity that they undergo.

A detailed ledger, the P&L report shows the ability of a business to manage its profits by reducing costs and driving revenue. It also allows businesses to examine cash flow, expense trends and general profitability so that they can informatively set up and tinker budgets, as well as allocate funds.

Examples of Net Profit Loss

The following provides several scenarios in which a business undergoes a profit loss.

Example 1

A business with an annual income of $100,000 incurs $120,000 in expenses related to running the business. This company has incurred a net loss of $20,000 for this year.

Example 2

A business acquires its competitor for $1 million. It generates a revenue of about $700,000 in this time period. It’s profit loss results in $300,000. However, it uses $300,000 in retained earnings to cancel out this loss.

Example 3

A local government overestimates the tax revenue by $150,000. In addition, it has road maintenance expenses that cost over $10,000 the funds it has due to snowy weather. Thus, its net loss is $160,000.

How Market Research Helps Avoid Net Profit Loss

Market research can help businesses avoid a net profit loss for any given period when conducted regularly and with the correct tools. There are various market research techniques, all of which provide key intelligence on a business’s overall niche, industry, competitors and target market.

Businesses can rely on both secondary and primary sources to have a better understanding of the trends within their niche, the demands of their industry and customers, their own standing and reputation and much more. This allows companies to create and execute well-informed business strategies and campaigns.

Most importantly, market research allows businesses to understand their customers, enabling them to better serve them. In this way, they can improve the reputation of their business, generate demand and increase revenue. This is because market research offers a vast pool of resources in order for businesses to acquaint themselves with their target market.

Survey research in particular offers the most potent form of market research, as it allows businesses to obtain their particular customer intelligence needs. Since it is a form of primary research, businesses gain the most updated information, whereas secondary sources may be months and even years old.

That is because even some of the most trusted sources of industry news and statistics recycle older information by merely updating a sentence on published articles, downloadable assets and resources. Sometimes, the only update they make to their sources is changing the date on old information to improve their natural ranking on search engines (a common SEO trick).

Additionally, secondary sources do not provide the unique insights brands need and specific inquiries they come across. They may also target segments of a target market that do not apply to a particular business.

Surveys, on the other hand, bypass both of these issues. They allow businesses to conduct campaigns suited precisely to their specific needs. Businesses can create a multitude of question types and ask questions on any topic of their choice. They can also target their specific target market segments if they use an online survey platform that allows for it.

Thus, surveys offer insights into all a business’s inquiries, allowing it to conduct valuable market research, understand the needs of its customers and avoid allocating funds on useless and inauspicious campaigns.

Reaching Profit Goals

The net profit loss is a somber reality for many businesses with insufficient customer intelligence. Market research is the antidote and surveys in particular can help businesses avoid profit losses by helping them focus on the needs, desires and aversions of customers.

This way, they can avoid unnecessary expenditures, save money and avoid overspending.

Survey research provides the most granular insights, as businesses can set their surveys up as they please. However, not all online survey platforms are equal in their functionality, capabilities, support and quality of data.

Thus, businesses ought to opt for a strong online survey platform, the kind that offers proven relentless quality, artificial intelligence and machine learning, a system that wards off low-quality answers and survey fraud, includes ease of use and deploys surveys across a wide network of publisher sites and apps via random device engagement.

The survey software that offers these functionalities and features will set up any survey campaign for success, bringing insights on a number of fronts, the kind that will effectively avoid the net profit loss.

by lorraine

Building Effective Marketing Personalization with Survey Research

Marketing personalization is a key ingredient in sustaining a business, as it improves businesses’ relations with their target market on several fronts. 96% of marketers say that personalization helps them advance customer relationships, while 88% said that it had a considerable lift in business results.

Customers themselves prefer personalization in marketing, as 36% of customers believe brands should provide more personalized marketing materials ; however, they are hesitant to share too much information. Thus, the onus is on brands to deliver personalization, but without making their customers feel uncomfortable when performing market research.

There are several ways that survey research solves this problem, so that brands don’t have to choose between the two alternatives of a personalized experience but with intrusive probing, or a non-personalized experience, but without intrusive prodding.

This article explores marketing personalization, its importance, types and how survey research helps businesses execute personalized marketing.

Understanding Marketing Personalization

Also referred to as personalized marketing and one-to-one marketing, marketing personalization is the practice of using data and technology to deliver individualized brand messaging, product offerings and customer experiences (CX) targeted to individual customers.

As its name suggests, this method is an alternative to generic messaging and even the kinds targeted towards particular target markets (albeit broad groups).

This kind of method is also oppositional to traditional marketing, which focuses on the quantity of messages over their relevance. In traditional marketing, brands would cast a wide net of marketing efforts, such as cold-calling, billboards, subways ads, emails and more, but earn a small number of buying customers.

Marketing personalization, on the other hand, is centered on creating personalized messaging relevant for specific people, the kind that doesn’t appear to be mass-produced. It is a means of interacting with customers that feels more human, as it involves their preferences, interests, likes and dislikes and other aspects.

A marketing personalization strategy can include the following examples:

Customized email marketing campaigns
Customized social media marketing
Personalized ads
Fear of missing out (FOMO) messaging
Targeted product recommendations
Tailored content
Personalized calls with representatives

The Importance of Marketing Personalization

Personalized marketing is critical for a number of reasons. Broadly speaking, it can help businesses optimize a wide number of marketing campaigns and make headway in ROI.

First off, personalized marketing grants businesses the ability to reach specific audiences. Collecting customer data allows businesses to better understand the makeup of their target market. Thus, performing personalization allows brands to perform market segmentation in the process, acquainting and acclimating businesses with their various customer segments.

This allows brands to build more effective email, content and other targeted marketing campaigns. For example, if your market segment likes certain music, brands can use music references in their email campaigns, blog posts, or their email opt-in forms for a more personalized experience.

Personalization also improves the customer experience. CX goes beyond hiring friendly customer agents to assist and engage customers. This is because CX involves all the experiences that customers undergo in their customer journey, from nurture content and emails, to social media interactions, browsing a website, making a purchase and revisiting a brand post-purchasing.

Given the importance of customer experience, businesses ought to personalize their content at any point in a customer journey. 80% of customers are more likely to buy from a brand that offers personalized experiences.

Personalization helps improve content marketing strategy, which is especially important given that content steers many decisions, thoughts and associations with a company. Personalized content marketing makes businesses stand out from the crowd by creating unique and relevant content.

In turn, this creates positive associations with a brand and increases the chances of prospective and current customers returning to a website. This allows businesses to further nurture them, as well as to be continually etched in their minds.

Personalization is also a means for relationship-building, as it creates more personal and stronger relationships with consumers. As such, businesses can show their customers that they care about them, with personalized marketing such as birthday wishes, discounts on birthdays, a personalized rewards system, thank you emails and more.

As a result, personalization boosts customer loyalty, a critical concept for maintaining a successful business, as loyal customers buy frequently, make recommendations about a brand, act as brand advocates, are more willing to try a brand’s new products, along with contributing in other ways.

Given that personalization involves studying customer buying behavior in order to send individualized messaging, it allows marketers to make better product recommendations. Making recommendations is key to pushing conversions, given that they tend to be relevant to the customers' interests and past shopping activity. This is also a key tactic for cross-selling and upselling.

Finally, the most considerable benefit that marketing personalization offers is raising sales and conversions. When businesses grow their customer loyalty and retain consumers through personalized messages and offers, they will be more likely to buy. This idea piggybacks off of the aforesaid figure of 80% of customers being more likely to buy from a brand with personalization. Thus, businesses can count on this tactic to increase their revenue.

The Aspects of Marketing Personalization

There are a number of ways that brands can forge marketing personalization. While the means are plentiful if not virtually limitless, there are certain aspects that form the basis of personalized marketing. Businesses should include these components in their personalization efforts, whenever they are in doubt.

The following lists the key elements of personalization in marketing:

Hyper-targeted content
1. Content that calls out a particular segment, persona and individual customer
2. It involves understanding customers beyond their gender, ethnicity and age.
Specified content
1. This content addresses specific needs, desires, behaviors, habits and more.
2. It involves prospect-specific news feeds, topics, and content resources/ collections.
Responsive design
1. A kind of dynamic content, which omits setting up individual campaigns, and trying to route customers into the most fitting one, you create a single campaign, (1 email, 1 landing page, etc.) which are presented differently based on the target on the receiving end.
2. This brings out the convenience side of personalization, as it is customized for a particular customer. In turn, it will make the customer feel that the company took the time to know him.
Forging a sense of customer identity.
1. Personalized messaging gives customers a sense of identity rather than being treated as another part of the masses. Instead, they are made to feel like unique individuals.
2. This solves the grievances of mass marketing, given how often customers are flooded by it, whereas a personalized message treats customers as not just another member of a herd. Thus, the messaging will be more credible.

How Survey Research Fosters Marketing Personalization

Survey research is an invaluable component of the personalization process. Before creating any personalized marketing campaigns, let alone reaping their benefits, brands must understand their customers as close to an individual basis as possible.

After all, it’s impossible to engage in personalization when you do not know how to personalize. Every market segment iis different, not least every individual customer. What works for one segment or customer, will be ill-fitting for another.

Thus, brands need to establish a firm grasp of their customers’ identities, thereby extracting customer data on who the customers are, what makes them unique and how a business is fitted to cater to their individual needs and remedy their unique pain points.

Surveys obtain the insights into all of these concerns and more. They allow brands to collect better data for decision-making and gain quick access to a wealth of customer feedback. This feedback is useful for gauging existing marketing campaigns, along with setting up new ones based on the intel brands gain on their target market.

Surveys help brands learn the ins and outs of customer behavior, along with gaining valuable insight into the unique characteristics, habits and thoughts of their customers. Therefore, businesses and market researchers should use surveys as the primary means for personalization campaigns and understanding their customers at large.

Taking Personalized Efforts to the Next Level

Customer data is the most valuable thing that businesses can leverage in order to build the most effective personalized campaigns. To do so, they need access to a breadth of customer data; while this may appear to be a feat, survey research makes it easy and practical.

However, not all online survey platforms are built the same. Businesses must bear that in mind and choose their online survey tools wisely. A strong online survey platform allows brands to hyper-target their respondents, set up a number of surveys, deploy the surveys on a large network and ensure the respondents are chosen via randomization — something that random device engagement sampling (RDE) makes possible.

The Pollfish platform offers all of these capabilities and more to ensure that market researchers are obtaining the highest quality of data for their personalized marketing campaigns, along with all others.

by lorraine

How to Identify and Build Customer Personas with Market Research

It is critical for businesses to be able to identify and cater to their customer personas, as these entities are not the same across businesses, regardless if the businesses share the same industry or niche.

Customer personas place a business’s customers into specific, collective archetypes, the kinds that help avoid targeting the wrong people in marketing campaigns. But customer personas can help b businesses achieve much more than identifying and targeting the correct consumers.

As a matter of fact, 93% of businesses that exceed lead and revenue goals segment their target market by customer personas. 56% of companies developed higher quality leads by using personas.

This market research guide explores the notions behind customer personas, their importance and how market research — particularly surveys — help businesses identify and construct their consumer personas.

Understanding Customer Personas

Also called buyer personas, marketing personas and audience personas, customer personas are a form of customer segmentation, but a far more granular subset, as they represent individual people.

A customer persona is a detailed description of a member in a business’s target market, i..e, the group of people most likely to buy from them. This persona is not a real customer, but a fictional character who possesses all the traits of a target market segment.

Building these personas is the more concentrated practice of market segmentation — the process of categorizing a target market into smaller, more defined customer segments. However, customer personas are not the same as customer segments.

Customer segmentation refers to dividing a target market into different sets of customers. These sets inform on a group’s demographics, geographical location and some aspects of their customer buying behavior. Segments help businesses understand the makeup of their target market as different sets of groups.

On the contrary, a customer persona refers to defining individual customers within the segments discovered during customer segmentation. Customers are assigned fictional characters that represent a typical customer in a market segment; they are assigned a granular depiction, one that includes various specifications for each persona.

After establishing a few customer personas, a business can then categorize its leads, prospects and customers into particular customer personas. This is especially useful for businesses with hundreds or thousands of clients and prospects.

The Key Aspects of Customer Personas

A buyer persona is formed as a profile of a customer, therefore including demographic and psychographic traits, along with other detailed characteristics. This includes their values, behaviors, goals and other defined categories.

The following enumerates the key factors of customer personas so that businesses can understand them thoroughly and easily form their own:

Demographic details
1. This includes age, gender, income, marital status, location, race, ethnicity, number of children (if any), etc.
Customer behavior
1. This includes all the actions and behavioral patterns of how customers shop, consume and discard products.
Pain Points & Objections
1. Paint points involve the challenges that customers typically face, how they feel about them and how a business can help them overcome or bypass these challenges.
2. Objections include frequent dislikes and concerns in regards to a business, its products, services and experiences.
Workstyle
1. This involves their industry, position, salary, area of responsibility, decision-making authority.
Lifestyle
1. This concerns what customers and leads do in their spare time, what they enjoy doing, their hobbies. whether they own a vehicle, etc.
Personality
1. This is a snapshot that includes determining whether customers are competitive, emotional, logical, outgoing, people-oriented, how quickly they make decisions, etc.
Goals
1. This explains what they hope to do or achieve. Are they more career-focused and want to impress their boss and colleagues? Are they interested in saving money or time?
2. It also addresses what would make them purchase from a business in relation to their goals.
Information Consumption
1. This regards how customers prefer to receive and consume information, such as doing internet searches, scrolling on social media, talking with people, reading newspapers, watching various broadcasts, listening to podcasts, reading magazines, etc.
Designated Marketing Message
1. Composed of a few sentences, it outlines how a business helps their customer personas relieve themselves of their pain points and meet their needs.
Identity
1. This includes a name and a stock photo to humanize and visualize the persona, since it is meant to represent a real person.

The Importance of Identifying Customer Personas

Buyer personas are important for businesses on a number of different fronts. All of these bring different kinds of value across departments.

First off, these personas give businesses a comprehensive view of hypothetical customers, one that is far more concentrated and precise than a market segment. Their key factors such as their goals, motivations and lifestyles helps businesses form better targeted marketing campaigns and messaging.

In fact, 90% of companies that use customer personas were able to create a clearer understanding of their target market. In addition, 24% of companies gained more leads by identifying their personas.

These entities help guide numerous business strategies, such as brand voice, product development (such as in customer development, for example), social media campaigns, advertisements and more.

Given that marketing personas form the basis and style of a number of business activities, they align various departments, such as marketing, sales, product development and customer support, by giving them a concrete profile on ideal customers. This way, these departments can strategize to satisfy these personas accordingly.

Identifying personas can make a business more competitive and avoid product pitfalls. This is because persona-building involves establishing and addressing customer pain points and objections. These factors help businesses understand what’s bothering customers, what they dislike about current products in their niche and mainly, what would make them leave a competitor and switch to their brand.

Thus, product developers can refer to personas when forming product roadmaps, as they help them discover and prioritize changes to product offerings based on customer needs.

Marketers can identify and prioritize promotional activities to use in digital ads, remarketing and retargeting efforts with buyer personas. Content marketers also benefit from personas, as they help guide thor copy and build a content strategy relevant to customers.

These personas are useful for sales teams as well, given that they allow sales employees to understand the needs and pain points of their prospects, enabling them to be more prepared and better versed in dealing with prospects' concerns.

All in all, customer personas help a business understand its customers at deeper levels, in turn allowing them to better empathize and serve them, while improving their own processes with better alignment across departments.

How Market Research Helps Build Customer Personas

Firstly, market research helps build these profiles with the critical preliminary process of market segmentation. The importance of market research also extends to building specific personas themselves.

First off, there are various market research techniques that businesses can incorporate to learn more about their target market. Secondary resources are often used in the early stages of learning about a particular target market. While secondary research helps form the bedrock and key insights on customer needs and behaviors, it cannot address specific concerns that businesses have, let alone form personas that are unique to a business.

Therefore, a business must always conduct primary market research. There are many means of conducting firsthand market research; surveys provide the most simple yet potent method to collect such research.

This is because surveys allow businesses to study the exact people who fall under specific demographics, geographies and even behavioral traits, should the online survey platform allow it. In this way, market researchers can learn about their desired populations only, further segmenting them and using their data to identify and build personas.

Surveys provide an easy method of gaining a wide swath of insights and can be based on any campaign or sub-campaign. When it comes to forming buyer personas, they allow market researchers to gather information on all the factors that make up a bury persona.

Nobody likes taking long surveys, as such, researchers can design surveys on different factors of the personas in their process. They can also create follow-up questions on a particular topic to unlock deeper insights.

Surveys allow market researchers to quickly draw responses and even provide a completion time, depending on the online survey platform. They also grant researchers different data viewing and exporting options in order to analyze their data to their preferred method.

Surveys can uncover key trends and patterns crucial to the makeup of a customer persona. They also allow businesses to gain access to thousands of respondents.

The following presents just some of the insights that surveys can effectively provide:

The backgrounds of customers, including their lifestyle, workstyle and demographics
The challenges and hurdles they deal with
Their interests and hobbies
What they seek in a product or service
What they dislike or try to avoid
Their goals and needs and how a business can help attain them for customers
How a business’s solution alleviates their challenges

How to Create Surveys that Identify and Build Customer Personas

Creating surveys for the purpose of developing customer personas can be difficult, even for those with some familiarity of market segmentation and building personas.

The correct online survey platform should relieve this process with functionalities that allow researchers to screen respondents, create questionnaires and deploy surveys.

The following lists the necessary steps to create surveys to identify and build customer personas:

Determine the main purpose and needs of the survey campaign.
1. Decide on the main needs of your campaign.
2. Pinpoint the unknowns of your buyer personas. Do you need to understand them better, or do you need to create new ones entirely?
3. Does your business seek to form a more personal connection with its customers? Or do you need to understand their problems more clearly, to ideate solutions?
Assign your survey to specific target populations.
1. First consider who you need to take part in your survey: existing customers, website visitors, your general target market or a specific segment from it?
2. Finding who you need to involve in survey research can also help narrow down the purpose of the campaign in Step 1.
Narrow down the premise and setup of your survey.
1. Although similar to Step 1, this step involves taking the purpose of your survey and using it to settle on a persona subtopic, or several, such as customer goals, objections, pain points and buying behaviors.
2. If you have some of this information on your personas, consider whether you need to explore new topics to build the persona further or gain more information on existing aspects.
Form the questionnaire.
1. Begin with general questions and make them more specific.
2. Consider using advanced skip logic to route respondents to a relevant follow-up question to the previous question.
3. Use a variety of question types to make the survey more engaging and avoid survey fatigue.
4. Some questions will need more specific answers, so consider using both multiple-choice, multiple-selection and open-ended questions.
Send out the survey to its intended respondents.
1. Don’t forget to include a thank you section to the survey, along with an intro that briefly explains its purpose and the importance of the respondent’s participation.
2. Assure that the platform you use allows for randomization and the random device engagement (RDE) method.
Analyze your survey results.
1. Organize them into a document that lays out patterns and common findings.
2. Filter the findings into a customer persona profile or profiles, if you suspect the presence of more than one, or traits that apply to partly established personas.
Put together your marketing personas based on your survey research.
1. You can use the data you reaped from your survey campaign into existing personas or create new ones. Additionally, you can add another aspect to an existing persona if you haven’t already. For example, their buying behavior, if you haven’t formed this aspect in previous persona-building studies.
2. Consider if you have enough information on each persona. If you need considerably more, run another survey and ask questions specific to the missing gaps on your persona(s).

Creating the Most Effective Marketing Campaigns

Mapping out a plan for effective marketing campaigns requires knowledge about your customer base. In order to form successful marketing and sales campaigns, businesses must be attuned to their customers to make informed decisions.

Customer personas allow businesses to do just that, as well as align all team members on all their customer-facing efforts, from the support team to the product team. With these personas, businesses can even designate an upcoming campaign or sub-campaign to particular personas. This way, they can jumpstart a campaign with targeting already set.

Survey research provides businesses with ample data and insights, depending on how they set up their questionnaire and how often they deploy surveys. Surveys are also strong tools to use for forming customer personas, allowing market researchers to gain a deep read of their customers on multiple factors.

Aside from asking relevant questions, using the correct online survey platform is vital for building buyer personas. Such a platform should offer advanced skip logic to direct respondents to relevant questions, allow for a multitude of questions and pre-selected answer ranges, deploy surveys to a vast network of users in their natural digital environments by using the random device engagement sampling method and be easy to use.

When researchers are equipped with a strong online survey platform, they can take their customer persona-building campaigns to new heights.

by lorraine

Syndicated Research Vs Custom Research: Which is Most Ideal for Businesses?

When tackling market research, businesses have the option of using syndicated research, custom research and a slew of other kinds of research providers.

When it comes to steering your business forward, market research techniques provide a vast array of insights into your target market and industry at large. While secondary sources can provide critical information, it is even more important to conduct primary research, which grants unique and updated data that informs your business on a variety of matters.

Thus, researchers are often presented with using either survey panels, syndicated research or custom research as the foremost methods of conducting market research.

This article lays out the key aspects of syndicated research and custom research, along with their differences, so that businesses can informatively choose their best-suited market research method.

Understanding Syndicated Research

Syndicated research refers to the kind of research that is conducted independently, published and sold by a market research firm. This kind of firm is usually industry-specific and is therefore funded by several companies within a particular industry.

Thus, the market research firm and its partner companies own the data that the firm conducts. Other companies within its particular industry may be interested in obtaining the data and can thus patronize the firm.

The firm publishes the data to those who intend to purchase it — other companies within the space, as aforementioned. The data becomes available in the form of presentations, reports and times, as a raw collection of data.

Unlike custom research, syndicated research involves the market research firm and its collaborating companies — those that jointly funded a research project — as the sole owners of the data. This means that companies that purchase the data via syndicated research do not own the data.

In this form of research, the market research firm dictates the subject of the study, along with its direction. The patronizing companies can request additional questions to be added to the firm’s interview, or to have the study extended in some way or another, whether it involves adding a more diverse survey sample or more participants.

Thus, despite the firm’s ownership of a market research project, its purchasing customers have the option to customize it and change it to suit their research needs.

The Key Aspects of Syndicated Research

Syndicated research is characterized by several traits that define and distinguish it from custom research. The following lists several major aspects that form the basis and composition of syndicated research.

The market research firm conducts the data and is funded in collaboration with other companies that also own the data.
The scope, direction and methodology of the research is determined almost entirely by the research firm (although purchasing companies can make requests).
It allows companies to gain access to general data on the state of a specific market.
The costs of syndicated research are shared.
The results provided are the same, so there is no exclusivity among any of the parties involved.
Since purchasing companies do not conduct the research, syndicated research is considered secondary for customers.
1. However, it is primary research for the firm conducting the research.
It often uses large sample sizes and exits as quantitative research.
It is often conducted within exploratory research, given that is used as an early form of research.
A syndicated research firm can specialize in research in one industry or cover multiple industries.
It is not funded or created for one specific client.
It allows businesses and researchers to discover information about a market before taking on a full-scale market research campaign.

The Advantages and Disadvantages of Syndicated Research

Syndicated research offers its share of benefits to researchers and businesses alike. However, it does not come without several drawbacks. When deciding between syndicated and custom research, businesses ought to review the following.

The Pros

Cost-effective, timely and cheaper than ad-hoc research.
It provides a primer into market research within an industry, given that the information is general and not particular to a niche or company.
It helps companies identify key trends and the main issues surrounding their industry.
It uses large sample sizes, which is fruitful for forming predictions.
It offers competitive intelligence within an industry.
It assists companies with brand awareness and brand tracking should they make this request to broaden their data.
Ideal to use for a research thesis, or need to create an investor pitch from various data providers on short notice.
It can improve the visibility of a company by using syndicated research for amplifying publicity.

The Cons

The market research firm wields almost complete control over the study, its methodology and direction.
The acquitted data is too broad and doesn’t address the specific needs that vary from company to company.
The data can be available for purchase by competitors.
Investing companies cannot claim full ownership of the research, given that other companies fund it and the research firm is at the helm.
Although it is an ideal starting point in market research, it does not cover the many unique aspects individual businesses will need, especially when brand tracking is concerned.
The data does not provide granular insights for research beyond exploratory.

Understanding Custom Research

Custom research is a kind of research that is conducted for and funded by one company — the client, who owns the resulting data. Market research companies run the campaigns and provide the data, made custom for the client.

In custom market research, the company, namely the client that procures the data has control over the campaign, thereby controlling the participants of the survey, the questionnaire, the quotas and virtually all else. In this regard, custom research fulfills its name, as it is customizable according to the client’s needs.

Custom research ensures that the client company dictates the requirements of a research campaign, sets the participant qualifications and meets all of its specific needs. When a company seeks information that closely aligns with its unique business aspects, it is ideal for it to turn to custom research.

Thus, custom research is better suited for handling research beyond the early stages, such as exploratory and explanatory research. It is also more fitting for obtaining a more in-depth analysis of a target market since the client company can format a survey campaign to its liking to fit its precise needs.

Both client companies and individual researchers are not obliged to share their insights with any other entity, nor do they have to publish their insights, although the latter is used for thought leadership, therefore making custom research ideal for content marketing strategy.

As for the former, the insights brands derive from custom research are completely unique to them and no other company can claim them as theirs, as the client company owns the data.

The Key Aspects of Custom Research

Custom research features several aspects that differentiate it from syndicated research and shape its experience. The following lays out various major components that form the offerings of custom research.

It is produced specifically for one company, rather than being a joint effort by multiple companies.
Although a market research firm provides the means of conducting the research, the client company owns the extracted data.
Custom research is suitable when a company requires more precise data about something specific to its business.
It is conducted after the early stage of the research process, for example, during descriptive, correlational and experimental research.
Custom research can provide clients with industry benchmarking, trade dynamics, segmentation analysis, economic impact and more insights.
It allows clients to take control of the direction of the research campaign.
Market research firms either conduct the research themselves or provide a tool for the clients, who then conduct the research themselves.
1. For example, an online survey platform.
It incorporates a client-centered approach, thus the insights are particular to the client and their customer intelligence needs.
This kind of research allows companies to customize any aspect of the research, from qualified respondents, to the number of respondents, to question-formatting.
The market research firm has no sway over a market research project as it would in a syndicated research project.
The client company is the sole proprietor of the data, but must also fund the research project on its own.

The Advantages and Disadvantages of Custom Research

Custom research has various advantageous qualities that complement a market research project. However, it also has a few downsides. Businesses and market researchers ought to understand both before embarking on a custom research project.

The Pros

It is ideal to use when a company requires in-depth information about a particular target market segment, or an issue unique to the company.
Businesses do not have to share the resulting data with similar companies, making them more equipped with insights than their competitors.
This allows companies to extract only the information they need, avoiding information overload and having to parse through unneeded information.
It provides hyper-targeted Information so that businesses can improve on a number of fronts.
Researchers ideate individual questions and use all the ones they find necessary for their business’s particular needs.
The data is much cleaner and easier to analyze when it concerns one business’s specific matters.
Businesses gain deeper insights rather than broad generalizations that can be applied to multiple companies, reinforcing the strength of qualitative and quantitative insights.
1. It offers an additional layer of insights that syndicated research cannot find.
Market research firms often provide different pricing plans for businesses, so that even those on a budget can implement custom research.
It can be used as an extension of a syndicated research project, or as the missing piece to other secondary research.
Custom research is tailored to a company’s specific needs, thus the insights are more applicable and actionable when a company seeks to make changes.

The Cons

This kind of research is the costlier option as it is funded by only one company with the research tailored specifically to the company; thus it bears the burden of paying a full price, one that is more expensive than it would be in syndicated research and other joint projects.
It takes more time and effort to conduct from a logistical and planning perspective.
It must be performed by a market research company, if not, it carries too many risks, such as survey biases and incomplete information.
Researchers are left to fend for themselves when it comes to ideating the project and its needs.

Which Research Method is Most Ideal for Your Company?

When choosing between syndicated research and custom research, a business must consider all of its market research needs: from the highest priority to the lowest. It must also consider the campaign for which it needs the research.

Critical inquiries to consider include: does your budget better fit with the syndicated research model or can you afford custom research? Are there already available insights on the subject you seek to study? If so, how much primary research does your study require?

When a business is at a critical point in its journey, one that requires immediate and actionable insights, custom research is the objectively better choice.

This is because unlike syndicated research, which provides general answers and those that pertain to various companies, custom research provides granular information as specific to a particular company as possible.

Thus, there are little to no questions or hesitations that follow custom research, as the researchers can design the questions and other key aspects of the research campaign to their exact liking. On the other hand, although syndicated research provides valuable data, it is not only too broad, but it can be lacking when it comes to the intelligence needs of a business.

Thus, businesses ought to choose a custom market research provider wisely. A strong online survey platform performs custom research with the prowess of artificial intelligence and a global presence of support.

by lorraine

How to Conduct and Perfect an RFM Analysis with Survey Research

An RFM analysis continues to remain relevant in the present day of big data and automation, despite being born in an age where direct mail was the most effective method of communication.

Although its origin traces back to 1995, the RFM analysis is still a valuable method for performing customer segmentation, building customer personas, improving marketing efficiency and executing other applications.

Thus, market researchers should develop an analysis on the RFM model, as part of their market research techniques and to understand the value of various customers.

This article explores the RFM analysis, its importance, scoring system and model, how to conduct it and how survey research completes the process.

Understanding the RFM Analysis

An acronym for recency, frequency and monetary value, RFM is a model for customer behavior segmentation. Also called RFM segmentation, this technique is used to analyze and estimate the value of a customer based on the three data points in its abbreviated title.

The idea underpinning this kind of analysis is to segment customers based on the three major factors that make up customer buying behavior.

This way, market researchers and business owners can identify which customers are regulars, big spenders and those who make one-time purchases. This kind of analysis allows businesses to distinguish between their different customers in this way, but on a larger scale.

The RFM analysis model assigns each customer numerical scores based on the three measures to provide an objective analysis of their value to a company.

The system uses a scoring system that allows businesses to identify 64 kinds of customers (more on that in a below section). The RFM system allows market researchers to segment customers by assigning them scores based on the three data points of recency, frequency and monetary value.

These scores, in turn, allow businesses to understand the value of their customers, whether they are worth pursuing and nurturing and how to better engage them.

This analysis is based on the marketing adage stating that 80% of business comes from 20% of customers, which is also known as the 80-20 rule.

As such, the RFM segmentation model provides a quantitative method for gaining a meaningful impression of customers.

Recency, Frequency and Monetary Value

Marketers and market researchers should be well-acquainted with the three data points comprising the core of the RFM model. All three of these measures are proven to be effective predictors of the various personas’ willingness to engage with the messages in different marketing campaigns.

The following explains the meaning behind each measure and their unique KPIs:

Recency

This measure deals with the following: When was the customer’s last transaction? When was the customer’s last engagement?

Recency is usually expressed in days from the last purchase as its primary metric. However, depending on the product, it may be measured in hours, weeks or years.

Customers who made a purchase recently are more likely to have a product and its brand on their minds and are also more likely to purchase or use the product again.

The KPIs of recency include:

Date of the customer’s last purchase
Date of the customer’s last engagement (ex: site visits, conversation with reps)
Date of the customer’s last activity (ex: logins, in-app usage, commenting)

Frequency

Frequency is concerned with the following: How often did a customer make a purchase within a given period of time? How often did a customer visit a store?

Aside from the physical space, this measure is also used to rate activity in the digital space, such as page visits, unique number of sessions, total logged-in time, time spent on site, time spent on a page, etc.

Customers who purchased once are more inclined to purchase again. First-time customers are good targets for follow-up advertising to retain them and convert them into frequent customers.

The KPIs of frequency include:

The number of sessions/ visits
The number of click-throughs
The number of conversions

Monetary Value

This value answers the following: How much money did the customer spend within a given time period? What is the total revenue generated from the customer?

Not all businesses are ecommerce, such as news sites or content sites (blogs, social media, etc.); therefore, they cannot measure monetary value much like a traditional business would. Instead, they can assign an engagement metric that they deem valuable.

Customers who spend a lot of money yield the most profit for a business. They are also more inclined to spend money in the future, more so than those who have spent less. These kinds of customers bring a high value to a business.

The KPIs of monetary value include:

Total Revenue
Average Order Value (AOV)
Engagement Metrics- Useful for two-sided business models that don't directly sell products.

The importance of Conducting an RFM Analysis

An RFM analysis is crucial for businesses to conduct for a number of reasons. Firstly, it informs businesses on critical customer behaviors and allows them to build customer personas by ranking and grouping customers quantitatively.

As aforementioned, this kind of analysis helps businesses predict how willing customers will be to engage in marketing messages and new offers. However, this kind of analysis can help with several other fronts.

Conducting an RFM analysis gives businesses the opportunity to increase their sales. This is because using this data for decision-making allows them to understand how customers feel, think and shop, and most importantly, what fuels their buying decisions.

The RFM model allows businesses to support personalization efforts, which includes creating more personalized marketing campaigns or website and in-app experiences for logged-in customers. This in turn increases engagement, as it provides relevant messaging and offers to the current customer persona or group.

This helps improve upon conducting a cohort analysis along with increasing retention. In terms of the former, an RFM analysis helps provide more info of customer behavior within different cohorts. As for the latter, personalization allows companies to provide more tailored experiences and messaging — the kind that can resonate more strongly with customers, thereby retaining them, either via engagement or keeping the business on their minds.

Finally, RFM segmentation plays a role in customer retention, which is of the essence for any business. Although customer acquisition is important, retention carries even more weight for businesses, as existing customers are 50% more likely to try a business’s new product. In addition, 9% of businesses lose customers when they don't take customer retention seriously.

When products, services and experiences are personalized and engaging, customers are more likely to remain patronizing a business. Thus, the RFM model contributes to customer loyalty.

The RFM Model and Scores

The RFM model segments customers based on a scoring system.

Each data point — recency, frequency and monetary value — is typically assigned a score of 1 to 5. 1 is the lowest score, signaling a poor ranking of the data point, while 5 is the highest and signals the most positive ranking.

An RFM cell is the collection of the three values for each customer. Companies can average these values together, then sort their customers from highest to lowest to identify the value of each.

Using this scale, each customer can have a score from 111 to 555, with a total of 64 possible combinations, or 64 customer personas from just three points of data.

The scaling systems used in different companies that perform an RFM analysis will differ. Some will use a scale of 1-4, while others may elongate it to 1-10.

Examples of Personas Based on Their RFM Scores

Given the numerous customer personas that businesses can uncover after performing an RDM analysis, there are several key personas they ought to understand. These personas have critical consequences for businesses.

The following lists several major customer personas that an RFM segmentation brings to light, along with the most appropriate marketing campaign to target them with:

The Brand Champion (R=5, F=5, M=5)

This persona represents the ideal customer, as it exhibits the highest possible RFM cell, which is a representation of the 3 scores. When customers are correctly nurtured, they can become brand champions, spreading positive feedback about a business, thereby bringing more customers to a business themselves.

Marketing campaigns for this persona: exclusive offers, pre-purchase of new products, premium customer support, refer-a-friend bonus

The Loyal Customer (R=4, F=4, M=3)

Also a top-tier customer, as this persona visits or engages with a business frequently and has recently bought from them. Although their monetary value is in the mid-range, they can become a loyal customer — with the proper offers. There are several things marketers can do to increase their customer lifetime value or CLV.

Marketing campaigns for this persona: Loyalty campaigns, volume discounts, brand messaging showing the effectiveness of a product

The Possibly Alienated Customer (R=1/2, F=3/4)

This customer has been a regular at some point but has stopped buying recently, revealing a possible alienation. Their needs may have changed or they may have had a poor customer experience. Brands should nurture them back into becoming regulars, as a low recency score can quickly affect their frequency permanently.

Marketing campaigns for this persona: Customer satisfaction surveys, welcome back offers, more ads on their typical products/ services

The New Customer (R=4, F=1)

This persona has recently discovered a business and has engaged or purchased from it. They may also have been customers at some point, but stopped doing business for an interim. Businesses should foster relationship-building with this kind of customer, as they are new or possibly made a one-off purchase after an interim of no purchases/engagement.

Marketing campaigns for this persona: Email list sign-ups, introductory offers, hints, tips, useful content, social media offers

The One-Off Big Spender (R=1, F=1, M=4)

This kind of persona spends a lot of money on a one-time purchase, but then doesn’t return to the business, or does very rarely. This points to a specific need at a specific time, as they made a significant purchase, but only once. Marketers can target this persona by sending them messaging that is hyper-focused on their needs and interests.

Marketing campaigns for this persona: Upgrade and maintenance offers, new promotions, content based on their interests, surveys

The Expired Lead (R=1, F=1, M=1)

The lowest-scoring customers and least viable kinds of customers, they don’t have a significant purchase history with a business and also score low on recent interactions. Businesses should not focus marketing campaigns on this kind of customer, as they are unlikely to bring any value to the company. These are also the weakest to turn into semi-regular customers.

Marketing campaigns for this persona: Awareness-stage messaging, content marketing, automated emails, along with some of the ads used for more valuable customers.

How to Conduct an RFM Analysis with Survey Research

When it comes to performing such an analysis, survey research is not a secondary task. It is a crucial part of identifying each customer via the RFM model. This is because surveys allow market researchers to ask their target market virtually any question.

The key is having access to an online survey platform that offers deployment across all geographical areas in which your customers reside, and ensuring that only the targeted population takes part in the survey.

Given that the RFM model only uses three data points, the bulk of the survey is going to be the three questions on those measures. When conducting such a survey, businesses can also execute competitive research — by asking these questions in relation to their competitors.

This can also help obtain a general idea of how customers shop. Researchers can do so by asking their customers about recency, frequency and monetary habits in the general sense, that is, without mentioning their brand.

As such, they can also ask supporting questions to better understand each of the RFM data points.

The following lists major and supporting question examples for an RFM analysis in the general sense:

RECENCY: When was the last time you bought shoes?
1. Supporting questions:
2. When do you intend on buying shoes again?
3. Are you looking to buy shoes anytime soon?

FREQUENCY: How often do you buy shoes?
1. Supporting questions:
2. How often do you buy shoes in the winter?
3. Do you intend to buy more shoes in the coming month?
4. Is there a specific retailer or brand you prefer, or do you buy from several?

MONETARY VALUE: How much do you typically spend on shoes?
1. Supporting questions:
2. Are you willing to pay other amounts for different kinds of shoes?
3. Which brands do you typically buy from?
4. Is price an important factor when picking out different shoes?

Surveys provide a practical means of asking all of these questions and more. With advanced skip logic, brands can route respondents to follow-up questions based on the answer a respondent gave to a preliminary question.

Finding the Most Valuable Customers

An RFM analysis helps you to define some critical customer personas based on three major customer behaviors. But without an online survey platform, performing such an analysis becomes an almost impossible feat.

The correct online survey platform will enable businesses to reach a wide network of customers in their target market, ask them any type of questions and use artificial intelligence to stamp out low-quality answers and survey fraud.

It will also help market researchers hone in on their RFM-based customer personas with additional data. Thus, businesses ought to choose the proper online survey platform to conduct an effective RFM analysis.

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What is Experimental Research & How is it Significant for Your Business

Defining Experimental Research

The Key Aspects of Experimental Research

The Three Types of Experimental Research

Pre-experimental research design:

Quasi-experimental Research Design

True Experimental Research Design

Why Your Business Needs Experimental Research

Key Independent Variables

Key Dependent variables

An Example of Experimental Research for Business

Experimental Research Survey Examples

How Experimental Research Differs from Correlational, Exploratory, Descriptive and Causal Research

The Advantages and Disadvantages of Experimental Research

The Advantages

The Disadvantages

How to Conduct Experimental Research

Using Experimental Research and Going Further

Understanding Customer Behavior with Market Research

Defining Customer Behavior

The Key Aspects that Customer Behavior Investigates

The Importance of Examining Customer Behavior

Customer Behavior Patterns

The Things That Affect Customer Behavior

How Market Research Helps Businesses Understand Customer Behavior

Improving Business Goals and Scaling by Understanding Your Target Market

How to Use Concept Rules in Your Monadic and Sequential Survey

What can I achieve with concept rules?

How do concept rules work?

What is the mobile flow a respondent gets with concept rules applied?

Can I combine a sequential test with concept rules?

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Understanding the Customer Acquisition Cost (CAC) and How Surveys Lower It

Understanding the Customer Acquisition Cost (CAC)

The Importance of the Customer Acquisition Cost

When and How to Calculate Customer Acquisition Value

How to Determine a Customer’s Worth with the CAC

Customer Lifetime Value to Customer Acquisition Cost Ratio

How Surveys Help Lower the CAC

Rounding off Any Acquisition Campaign

Increasing the Customer Retention Rate with Surveys

Understanding the Customer Retention Rate

The Importance of the Customer Retention Rate

How to Calculate the Customer Retention Rate

The Customer Retention Rate Across Industries

How Surveys Can Increase Customer Retention Rate

Making Strides in Retaining Customers

Diving Into the Net Profit Loss and How Market Research Helps Avoid It

Understanding Net Profit Loss

The Causes and Solutions of Net Profit Loss

How to Calculate Net Profit Loss

Understanding a Profit and Loss Report

<img decoding="async" class="size-full wp-image-87315 aligncenter" src="https://resources.pollfish.com/wp-content/uploads/2021/08/Diving-Into-the-Net-Profit-Loss-and-How-Market-Research-Helps-Avoid-It_In-Post-Image_1.png" alt="" width="800" height="400" />Examples of Net Profit Loss

How Market Research Helps Avoid Net Profit Loss

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Reaching Profit Goals

Building Effective Marketing Personalization with Survey Research

Understanding Marketing Personalization

The Importance of Marketing Personalization

The Aspects of Marketing Personalization

How Survey Research Fosters Marketing Personalization

Taking Personalized Efforts to the Next Level

How to Identify and Build Customer Personas with Market Research

Understanding Customer Personas

The Key Aspects of Customer Personas

The Importance of Identifying Customer Personas

How Market Research Helps Build Customer Personas

How to Create Surveys that Identify and Build Customer Personas

Creating the Most Effective Marketing Campaigns

Syndicated Research Vs Custom Research: Which is Most Ideal for Businesses?

Understanding Syndicated Research

The Key Aspects of Syndicated Research

The Advantages and Disadvantages of Syndicated Research

The Pros

The Cons

Understanding Custom Research

The Key Aspects of Custom Research

The Advantages and Disadvantages of Custom Research

The Pros

Examples of Net Profit Loss