OPINION3 November 2011

Improving your ROE (return on effort)

Trends

Never mind ROI – Mark Earls was out to generate a better Return On Effort at the Festival of NewMR 2011 with a presentation on the importance of pattern spotting in large data sets.

Never mind ROI – Mark Earls was out to generate a better Return On Effort at the Festival of NewMR 2011 with a presentation on the importance of pattern spotting in large data sets. The aim of this technique is to quickly understand the nature of the market a company is dealing with and whether consumer behaviour within it is based on independent choice or social influence.

“What we are talking about is not boiling the ocean,” he says. “It’s spotting patterns in population data sets” – retail sales data being a prime example. It’s another way of going about understanding individuals, Earls says. “Market-level patterns reveal what lies beneath.”

Markets driven by independent choice and social influence have distinct sales distribution curves – respectively, the short tail and the long tail. In the former, a large number of items have a decent share of market. In the latter, a very small number of items account for most of the market volume but with a large number having a small share.

In long-tail markets social copying is at work, says Earls – and this forms the subject of his new book, I’ll Have What She’s Having. In these instances there are two sources consumers might look to (whether consciously or not) to shape their purchase decisions: experts when there’s very few items to choose from, and peers when they are overwhelmed with choice.

Earls reckons that social influence has a hand in purchase decisions in a lot more markets than one might assume. Crucially, though, he says much traditional market research is better suited to understanding purchase behaviours in those markets where choices are arrived at independently, either through a process akin to guesswork or careful consideration of options.

Understanding social influence is within the capability of the research industry, Earls reckons, but those already doing “great stuff are taking inspiration from outside the industry”.

It was a suitable note to end on, as BrainJuicer CEO John Kearon followed Earls with a talk about how the works of psychologists Daniel Kahneman and Paul Ekman is being used to help researchers understand the role of emotion in consumer decision making-and how to measure it.

“One of the biggest mistakes we’re all guilty of in business is that we over-intellectualise marketing,” says Kearon. We – humans – all “think so much less than we think we think”.

“We need to get better at measuring emotions. It drives most decisions,” he says. That’s why the best-performing ads are stuffed full of emotion – ads like the “Just One Cornetto” campaign which lingers on in the memory long after it last ran (in the 1990s, according to Wikipedia).

An ad with a strong message that scores well on traditional testing measures is still far from being as effective as it could be, says Kearon. “If you have a strong message, you cannot have a four- or five-star advert – you are getting people to think and stopping emotion from taking over.”

Speaking of getting people to think, Kearon kicked off his talk with a request for Festival delegates to imagine a world where market research has been made illegal, where surveys have been banned. “How would organisations make decisions?” he asked – before leaving us all hanging. “That’s for another time,” he said. Or, if you like, for pondering in the comments thread below.

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