GETTING TO KNOW YOUR CUSTOMERS BETTER

A Guide to Market Research

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Whether it's informal or formal information gathering, research is within your reach. And the value in research is the ability to accurately predict a future situation in a way that will be useful to you.

Typical issues which market research can explore include, but are not limited to:

• Points of difference between you and the competition
• Key attributes consumers consider when making buying decisions
• Identifying and understanding consumers who are the most interested in your product
• Effectiveness of advertising and brochures
• Customer satisfaction

What Is It You Want To Know?

Setting objectives is one of the most important steps in ensuring that information produced through market research will be useful in decision making. Ask yourself: What is the most important piece of information I need to gain through this research that will help me make a decision. Then stay focused on that. Trying to explore too many diverse areas at one time only makes the research less effective.

Objectives should be clear, concise, and committed to writing to ensure that they are well understood (and agreed to) by everyone involved in the project. Having done this, you can decide how to achieve these objectives.

For example, suppose that a convention and visitors bureau wants to know how effective their marketing has been in attracting people to take vacations in their area. Objectives for a conversion study of this type might include:

• Determine what percentage of people who called actually took a vacation in that area or plan to do so in the near future
• Assess reasons why other callers did not take a vacation in the area (i.e., went somewhere else, decided not to take any vacation)
• Explore what else the CVB could do to encourage people to visit
• For another example, suppose that an attraction is considering the addition of a new feature. This attraction's research objectives might include:
• Explore what consumers look for in attractions of this type
• Gauge consumer reactions to new feature concept
• Identify characteristics of consumers most likely to visit the new feature (i.e., families with small children, weekend v. weekday visitors)

What Methods Can You Consider?

There are two main types of consumer market research, qualitative and quantitative. Each is useful for answering different marketing questions, and there are a variety of techniques within each category.

Qualitative Techniques

Qualitative research is useful for gaining insights into consumer attitudes, beliefs, motivations, and behaviors. Results from qualitative research don't necessarily reflect the opinions of a larger consumer base. They are intended to be exploratory in nature. Uses for qualitative research include:

Idea generation. By hearing and observing people discussing and perhaps looking at a product or promotional materials, you can gain new insights.

Development of quantitative research. Before conducting a study with a large number of people, you can talk to a smaller group to learn about the category first. From a smaller group, you can develop hypotheses to test and create a questionnaire with wording used by the consumers. You can also test ideas before you invest additional money.

Qualitative research usually uses a small sample, since the goal is to explore issues in depth. The interview format is generally in-person, and is loosely structured. Analysis of results is interpretive in nature, and often includes exact quotes from participants. Types of qualitative techniques include:

Focus groups - These are group interviews conducted by a moderator with pre-recruited respondents who meet established criteria (i.e., took a Wisconsin vacation within the last three years and have children under age 18 living at home). These focus group interviews generally last 1½ to 2 hours, are held in a special facility with viewing and recording capabilities, and the respondents are paid for their participation. Full-size focus groups consist of 10 participants; mini-groups include four to six participants. People in focus groups should not know each other before the groups.

The key reason to select focus groups over other qualitative methods is to obtain interaction between participants: comments made by one participant may spark others to share thoughts they wouldn't have otherwise. The main drawback to focus groups is that participants tend to avoid disagreeing with one another and more dominant group members can inhibit others from expressing their views.

Refer to example following this guide for a sample screener questionnaire

and focus group discussion guide.

One-on-ones - These are in-person interviews, usually 20 minutes to one hour in length, with individual respondents. Respondents can be pre-recruited or may be recruited at shopping malls or other high-traffic places, also using pre-established screening criteria. They are usually paid for their participation. One-on-ones are most appropriate for sensitive subjects which may be difficult to discuss in front of others or for in-depth evaluation of new concepts or promotional materials.

Dyads - In-person interviews with two respondents, usually people who make decisions together, such as a husband and wife.

Quantitative Techniques

Quantitative research measures attitudes, perceptions, awareness levels, and behaviors of a large number of consumers. The results of this type of research can be projected to the population at large. Quantitative research is conducted when consumer issues have already been identified, usually through qualitative research, but it is necessary to measure their relative importance.

The preferred minimum sample size for quantitative studies is 400 completed interviews. That will give you a minimum statistical precision of +/- 5 percentage points at the 95% level of confidence. This means that if you kept doing the same study over and over, drawing new samples each time, 95 times out of 100 the results would fall into a range of +/- 5 percentage points.

To keep costs down and ensure statistical reliability, interviews are generally short and the questions are highly structured. Avoid the inclination to group all of your responses into two categories -- yes/no, like/dislike -- since these generalities will hide subtle differences and relative importance of certain attributes.

As with qualitative research, this type of study should be conducted with respondents who meet your target criteria, for example, snowmobile owners who take at least three overnight snowmobile trips in a typical year.

Analysis is more structured than qualitative studies, and results will usually be reported in tables and charts.

Types of quantitative techniques include:

Telephone studies - Respondents are given a short - usually 10-15 minutes - interview over the telephone. This type of study is the most common because it is relatively inexpensive and easy to obtain a representative, random sample. Participants are generally not paid.

Refer to the sample telephone questionnaire at the back of this booklet.

Mail studies - Very cost-effective but no longer common, since response rates tend to be very low and it takes longer to obtain results. This method is useful if participants need to read detailed descriptions or answer complicated questions that can't be asked over the telephone. Cash incentives for completing the questionnaire are often included in the mailing.

Intercept studies - Respondents are recruited in a public place, often a shopping mall, screened for target criteria and given a highly structured interview. This method is appropriate if the respondent needs to look at products, pictures of new products, or advertising. Intercepts are also appropriate if it is important to interview respondents in the context of something they are doing: For example, an attraction may want to conduct exit interviews with their visitors to get their top-of-mind reactions to their experiences there.

How Do I Get a List of People To Interview?

There are a variety of ways to get representative samples for various types of research. Two are outlined below.

Research suppliers usually have lists of consumers who meet different demographic criteria, such as families with children under age 18 or affluent households. These lists can be further refined by asking screening questions of respondents to establish vacation habits, boat ownership, etc.

You can develop your own lists by collecting information about your customers and storing that information in a database (see chapter on databases). This would be appropriate for studies to measure conversion or satisfaction, for example.

Research Ethics

It is important to know the unwritten rules of conducting research in order to avoid irritating respondents or diminishing their willingness to participate in research. Here are the key dos and don'ts:

Maintain confidentiality. Even if you do not explicitly state that respondents' answers will be held confidential, they will presume this. Once they have participated in a study, they may not be contacted again unless they have agreed to further contact. Information obtained through market research should never be added to a database, for example, to enhance future contacts with respondents.

Do not mix selling and research. It is important that research activities be kept separate from any outbound direct marketing. Research participation rates have been steadily dropping, in part from consumer fears that a survey will turn into or lead to a sales pitch.

Is There More Informal Research I Could Conduct?

Collecting data can be done by simply observing and informally interviewing customers. Make your employees part of the research team. Front desk, wait staff, grounds workers and other employees can be informed as to the types of information you're after and "questions" you want asked when the opportunity presents itself. Make certain the questions are delivered in a conversational style so they fit naturally into a casual conversation with a guest.

Another and even more basic and reliable research method is systematic observation. It can take a multitude of forms, from parking lot license plates to food item sales to favorite areas of your resort.

Informal research can also include experimentation. Do this on a limited level and carefully monitor guest comments. This should help you decide whether to buy or change anything to enhance customer satisfaction.

Finally, a useful but often overlooked research tool is complaints. A complaint is really a request for a service or product. As with all data, analysis will require that someone decide if the complaint it unique, or the indicator of a trend or opportunity.

DATABASE MANAGEMENT

Developing a database of information on your customers can be useful in two ways: It can provide information on customer preferences and trends, and it can be the source of names for research.

Accurate data collection means doing it when you're on the phone with a customer or at time of check-out. It is dangerous to wait until the end of the day to recall information.

What Questions Should I Ask?

Begin with the basics:

• Name (make certain spelling is correct)
• Home address (zip code + four) and shipping address, if different
• Phone number and e-mail
• Date called
• How they got your number
• Then move on to information that may be helpful for operations and marketing:
• Have they visited your area before; number of times in the last two years
• What is their typical travel group make-up (parents and children, including age of children; couples; groups of friends)
• What month they plan to visit
• What are their primary activities of interest (examples might be golf, attending a festival, water sports), no more than three
• What other attractions do they plan to visit (could be useful for partnering with other businesses)
• Type of lodging they'll be using
• Do they have any special service or product requirements during their visit (diet, lodging, indoor versus outdoor activities)

Other database additions to consider, depending on your business:

• Trip purpose -- business, leisure, combination of both, meetings and conventions, motorcoach
• What publications have they received on your area
• What other areas in Wisconsin do they plan to visit

How Do I Use What I've Entered in my Database?

The goal is to develop one-to-one relationships with your customers, building long-term brand loyalty in the process. Here are some suggestions on applying what you've learned about your customers:

• Stay in touch with your most frequent visitors via a newsletter, new brochure, or frequent visitor discount program.
• If you use advertising, add special extension codes to each ad. When you ask how they heard of you or got your number, prompt them for an ad code. This will help you track effectiveness of your ad budget.
• Knowing the time of year they generally vacation, send them information in advance, reminding them it's time to plan their trip to your location.
• If many of your customers mention the same three things they like to do, make it easy for them to plan by partnering with other tourism businesses in your area or even other destinations.
• Develop a profile of your "Best Customer" -- the one with the highest annual or even lifetime value to your business -- and consider buying qualified direct mail lists of like people to generate new business.
• If you have a lot of business travelers, perhaps there is an opportunity to invite them to spend an extra day in the area as a leisure traveler.

Don't Compromise Customer Privacy for Profit

With each contact, it is critical that you ask whether that customer is willing to have their information shared with other tourism businesses in the area. It can be positioned as a service if you know, for example, that they want to have golf reservations or attend an event and you can provide their name to a partner business to make that happen. If they prefer not to have their name shared, offer the phone number or e-mail address of the attraction or association that could further help them with their planning. Finally, don't sell or trade database information without your customer's knowledge. It will lead to a level of mistrust among your valued customers.

Database as Source of Names for Research

If you want to learn more about customer satisfaction, how effective your publications are in convincing callers to come, or trends in customer preferences, then look to your database as a rich source of people to interview. Whether it's recruiting for a focus group or conducting a phone survey, your database will now allow you to pick and choose customers depending on what information you want to gather.

You can select names in one of two ways:

• If you want a representative sample of customers, be sure to include a variety of people who stay with you or patronize your business. For example, you might design a sample that includes couples on a romantic getaway, families with young children and senior citizens.
• Or you can limit your sample to only one group or market segment, knowing that the information you gather isn't an indication of how other market segments might react. You can come to conclusions or recommended future actions for this group only. For example, people who enjoy fishing will have different preferences than people who come to your area for power boating.

How Will I Know When I've Done Enough Research?

One-time data collection is, at best, a snapshot of what was. Trends are evident only after time, so make a commitment to gathering information on an ongoing basis.

Then share the information with others. Your employees have a vested interest in knowing how they are doing and in understanding why certain changes are being made.

Think of it this way: A good research project should lead to new questions that will help you better serve your current customers and turn new customers into loyal customers.

Recommended Reading

Churchill, Gilbert A. Jr., Marketing Research: Methodological Foundations, 1995.

Churchill, Gilbert A. Jr., Basic Marketing Research, 1991.

Greenbaum, Thomas L., The Handbook for Focus Group Research, 1998.

Pope, Jeffrey L., Practical Marketing Research, 1993.

Templeton, Jane Farley, The Focus Group, 1994.

Additional Periodicals Available by Subscription

Advertising Age, 800/678-9595

American Demographics, 607/273-6343

Journal of American Research/Marketing News, 800/AMA-1150

Marketing Tools, 607/273-6343

Promo, 800/643-4054

Starch Readership Reports, 212/455-4977

Target Marketing, 215/238-5300

Sample Screening Questionnaire: Focus Group

Hello, my name is ----------, and I'm with -----------, an independent professional research organization that surveys the public's attitudes toward various products and services. Today we are talking to people about vacations and vacation planning. May I please speak with the person in the household who does most of your household's vacation planning?

1. Do you, or does anyone in your family currently work in advertising, market research, or the travel or tourism industry?

2. In the part 12 months have you spent at leat 3 nights away from home on one or more pleasure trips?

3. In the past 12 months have you taken at least one or more overnight trips for pleasure in the state of Wisconsin?

4. In the previous 5 years approximately how many overnight pleasure trips have you taken in the state of Wisconsin? _______

5. Of those pleasure trips to Wisconsin, approximately how many were takend to visit family and friends? _________5a. Of those vacations to Wisconsin, approximately how many were taken to visit vacation property you or some one in your family owns in Wisconsin?_________*At least one-half of each group sould answer "zero" or "none" to both question 5 and 5a.6. Which of the following age groups best represents your age (READ LIST).

What was the highest grade in school you had the opportunity to complete? (READ LIST).

8. In the past six months have you participated in a marketing research study where you were talked about travel and tourism and gave your opinions on them?

9. Do you have children living at home with you?

9a. (IF ANSWERED "YES" Q9) How many children do you have and what are their ages?# of Kids ___Ages ___ ___ ___ ___ ___ ___ ___ ___ 10. We are conducting a focus group with counsumers such as yourself. The discussion will consist of 8 to 10 people plus and experiences moderator and it will last approximately two hours. No special preparation is necessary, we are intereted in your opinions as a vacation planner. You eill be paid $40 for your valuable opinions. You do not have to worry that we will try to sell you anything, as I mentioned before we are a professional research company. The discussion will take place at our offices at ____________________ on__________.Would you be willing to participate?

Discussion Guide: Non-Visitor Focus Groups

I Intro & warm-up

Purpose of group

All opinions important

Mirror, taping

Introduction - where did you go on your last vacation, with whom, what did you do

II Vacation planning process

Thinking of a typical vacation - who in your vacation party initiates planning process?

What was the trigger which got the planning process in motion?

Who else influenced the process?

Which did you pick first, destination or activities?

How long was your planning process?

How much planning did you do before the trip? (1-10 scale from "point the car in a direction" to "schedule the rest stops")

Who participates in planning?

Information needs:

What information sources do you look to? PROBE for official state or area info, travel agents, travel magazines (articles & ads), purchased guide books, family, friends, videos, Internet, newspapers (stories & ads), television (programs & ads), etc.

Do you get information before trip, during trip or both?

Is this process the same for all your vacations? If not, what factors make it different? (vacation party make-up, season, vacation length, destination, activities, etc.)

III. Favorite vacations

Thinking about your favorite vacation, where have you visited?

How long did you stay?

What did you do? PROBE duration, party make-up, expense, etc.

What about this vacation made it better than your other vacations? PROBE: Why is that important? What benefits do you derive from that?

What did you get out of that vacation that you didn't get from a vacation elsewhere?

IF NOT MENTIONED, PROBE ON FAVORITE VACATION WITHIN 8 HOUR DRIVE OF HOME: where have you visited?

How long did you stay?

What did you do? PROBE duration, party make-up, expense, etc.

What about this vacation made it better than your other vacations? PROBE: Why is that important? What benefits do you derive from that?

What did you get out of that vacation that you didn't get from a vacation elsewhere?

What have you gotten out of vacations elsewhere that you didn't get from that favorite vacation?

IV. State imagery

Handout 1: Unaided word association with various states - IL, MI, WI, MN, IA?

Handout 1a: Unaided VACATION word association with various states, by season

If you were going to try to convince a friend to take a vacation in Wisconsin, what would you tell him/her? (Letter-writing exercise)

V. Evaluation of publications (Auto Tours, Go To It Guide, Calendar/Recreation Guide prototype)

Discuss for each:

Overall impression

Size - too big, too small

information quality

information quantity

organization

proportion of words v. pictures

prefer activity specific, or broad and comprehensive?

Would this book be useful to you? Would it be useful to some one else - a new visitor, for example?

How would you use it? PROBE: Before the trip? During the trip? Both?

Would you save it for future reference?

How would you change it to make it better, more useful?

If you could pick just one, which one of these would it be?

VI Wrap-up

Sample Questionnaire: Magazine Conversion Questionnaire

* Ask to speak to the person on the list.

Hello, my name is _____________, from _____________, (an independent market research company or your business). Tonight/today, we are conducting a survey about traveling in the state of Wisconsin. We are not selling anything, and this survey will take less than five minutes of your time. Could I speak with the person who does most of your household's vacation planning?

Q1a. For the purposes of this survey, we are defining a vacation as a trip for pleasure, including day trips and overnight trips. Did you take a vacation in Wisconsin in 1995?

Q2a. Did you take a vacation in Wisconsin in (YEAR)?

Q2b. If you did take a vacation on Wisconsin in (YEAR), in what month or months was that? DO NOT READ LIST, CIRCLE ALL THAT APPLY.

January (1) February (2) March (3) April (4) May (5) June (6) July (7) August (8) September (9) October (10) November (11) December (12) Don't know (99)

Q3a. Do you plan to take a(nother) vacation in Wisconsin within the next 12 months?

Q3b. How many vacations do you plan to take in Wisconsin within the next 12 months?

______

Q3c. If you plan to take a vacation in Wisconsin within the next 12 months, in what month or months would you be likely to take that vacation? DO NOT READ LIST, CIRCLE ALL THAT APPLY.

January (1) February (2) March (3) April (4) May (5) June (6) July (7) August (8) September (9) October (10) November (11) December (12) Don't know (99)