Now that’s market research!

A little fun for Friday…

Check out “the Tinkerer,” New Belgium Brewing Company’s blog for their “market research” for their new canned Fat Tire.

From the website:

Yes folks, we believe in market research, and if that means taking our cans rafting to prove their versatility and packabilty, then so be it.

An offer to New Belgium: I’m headed out backpacking next week, so if you guys would like additional testing, please let me know.


Three laws of Great Graphs?

What graphs should you use in your presentations?

Marketing uber-guru Seth Godin recently posted an interesting set of guidelines (and a follow-up coda) on his website.  As is customary for our culture, Seth’s rules were three:

1. One Story
2. No Bar Charts
3. Motion

His rules quickly were a lightning rod for controversy, so let’s separate the wheat from the chaff:

1. One Story Seth says (and has said before) that a graph should avoid nuance and be easily understandable in two-seconds and should make only one main point.  But Seth is giving his advice in the context of making a memorable, high impact presentation, where (in Seth’s words) you need to make a “point in two seconds for people who are too lazy to read the forty words underneath.”

Other types of contexts require different types of graphs.  Reports can handle more complex graphs (but executive summaries should probably be simpler), exploratory analyses can go even more complex, and data-visualization as art need not even be readable!

But let’s take a second look at that quote.  By calling your audience “too lazy to read the forty words underneath” Seth is assuming that the audience doesn’t care.  This echoes what he says in his follow up post

In a presentation to non-scientists (or to bored scientists), the purpose of a chart or graph is to make one point, vividly. Tell a story and move on. If you can’t be both vivid and truthful, it doesn’t belong in your presentation.

Again, this only matters when your audience is not invested in your topic.  For topics and presentations where there is much more intrinsic interest among your audience, you can get more nuanced.  But there is no reason a nuanced chart cant also have a simple message, as the Junkcharts blog points out.  Or, as Jon Peltier puts it, by removing nuance, you are insulting your audience, telling them that “They can’t handle the truth!”

2.  No Bar Charts. Seth has made the point before that a bar chart can obscure the truth, and muddle your story.  Instead, he suggests using a pie chart.  A confession: I hate pie charts (as do others who make graphs for a living), but they do have a time and a place for simple graphic displays, especially since audiences are familiar with them and expecting them.  But don’t scorn the useful bar chart!  Yes, they can be misused, but so can any other type of graph, and (as pointed out by Stephen Few) pie charts are actually perceptually inferior to bar charts even for presenting simple data.  The one point I do agree with is that bar charts should not usually be used to display time series results (often line graphs are better for that) (Seth defended his no bar charts decision in his follow up post–to stop this from turning into Moby Dick, we’ll address that with our own follow up post).  The issue here is really using a chart, and choosing the data, that best illustrates your story for your audience.

3.  Motion.  Seth really dropped the ball here.  For someone that understands the distraction caused by PowerPoint’s dubious dissolves and annoying sound clips (pdf), his suggestion of creating two slides with graphs set up to show changes is just as cheap and distracting a trick.  Stephen Few has a much better suggestion (although even this can be improved), to show the change by making parallel  bar graphs.  Here the story is “Trolls were a problem, but Gremlins are now.”

If trolls and gremlins were the only categories on the graph, then Seth’s suggestion would work great.  And if the biggest problems are all you care about, then that is fine.  But if you have this data and your story is different, you need a different graph and a different presentation style than Seth suggests.


Design your charts (and all your materials) with your story and your audience in mind.

And as for this non-controversy, we’re really all on the same team here–we all want clear, interesting presentations.  Seth wants to accomplish that by limiting what people do with graphs; those who he (dismissively) calls data purists want to educate people to do more with their graphs so they make the right choices.  Seth’s plan works for the novice.  But when the training wheels are ready to come off, I think it’s better if presenters know how to make the best choices for the needs of their story.

Which Starbucks will close?

To many Starbucks patrons out there, the news that Starbucks is closing 600 stores may be a cause for panic. Around the office, a few of us thought about starting an office pool to bet on which ones near us might close. So, I began to wonder what factors will go into their decision to close a particular location. (I guess this is the curse of working in market research: asking “why” all of the time.)

My initial thought was that Starbucks would close the 600 lowest performing stores. Easy. But how would “lowest performing” be defined? And why 600 stores? I had a discussion, fittingly over a cup of coffee, with fellow analyst, Dave, about the factors we might look at: total customers, revenue (and profit) per customer, and some other typical business measures.

Our conversation then meandered to more complicated factors, such as the amount of pedestrian traffic around the stores; proximity to other Starbucks; whether closing one store would cause another location to become too crowded; ease of entry and exit (and whether there is a drive through); and rent/lease terms in various locations, among others. I quickly decided my initial thought of just looking at the numbers ignored the many interdependent variables that must be taken into account and the change in consumer behavior that would occur if a particular location were to close.

Their final decision about which stores should close, and how many will close, must be based on several of these variables weighted by their order of importance. Simply identifying low performing stores in a vacuum ignores the interplay between the features of each store and its environment as well as the complex interactions between locations, especially given the close proximity of many Starbucks locations (there are no fewer than 10 Starbucks locations within a mile of Corona’s office). As a side note, these factors would probably be the same variables used in determining whether and where to open a new store.

While I don’t think I’ll do this analysis in my free time (unless Starbucks would like to hire us to do so), it would be one complex – and yes, fun – optimization model to build. Then I would be sure to win that office pool.

It’s not about what people “want”- it’s about what they need

I occasionally run across articles, blogs, or other people at events who seem quite opposed to market research – and that’s putting it lightly sometimes.

The most recent of these examples is this opinion piece arguing that common sense trumps market research. One of his main arguments is that people don’t know what they want in the future, so you can’t ask if they want some new, completely foreign product because they’ll have no context to put it in and therefore say no. I agree that you usually can’t ask people what they think about products for which they have no context. I’m sure when people first heard of the idea of machines flying, or a bulb glowing with light, or talking to people over very long distances – all points made by the article’s author – they would have responded with great skepticism. Ask me what I want in my next car and I wouldn’t say, “a car with a removable, flexible skin.

But what all of these inventors and many more did were to identify needs; communicating over long distances, safer and cleaner lighting, and the possibility of quicker transportation. And this is what market research is great at – identifying needs. Sometimes this may be simply asking people what they like/dislike about products, but often times it’s about identifying broader needs and seeing how you can develop your products or services to fulfill those needs. Frozen dinners were developed because of two larger societal trends: television and time-saving appliances.

Successful companies today continue to invest in products based on consumer insights. You have to look no further than your home to see many of these … the Swiffer (the need: a duster that picks up dust instead of spreading it around), Febreze (the need: eliminate odors not cover them up), whitening toothpaste (the need: whiter teeth and a better smile).

Auf Wiedersehen Stephanie!

Last Friday was the last day at Corona for Stephanie Papilaris, the Administrative Coordinator for CEO Kevin Raines and the glue that kept the quantitative analysis team running (and kept us from making mixed metaphors).  She’s returning to her home in Tampa, Florida and we sent her off in the high style that Corona is famous for:

If you (or someone you know) is organized, motivated, quantitatively inclined, and willing to work with a great group of research whizzes, please apply to join our team!

Market research for the individual

Ran across this site today, thanks to a Google alert.

FaceStat – which allows you to rate (and be rated on) attractiveness, occupation, political leanings, and several other characteristics of random individuals who post their picture – seems to be one more twist in social networking sites that bills itself as “market research for the individual. ” My initial gut reaction was, “Yeah, its stereotyping at its worst,” but isn’t that what we do with brands (or nearly anything else when we first see it)?

We even test for this during focus groups or other methods of testing logos, media, etc, when we are asking for people’s initial reaction. What does it remind you of? What does it convey? Though, when doing it with real people it may become too personal.

It would be interesting to compare different people with the same descriptions to see if trends start appearing. Does certain clothing make an individual smart? Does smiling in their picture make them more likely to be attractive? Can you really tell how liberal someone is just by looking at them?

Of course, the value of the ratings are only as good as the people doing the ratings. Most people, if they click at all, are probably only going to rate a few pictures before they lose interest and spend their time on the web doing something more interesting. Those few souls who, for whatever reason, like rating pictures will likely be doing most of the ratings. And whatever their reasons for doing so, it probably makes them (and likely their ratings) systematically different from the majority of society.

The many uses of research

We’ve completed research on topics for which most people would never imagine that market research could be used (romance writers, pregnant smokers, and mountain lions, to name a few). In fact, I’m sure many people only consider market research to be used for consumer goods.

But, even I was surprised when I ran across this article on market research being used to design parenting classes. It is a classic market research example showing the disparity between the product offering (i.e. the classes) and the consumer needs (i.e. what parents wanted). In reality, market research can help better understand the needs and wants of the target audience for virtually any product or service, whether that product or service is being sold, or provided at no-cost, say by a government agency, or nonprofit organization. Is there any subject or industry market research can’t help?

Market research on gaming leaked

I first saw this post the other day and since then I have been seeing information on this story pop up everywhere.  In short, Intellisponse, a marketing research firm, appears to have leaked some information about their clients’ potential products.

While its always fun to read about other research, I hate to do so at the expense of another company – in this case, Intellisponse. At least on the outside, it appears their clients (Microsoft, Activision) are not acting upset, confirming that they are looking into many concepts, but that none are guaranteed. We’ll see how this plays out down the road. My take is that the amount of PR they’re getting for upcoming games will probably outweigh the potential leaks to competitors (though this doesn’t justify an unapproved leak by the company if that was the case).

In the mean time, gamers everywhere (and a few market researchers) will enjoy the gossip (and research).

The U.S. Census: Great-great-grandparent to this Blog

We use a lot of data from the Census Bureau in our work at Corona, from building demographic profiles to weighting surveys, so I love seeing how the census has had an effect on society outside of its nominal purpose.

On the bus this morning to work I started reading Jonathan Zittrain‘s new book The Future of the Internet – And How to Stop It. It looks like a really interesting argument for open, customizable systems (i.e., the current internet) over secure-but-sterile closed systems (i.e. AOL, the iPhone). But what caught my eye was this passage early in the first chapter:

Herman Hollerith was a twenty-year-old engineer when he helped to compile the results of the 1880 U.S. Census. He was sure he could invent a way to tabulate the data automatically, and over the next several years he spent his spare time devising a punch card system for surveyors to use. The U.S. Government commissioned him to tally the 1890 Census with his new system……It took only two and a half years to tally the 1890 census, compared to the seven years required for the 1880 census. Hollerith’s eponymous Tabulating Machine Company soon expanded to other governments’ censuses, and then to payroll, inventory, and billing for large firms like railroads and insurance companies.

Today, we know Hollerith’s firm as IBM.

IBM, of course, led the computing revolution by contributing to the development of mainframes (and, just as importantly, the sale of mainframes), which led to personal computers, which led to the widespread adoption of that academic curiosity “the internet,” which led to the development of blogging.

(Of course, blogging owes just as much of a debt to Napoleon’s invasion of Egypt, but that’s another story).

So, after a long chain of connections, the decisions of the Founding Fathers have lead directly to you reading these words today!