Be a Mind Reader With Consumer Research |

Each year companies spend millions of dollars understanding their customers’ likes and dislikes. Increasing complexity has been accompanied by the development of sophisticated tools to enable marketers decipher their markets. Consumer research is invaluable for businesses seeking to stay ahead of the game.Today’s educated customers demand high-quality goods and services. It has traditionally been the role of consumer research to identify how consumers think and deconstruct their decision making process.One of the formal definitions of consumer research says that it is “The study of individuals, groups, or organizations and the processes they use to select, use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that these processes have on the consumer and society.”Consumer research can have a far reaching impact on your marketing strategy, since it seeks to analyze issues such as:Consumer Decision-making: Any purchase is made to satisfy human needs and wants. Decision making depends upon the degree to which product performance meets customer expectations. Involvement and habits play an important role in the decision making process. Involvement refers to the personal importance of the purchase – does it merely have functional value or is there a high emotional quotient involved? Alternatively, many decisions can be based on habit. Consumer research plays a vital role in understanding the internal and external factors that influence the act of purchasing.Consumer Information Processing: Generally, there are four stages to the way in which a consumer processes information. 1) understanding the features of a particular product or service 2) storing this information in memory 3) forming an attitude towards the product or service in question 4) making inferences prior to decision-making.Values and lifestyle: Values provide the motivation for purchase and lay the foundation of consumer lifestyles. They are usually influenced by culture, family, media, etc. and differ from person to person. Consumer research tries to understand how consumers use products and services to attain their cherished values. From a marketing point of view it is important to know how consumers are influenced by their environment and address differences accordingly.Understanding consumer lifestyle can also open up avenues for the development of new products or services. Small wonder, that consumer research is at the heart of any new product development. It finds wide application in exploring, testing, validating product design, development of new products and improvement of existing ones.There are two ways of conducting consumer research:1. Primary Research, where information is gathered directly from consumers. This is again classified into two categories a) quantitative research like surveys, tracking, experiments etc. and b) qualitative research like face to face interviews, focus groups, observational research etc.
2. Secondary Research, where published information is accessed from other sources such as research reports, consulting firms, magazines, online media and others.The choice of consumer research depends on a range of issues such as product category, research objectives, and of course, budget. Sites like TradePort which offer a tutorial on how to conduct and use market research can provide greater clarity. So could books such as “Know Your Customer”, “Consumer Behavior” and “Acknowledging Consumption”.

Service Sector Stimulus |

How can our economy get the most bang for its buck in terms of consumer spending? In the past 35 years or so the emphasis has been on growing the service sector of our economy so it seems to follow that we need to put more emphasis on stimulating that sector. My humble reasoning powers suggest that when a consumer spends $100 at a big box retailer on consumer items (most of which are manufactured outside the US), 30 to 50% of that $100 goes outside the US doing little to further stimulate the US economy.If a person has $100 to spend on a consumer item, she can get something that costs about $92 after paying about $8 for sales tax. Typically half of that $92 is the wholesale cost. That means that about $46 represents the retailer’s gross profit which is divided among domestic stakeholders including property mortgage/rent, utility providers, business taxes, employees and shareholders stimulating the US economy while the remaining $46 is potentially going offshore to a foreign manufacturer. These dollars are essentially dead in terms of stimulating the US economy.If the same consumer were to take the same $100 and spend it locally on a personal service such as auto repair, beauty or spa treatments, health club, entertainment, restaurants, US travel and tourism, home improvement, education or healthcare services that $100 will circulate locally doing more to stimulate the economy. In fact more than $90 of the $100 will stay in the US economy. This is an oversimplification but it seems that nearly twice the amount stays in the US economy when purchasing a service using US labor rather than a consumer item manufactured offshore.According to a paper by economics professors Broda/Parker August 2008, the 2008 economic stimulus program was successful in increasing general consumer sales. Nearly half of the stimulus went towards routine retail consumer goods. From which we can conclude that a little less than half of that went offshore as the cost of goods, so about 20 to 25 percent of the stimulus package likely went to stimulate the economies of other countries.As the new administration considers another stimulus package it seems we should consider how consumers can be encouraged to spend their windfall on personal services that will in turn create more stimulus as the dollars circulate within our economy. It seems to me the death of the dollar occurs when that dollar goes offshore as very little comes back in the form of payment for US exports.It is time for a paradigm shift that stops giving incentives to big retailers who pay low wages and whose costs of goods largely go outside the US. Advertisers have trained the American consumer to believe that buying a lot of things, most of which are of poor quality and of little value will improve their life. We need a similar initiative to convince the consumer that purchasing services that enhance their physical well being, stimulates their mind and improves their environment is the fashionable and more desirous way to spend discretionary income.This is not a plea for isolationism or an end to consumer goods. The global economy is a reality here to stay. Most services have a product component so the need for manufactured products will continue. The proposed shift is toward “service” as the focus and not “product” as the focus of the purchase. For example, most of us have a computer, what we need is not a new computer but someone to help us maintain, and get more enjoyment and productivity from the one we have. This is true of many of our “life enhancements”. We have been sold on the idea that the next one will be better. We are on to the next thing before we have fully explored the possibilities of our last purchase.How can the government encourage spending in the service sector? Here are a few ideas.Encourage consumers to make home improvements that promote positive environmental changes with labor components that are more than 50% of the cost.Encourage preventative healthcare and exercise that can stimulate service sector spending while improving health.Support services for the growing population of seniors that enhances quality of life and promotes health and well being.Encourage auto repairs and maintenance that enhance fuel efficiency and/or reduces carbon output.Promote US travel and tourism.Promote arts and entertainment.Encourage education, vocational training and avocation learning.Encourage new home construction.Encourage public transportation and support innovative transportation ideas.Support small service businesses that create jobs and stimulate local economies.These ideas can be accomplished through tax incentives, rebates, vouchers and grants. It is important that the incentives be significant and be implemented quickly. The government has a precedent for using tax dollars and incentives to encourage people to make “good” choices. This is a better and more focused approach that will bring more desirable results then simply giving citizens a check and telling them to shop. Why not use the same dollars to encourage spending with a more focused and long term goal in mind?

Growing Your Business Through Customer Service |

If you are making an attempt to grow your business or organization, there are a number of different facets of the process that you must address. One of the few aspects many businesses fall short in meeting is customer relations. When it comes to growing and establishing your business, there is nothing more important than the customer. Every employee and representative, including yourself, must understand the important of customer service and how it can easily make or break your business.Customer service management training is an essential step in coordinating your interactions with your customers and others you do business with. With the way markets are today, it is almost impossible for a new company to operate without providing proper service to the consumer. Not only do you have to focus on person-to-person interactions, but with the advancement in technology, everything from emailing, to automated phone services must be presented perfectly.With so many competitors in various industries, one thing that you need to understand is that it is a consumer’s market out there. There are a number of options at the hands of consumers, and they will use them if you cannot provide them with the service they are looking for. This is why it is imperative that you focus on building relationships and maintaining those relationships by all means. The truth is, that with so many competitors out there, loyalty by the consumer is much more frail. By provide proper service and build a strong bond, that loyalty will strengthen. This is critical and should be a key point in your business strategy.Understanding the different ways technology has changed customer service is very important. Technology has changed the way business is done with the consumer altogether. Technology has made customer relations much more impersonal. Face-to-face interaction is not as popular as it once was. Now more and more supermarkets have self service machines as opposed to cashiers. Customers are now much more likely to speak entirely to an automated system when calling a business.Your company’s website is likely the first place a consumer will visit to find information about what you do. This is why it is important to have these services operating as perfectly as possible. Believe it or not, these systems play a part in customer service as well. When a customer visits your site, they want it to be as intuitive as possible. No customer wants to deal with an overly complicated automated checkout machine when they are trying to pay for their groceries. If your website is confusing, or customers have a difficult time communicating with your automated phone system, this will likely draw them farther away from doing business with you in the future.Building a business takes a lot of hard work and dedication. It also takes building relationships with clients and getting repeat business from it. If you focus on customer service, along with the other aspects of your business, you will have a better chance at succeeding.