Thursday, December 20, 2012

Using Social Input for Marketing Decisions

Should likes result in price cuts?

The impact of social media on commerce may be in consumer feedback rather than direct commerce.   A recent article in the Chicago Tribune outlined a number of retailers - large and small - using the communal media as a way to inform their decisions.  From what colors to stock to what prices to charge social networks provide a means for either conducting market research or letting consumers decide.

The use of natural communities for research is by no means new - but the quick ask and answer paradigm of social media does raise some questions to consider.   If we give consumers such a visible role in the process, then as a business...
  • Do we care what the decision is?   
    • Colors, assortments, and other merchandising decisions are good places to test the waters.
  • Can we deliver? 
    • In essence, asking for opinions is on the path to building trust and that outcome should not be put at risk.
  • Can we afford to be wrong?
    • Certain topics, e.g. pricing and new product development, may result in unintended consequences that impact other parts of the organization.  
Strictly speaking, market research is a tool used to confirm or reject a hypothesis so there are some limitations to consider.
  • Selection and sample bias -- no one ever said those who participate and respond are 'representative consumers'.  Can the results be applied broadly or into the future?
  • Classification and segmentation - verification of the interests and demographics used to analyze the results is tough when at a click of a button I can change, include or exclude things.  There is truth to adage - 'on the Internet, no one knows you're a dog.'
That said, there are clearly innovative market research, data collection and analysis opportunities to explore.  This area is important for marketing since it is the data of self-expression that holds the keys to context and intent and thus purchases. A few examples..
  • ChatThreads combines a bit of market research methodology, technology and social behavior to track where and how a recruited panel of consumers interacts with a brand.
  • ThinkVine creates a virtual world of consumers by building personae from all types of data in order to understand how the online and offline mix of marketing spend impacts sales.
  • itracks focuses on mobile focus groups so they can interact in the real world instead of the conference room with one-way mirrors.
So, since there is no reason to believe these trends are simply fads it is time to rethink how we go about figuring how to learn what we need to know.  

There needs to be some amount of experimentation in the generation of insights.  Suggestion for the new year: set a budget limit to which you simply say "Yes, let's try it."

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