BrainTrust Query: Numbers and Stories

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Dec 14, 2009
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Commentary by Devangshu Dutta, Chief Executive, Third Eyesight

Through a special arrangement, presented here for
discussion is a summary of a current article from Third Eyesight’s blog.

Despite the wealth of information available today, far too many bad business
decisions are being made in the absence of good information, either because
the executives have not bothered to carry out research, or have not had the
capability or the time to question the research which is being presented to
them.

Worse – perhaps because of the abundant data and the ease of access to it
– today many business decisions that turn bad are taken on the basis of information
that is presented by someone else (“secondary research” in research
language), without questioning the validity of the conclusions, the structure
of the study, the context in which the data was analyzed. It’s almost as if
we couldn’t be bothered to think, because someone has apparently already done
the thinking for us – especially if it comes from a “reputable source.”

Sometimes the problem lies in the perception of research as an impenetrable
jungle in which it is easy to get lost but difficult to find something immediately
useful. Researchers, like all other vocations, have their own jargon which
they sometimes use to identify their own kind, and perhaps sometimes to exclude
people who are not from the trade. Very often this jungle is created by “research-as-a-foreign-language”,
which many executives are just too apprehensive or too busy to tackle.

Also, research (especially the number-oriented kind) seems too dry for most
people to take in. And I think that is one place market researchers could
do themselves a huge benefit if they could tell the story – especially a story
with a moral at the end. That is, create the picture for the user as to what
all of that information means in simple language, and also show the user how
to use the information in the context of his situation or problem. Bedtime
stories during childhood and good movies in adulthood work well because there
is a coherent narrative, a start, a middle that is interesting and an ending
that stays in the mind. You can see the relationships between the characters,
and the consequences of those relationships. A good research project report
could be seen as something very similar.

Having said that, of course, there are also some researchers that go far
beyond, who would never let boring facts get in the way of a good story. How
many stores can you think of which are located at sites where their chances
of success are exactly the same as that of a snowball in hell? How many products
or brand launches come to mind, where you wondered, “what is this company
thinking?!” Of course, there would have been pre-launch studies which
would have shown just how successful these would be, where the stories were
possibly based more on imagination than on facts.

For a decision-maker, the only way to tell the difference between bad statistics
and the true story of the market is to make sure that he or she is equipped
with multiple sources of information, and various tools with which to analyze
them.

Numbers (quantitative research) and narrative (qualitative research) can
tell us many wonderful stories about the market. Some of those stories are
highly imaginative “fairy tales” because of a bad study – that shouldn’t
lead us to ignore all the others which can direct us to our objectives.

Discussion Questions: Do you find many corporations take a narrow view of
research? What are the hurdles preventing decision-makers from fully utilizing
all available research? In what ways can research providers improve on the
ways they communicate their findings?

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18 Comments on "BrainTrust Query: Numbers and Stories"


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Dr. Stephen Needel
Guest
11 years 4 months ago

This sounds a lot like a chapter we wrote for ESOMAR’s Best Practices book. We have devalued research in favor of insights, which can rely much more on a good narrative and much less on good data. A management team that expects insights from research all the time is asking for trouble down the road. A research team that doesn’t focus on quality first and insights second is doomed to failure when management makes the wrong moves.

Research needs to give management the best information possible in a way that management can understand it. Management needs to understand that research is providing the best information it can within budget constraints. The two need to work together.

David Biernbaum
Guest
11 years 4 months ago

One of the concerns I have at present is how SKU rationalization research is viewed, so quickly judged, and acted upon. Many retailers are looking only through a narrow interpretation based on shear numbers and not taking into consideration other more visionary factors about specialty brands, niche items, and growth brands. If this keeps up, consumers will have very few choices and most of the stores will all look the same with exact assortments. Only price will differentiate one from the other. The results will be rather ironic.

Jonathan Marek
Guest
11 years 4 months ago
I agree that there is a lot of bad “research” out there in the world. Any analytical study has to be right, applicable, and actionable. If a study doesn’t meet these criteria, it is worse than useless–it can actually pollute the minds of decision makers by letting them think they know something they don’t. Before spending any valuable share of mind on numbers, executives should ensure:1) Is it right? If I only had a buck for every time I’ve seen a big name consulting firm presentation with numerical “findings” using a flawed methodology or with no statistical significance…. I’d be retired in Paris right now.2) Is it applicable? So, some other retailer says their TV spend has a 150% return (or some consultant claims that). So what? Your business is different. Consumers react differently to every retail concept. You do need to know for you.3) Is it actionable? Oh, we all know about the study designed to validate the CEOs hunch. Want to guess what the consultant’s findings will say? If you are going to… Read more »
Mark Price
Guest
Mark Price
11 years 4 months ago
It is absolutely true that marketers do not often take the time to understand the basis of the research that they are presented with. Understanding how the research is developed and the analysis approach used to develop recommendations is an important, if misunderstood, part of the job description for a data-driven marketer. I do find, however, that marketers more often do not carry out sufficient research to draw conclusions, even when that research is relatively easy and low-cost to execute. If you have access to email addresses, you can execute basic research surveys to customers and gain valuable insights in less than a week, at a very low cost. Those opportunities to “fill in the gaps” are often overlooked. Sometimes those insights can make the difference between success and an indifferent failure of a key initiative. Marketers must understand the opportunities that research affords them, even when timelines are tight. Obtaining the Voice of the Customer, particularly the Best Customer, is a practice that should be followed religiously. Only then will marketers be able to… Read more »
David Livingston
Guest
11 years 4 months ago
We have to keep in mind that corporations are run by human beings that often make decisions on emotion rather than logic. I have many clients who have been very successful making decisions by shooting from the hip, yet they always prefer to see my research, just to be sure. Most of my clients are very bright people and my research generally confirms their own instinctive thoughts. There have been times when I have been brought in to do an autopsy on a project to find out why a store failed. Typical reasons are: Researchers did not want to offend management so they candy-coated the results. Key decision makers are suffering from some kind of physical or emotional impairment which affects their ability. Corrupt middle managers that change the research results. Researchers leaving out a key piece of data (i.e. not telling management that the Mexican format store they have planned is in a Puerto Rican neighborhood). Overall, I don’t think retailers have a narrow view of research. Researchers can do a better job in… Read more »
Paula Rosenblum
Guest
11 years 4 months ago
I think there are two elements at play here: First and perhaps foremost, retail is an emotional business. We can have reams of data and still use the words “It feels like….” and make significant decisions based on those gut feel moments. Certainly this has long been true in the world of merchandising. Something “feels like” it’s going to be a home run or a dog, and it “feels like” we’d better take a markdown or run a promotion to goose traffic. And actions are taken accordingly. Now, can I tell a retailer in all honesty to ignore those gut feels? I really can’t. I can encourage them to use data to support actions taken based on those feelings and obviously that’s what I do…every day. But I can’t ask them to ignore their gut completely. This brings me to the second issue: we don’t always present data in an easily distilled and understandable format. Our retail survey respondents repeatedly ask to have their Business Intelligence delivered in simpler ways. While “red light, yellow light,… Read more »
Raymond D. Jones
Guest
Raymond D. Jones
11 years 4 months ago

Decisions are always made without perfect information to support them. But sometimes, decisions are made that ignore the available information or decline the implications.

Research is clearly most valuable when it can be turned into actionable recommendations. We are all too aware that research can be used as a fishing expedition without a clear objective. However, there is also a danger in using research designed just to prove a point rather than develop real, new learning.

On balance, I believe that research, properly done, interpreted, and acted upon, can vastly improve the decision making process.

Christopher P. Ramey
Guest
11 years 4 months ago
I’m reminded of the Samuel Taylor Coleridge quote “Water, water, everywhere, nor any drop to drink.” Research/knowledge is the raison d’ tre for The Luxury Marketing Council http://www.floridaluxurycouncil.com; it’s what I do. The highest level executives or those who will someday sit in the corner office recognize the value of research. They’re able to sift through the myriad of information to find what’s relevant and actionable. There are a couple trends re: research. Some executives don’t want facts to get in the way of their vision. Historically, these individuals’ careers stall. Also, there are many companies that have pared down their employees to the point that executives don’t have time for the facts–they’re too busy keeping the ball moving. The third group often doesn’t understand how to read the research, how it affects them and/or how they can use it for their benefit. Relevant research is an imperative for retailers. Having a 360 on your targeted customer and understanding their collective experiences is the key to personal and business success.
Joan Treistman
Guest
11 years 4 months ago
Devangshu Dutta mentions many of my personal concerns regarding research. But before I go any further I have to add, my name is Joan and I am a researcher. I’ve spent many years working in the industry to help alleviate some of the barriers Mr. Dutta listed. There is still much to be done of course. In this world of easy access to numbers/statistics, upper management demands and gets “stuff” by which they make decisions. Trying to explain the difference between good research and everything else often falls on deaf ears. Management expects those who supply the data, whether they are staff or outside consultants, to bring the quality, validity and relevance required. And in turn they do not question the underlying premise of what they are buying, or what they are buying into. And when forecasts don’t work out as expected, new products fail and marketing strategies are ineffective, it’s all about how research failed to deliver. Researchers preach to the choir when they have meetings about quality standards. CASRO (Council of American Survey… Read more »
John Boccuzzi, Jr.
Guest
John Boccuzzi, Jr.
11 years 4 months ago

During my 11 years with Kenosia I used a phrase with clients “One truth.” By combining disparate data sources, a retailer or a brand manager can get to the “one truth” and then make a business decision regarding direction. Far too often, decisions are made using one source of data which can lead to less than effective results.

Example, if a retailer only views their loyalty data to make business decisions about advertising, are they understanding all the trends happening in their market? Probably not. Combining their loyalty data with demographic data makes it better and adding additional information from a syndicated data provider makes it even better yet.

The great news is, there are a dozen technology solutions to help both retailers and brand managers combine data and the data to combine is available and affordable. It boils down to first understanding the questions and then going out and combining all the best data sets to create the answers.

Phil Rubin
Guest
11 years 4 months ago
The use and misuse of research, data and “insights” varies widely across retailers and brands. Typically, the larger the company, the more primary research they have and the more reliant on primary research they are. Unfortunately, great research and insights are, as many here are illustrating above, not nearly as commonplace as they should be. There are many reasons for this:– Flawed and biased methodologies (e.g., let’s “Focus Group” this”);– Vendors who specialize in one research/data collection area over another;– The research goals and objectives themselves: pure answers to hard marketing questions rarely come directly from research but rather from what is done with it, i.e., what is the data needed to create information to support or disallow a hypothesis? Budgets, which have mostly seen cuts for the past two years; though the cost of collecting data has come way down in many cases. All these challenges with research underscore the importance of knowing who your customers are, having an ongoing dialogue and relationship with them, and gleaning insights from them. There is nothing better… Read more »
Bill Bittner
Guest
Bill Bittner
11 years 4 months ago

One simple question expresses the confusion around statistics: “Why do we have Democratic and Republican Pollsters?” I think it was Harry Truman who when confronted by economists telling him “Well on one hand the statistics are saying this, but on the other they could mean this” said “Someone get me a one armed economist.”

The thing with retail is that we don’t need answers to thousands of different questions. We ask the same questions a thousand times: how does this product sell, what is its net profit, how important is it to my customers, does it fit my brand objective, how does it relate to other products, are there viable substitutes, etc? Instead of poring over tons of numbers, the POS data should be used to construct answers to questions.

So the fundamental reason retailers (and anyone, really) make bad decisions from raw data is because they don’t know what questions they’re trying to answer. Start there.

Pradip V. Mehta, P.E.
Guest
Pradip V. Mehta, P.E.
11 years 4 months ago

The fact that information is available and is being used effectively are two separate things! Usually a company uses too much information, regardless of correct or incorrect, or it does not use information. Very few companies strike and maintain a balance between insight, gut feeling/intuition and relevant, timely information in decision making.

Lee Peterson
Guest
11 years 4 months ago
I’ve found that the overall views of research within companies goes in cycles. Of course, leadership changes come into play with the research points of view as well. Some executives understand how to use it better. Some have used it so much they can go by gut. In any case, a research cycle may start when a huge mistake is made by using strictly gut instinct (Tropicana?), then more and more insights will come from research and less from gut until, one day, it is determined that there is too much science and not enough art, and the cycle starts all over again. I do believe though, that research is one of the faults with our nation’s fashion business today. Too much science, not enough art. The talent and guts it takes to take a big chance on new, fun fashion seems to have been relegated to trend reports, focus groups, ethnography and best seller lists. The rare exception to that rule is Forever21…instincts still survive there. Perhaps they can teach the industry a lesson.
Steve Weiss
Guest
Steve Weiss
11 years 4 months ago

Where would Disney be without fairy tales?

Herb Sorensen
Guest
11 years 4 months ago
The problem, dear Brutus, is in ourselves. Retailers and brands have created vast action machines with thought paradigms behind. Anyone doing research is likely to be looking to fit information into the existing machine. And for each individual, when they formulate a research query, they bring their own current thinking into it–obviously! This means that the results they get back reflect, in far too great a way, their own predispositions. This, coupled with the fact that lots of research is “ask” type research–interviews–guarantees a sluggish and distorted view of reality, what I call the Picasso business view; shared distortions, unperceived as such by both researchers and respondents. The partial antidote to this is “observational” type research, and the hierarchy of truth. And observation here must be of the real world, not some laboratory simulation, which typically just further cements the existing distorted paradigm. The hierarchy of truth means distinguishing between what is most rock solid and least likely to be distorted, and that which may be as changeable as the weather. (That’s right, Maude. It… Read more »
Ralph Jacobson
Guest
11 years 4 months ago

There are plenty of great tools to make sense of all of the information. The challenge is balancing it with the human side. Take, for example, the stores. Are all corporate employees required to walk the stores and report what they see? View the stores in the evening when store management has left for the day. These age-old problems are still far too common, yet they are the source of some of the most valuable information available anywhere. Sales will be increased, labor decreased and earnings improved if this information is acted upon.

Alison Chaltas
Guest
Alison Chaltas
11 years 4 months ago

Corporations take broad views of research. There are many reasons why research is not being carried out or questioned. Both front end and back end issues plague research. Front end issues revolve around the design.

Interscope supports the axiom that 90% of a good research project is in the design. Two key areas of the design process revolve around gaining a solid understanding of the business objective and establishing key learning objectives. Back end issues revolve around communication of the learning. Poor research communication hinders the activation of insights. Research communication is vastly improved when the end goals of the research are incorporated into the design.

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