The importance of purpose in research: Always start with a WHY!

1 comment Edit

Research is more difficult that it seems. It needs strong methodology and a solid mathematical knowledge. In my personal opinion, the most important aspect (and where most of marketers fail) is the main question that triggers all the research, the main WHY. Within the following article, we will try to focus in this important question in order show some ways on how to accomplish a healthy market resarch study.

By fail I don’t say that marketers don’t take this question into account, I just state that they don’t put enough time and effort on it. Within the following article I will go through some basics of research and some categories that will help the researcher to classify their problems/questions and which will trigger the different ways and methods that are commonly use to get to the famous ‘insights’. 

Always start with a WHY.

To begin every single research I always try to figure out what I am expecting of it. In other words, how would I use the results. For example, it is very different a research to solve some pricing issues that product development issues. It important to understand what we want to do before jumping into the methods of doing research. This is what is called ‘diagnostic’. There are lots of types of definitions, but I always go for simplicity so this is one once I was given within some research course

Type I: Exploratory Research

This type of research is important in order to solve managerial questions that are not very well defined. Usually are given by hunches or vague insights. They often provide the context and data for further investigation. Some question we often solve are:
  • Why are sales increasing/declining/flat? 
  • What people think of our product?
  • Do users understand our value proposal?
Some examples of Exploratory Research are Focus Groups, Internet Communities, among others.

Type II: Descriptive Research

Secondly, the descriptive type of research is recommended to understand defined problems in which we need to expand our knowledge. 
For example we may need to understand: 

  • Who are our consumers?
  • How to aggregate them?
  • How much they like our products?
  • How much better are we than a certain product of the competitors?
  • What is our Share of wallet?
  • What is our NPS?
This can be done by active data collection or passive observing behavior. The first group is based on surveys (for example with Qualtrix or Surveymonkey) and the second mainly scanner data (for example of Nielsen or Ipsos), mobile data or media planning such as radio, tv or social media.

Type III: Causal Research

Finally, the Causal Research is based primary in testing the problems in order to get to the answer of the WHY.

For example, we may want to address some of the following problems:
  • How would I increase my website conversion rate if change the order of two elements?
  • What if I offer some discount based on the location of the user? What about the segment of the user?
  • Which promotion is more efficient?
  • Are our price discounts increasing the consumers’ average ticket?  
  • Which is the best way to monetize my app?
Some important fact we need to understand Causal Research. In order to simplify we can name the following:
  • Correlation: relationship between two variables.
  • Causation: one variable producing an effect in another variable.
  • Correlation is different from Causation.
To sum up, we must follow some important rules for this type of research in order to assume causation of X and Y:
  1. Correlation: Evidence of association between X and Y
  2. Temporal antecedence: X must occur before Y
  3. No third factor driving both: Control of other possible factors
Most of this type is solved by testing. The most famous test is the A/B Test because its simplicity and actionable results. Lots of companies can help marketers to do it, in order to name some you can refer to Google, Optimezely or in case of mobile data set Leanimplum or Mixpanel.

As always, we really hope you enjoy our article. Thanks for taking the time to read!

Research Tip: How to easily spot "Real effect" of variable changes vs "Mix changing effect"

1 comment Edit


In the following article, we will be reviewing some techniques to analyze and present data. These are very suitable for explaining compound metrics when the mix of single elements is taken into account. Especially, when those are defined by a weighted average using the Share of Market to ponderate.

How to compound metrics based on Share of Market?

In order to compound metrics that reflects better the effect of the single elements, we could use the weighted average instead of the simple average. For example, if we want to calculate Purchase Intention for The Coca Cola Company (as manufacturer), initially we have two possibilities:
In the simple average calculation, we don't take into account the weight of single brands and we bias the entire metric. If we take into account some weight, the metric will be healthier in terms of reflecting the reality. It is not mandatory to use the Share of Market, but we will use it just as an example since the idea is to show how to separete this effect when measuring changes of variables within different periods.
With "Fi" being the value of the Purchase Intention for the "i" brand itself, and "Si" the correspondent amount of Sales from the period.
For more information about the Weighted Average, please refer to the following link

How changes in Mix can impact on variables variations?

As observed in the following example, the average can change due to variations in the mix of Sales (weighting variable)
The increase of sales of Coca Cola boost the metric since this is the brand with the best Purchase Intention. This is a bit tricky since there is not any change of each of the brand from the company. As conclusion, if we are not careful this can lead us to think that Coca Cola Company is increasing it Purchase Intention,

How to separate the change of the variable from the effect from mix?

After the previous introduction, we now are ready to dive in the main paragraph of the article. The idea is to spot the real effect. By real, I mean the pure effect (or so) of the variable, separating and measuring the mix effect. In order to do that, we need to order the spreadsheet in the following way:

To fill the grey shaded cells we use the following formulas:


To complete the example, here are some possible insights and conclusions about the methodology (not on the data, remember it is fake data).

  • In order to check the variation, both must sum up the same
  • The same analysis of brands/manufacturer can be done with manufacturers/market
  • The 0% of mix effect does means that this brand has evolved in the same rate than the market


As always, we really hope you enjoy our article. Thanks for taking the time to read!

Internal Dialogue: How Unconscious Mind talks with our Conscious.

4 comments Edit
Did you know that most of our talking is with ourselves? Did you know the importance as marketers of targeting consumer’s unconscious mind?

In this post I am going to review in a much more comprehensive and practical way some ideas of unconscious marketing from Guerrilla Marketing – Jay Conrad Levinson.

Unconscious Mind (UM) vs Conscious Mind (CM)

According to this author, our behavior is divided into Conscious and Unconscious Decision Making Processes. The UM is in charge of so much more information and decisions than the CM. When the CM can process at the most four or five things the UM can analyze and process millions of situations and decisions. The most common situation is the UM not telling the CM all the outputs of his decisions in order to avoid an overload of the CM. Imagine that it would be impossible to live if you have to pay attention to breath, to blink, to salivate or even to beat your heart.  
But don’t think that our Conscious Mind is unnecessary or even stupid because in most cases (not every case) CM override the UM decisions.  
But we are not here to talk of every system in separated. We must understand how they connect. The main idea is what Jay calls the Internal Dialogue. This is how our UM tries to talk to the CM. I mean, all the times we make our Unconscious Value Equation, when we analyze common situations, or even when we have the famous ‘hunch’ or “Gut Feeling”.

UM is in charge of the Internal Dialogue

The voices we hear in our head are totally normal, and do not mean we have schizophrenia.  This is how our brain thinks, this is how it works. This voices or internal dialogue is so normal that is probably that you can hear it while you are reading this post. It happened because language is actually verbal, and the writing is only the representation of a word.
The main idea I want to send is the importance of generating this internal dialogue. This mechanism is a very big opportunity for marketers because its influence in the decision-making process. Taking your prospect into a positive state will affect their purchase decisions in a good way. And you should use language in your favor to make that possible. For example instead of advertising “Without a security alarm, your family is at a risk”, you should say, “Sleep soundly in the safe knowledge that you have protected your home and family”.  Being in a positive state help to avoid buyer’s remorse, and increase repurchasing behavior. Buyer’s remorse is other way of Internal Talking that results of the contradiction between the UM and the CM in the purchase decision. Often we decide to buy stuff that we know we don’t need but we consciously decide to do it anyway.

Internal Dialogue to generate Trust

Other big use of Internal Dialogue in marketing is that it gives better results in gaining consumer’s trust.  It is much more efficient to let the consumer’s brain get or come out with the conclusion we want to state than sending the direct message. The main difference is the trust that we have to our brain vs the trust we have to the message transmitter. It could take weeks or month of efforts to become trustable to the consumer’s brain. But if we communicate “unconscious clues” to the consumer’s brain so it reveals the same message by its own, it is going to be much more comfortable and confident with the marketing message and it will probably turn into more committed decisions.

Timing in Decisions

The author explains that the UM works in a faster way than the CM, and of course with a quicker response. The importance comes from the knowledge that is possible for marketers to make prospects take decisions before they are consciously aware that the decision has been made. This is actually the result of “marketing to the unconscious mind”.

Also UM can take decisions without consulting the CM, and gives the marketer a window to work on.

To completely understand the timing in UM vs CM, the author include a real story about a Fireman Officer:

"A researcher tells the story of a firefighter in Cleveland who answered a routine call with his men. It was in the back of a one-and-a-half story house in a residential neighborhood in the kitchen.
The firefighters broke down the door, laid down their hose, and began dousing the fire with water. It should have abated, but it didn’t. As the fire lieutenant recalls, he suddenly thought to himself, “There’s something wrong here,” and he immediately ordered his men out.
Moments after they fled, the floor they had been standing on collapsed. The fire had been in the basement, not the kitchen as it appeared. When asked how he knew to get out, he could not explain it at all.
It took well over two hours of questioning for the fire lieutenant to piece together how he knew to get out. (First, the fire didn’t respond as it was supposed to; second, the fire was abnormally hot; third, it was quiet when it should have been noisier given the heat.)"

In this case, the smarter UM analyze tons of experiences of the lieutenant in just seconds to reach to the conclusion that there was a danger.

As a global conclusion we can say that the importance of UM exceeds marketing purposes but of course we could and should use them and take advantage to grow our businesses.

Why our brain love curves?

Edit

What do you think about this car?



It is often said that curvilinear shapes are more appeal to human being. It is based in some belief that we associate sharpness with danger and we get in a warning state, or also because we are surrounded with nature and all the curves within it makes us feel more comfortable in round spaces. Today we are going to analyze those beliefs and try to get them down-to-earth.

 We are going to review the work of Vartanian (2013) about the impact in the brain when visualizing curves. It is actually well believed that curvature elicits pleasant emotions, but it is very difficult to measure.

 To reach our goal, Vartanian ran some investigation using fMRI to understand what is happening in our brain in terms of activations when we are exposed to these types of curves and lines represented in the stimuli (in this case as architectural pictures).

From a strictly behavioral perspective, the first insight of the investigation is that the amount of curves was highly correlated with the beauty rating. 


Then the study consisted of presenting participants in a functional MRI (fMRI) scanner with photographs of interior spaces that varied in contour.

Neuroanatomically, the results demonstrated that judging the beauty of curvilinear spaces was associated exclusively with an increase in ACC activity over and above judging the beauty of rectilinear spaces. ACC is part of Brown et al.’s core circuit for aesthetic processing (Brown 2011 - Naturalizing aesthetics: Brain areas for aesthetic appraisal across sensory modalities), and its activation here is consistent with the wealth of behavioral data that point to the involvement of emotion and reward in preference for curved objects.

For the beauty judgment run, the contrast of curvilinear-rectilinear spaces revealed significant activation in ACC exclusively (Z = 3.54, x = –6, y = 42, z = –6, k = 11).



Conclusion

Beauty and curvilinear contour activated certain regions (ACC) that are strongly responsive to the reward properties and emotional salience of objects. So take that in mind when you are designing stuff for your business (from logos, products to even websites) to help yourself from a pure neuroscientifically point of view to improve the impact in your consumer.

Full article and bibliography in http://www.pnas.org/content/110/Supplement_2/10446.full.pdf


As always, thanks for taking the time to read, any comment will be well received.

Does multitasking make us happy?

Edit
What makes you feel better, go running, meet friends, prepare nice dinner, finish your work and watch a movie, or just only focus in one activity, such as meeting your friends?

What give us more happiness, the joy of doing lots of things, or the satisfaction of doing only one but more accurate and in a better way?


The investigations from Jordan Etkin, Cassie Mogilner (2015) reached to the conclusion that  it depends on the amount of time we have to perform the activities we do enjoy more doing high variety of tasks or just focus in one activity. The measure of happiness was based on two questions: How happy do you feel right now? And how satisfied do you feel right now?

Shorter the time is, we prefer focus. Longer the time is, it gets all about diversity in the tasks.




So as we can see in the graphic, the threshold is in 1-hour-duration activities. So according to this investigation, if we have less than one hour, focusing in fewer tasks will give us more satisfaction. But in the other hand, more than 1 hour may be marginally you got more satisfaction by solving high variety of tasks.

It is all about the sensation of productivity.  More accomplished tasks in the same period of time makes people feel they are taking advantage of time. But nothing is free in life (isn’t it?), changing activities results in energy and cognitive resources spending. So people stress and loss productivity by switching their tasks. As conclusion, shorter periods just do not put up for the cost of changing so it is more efficient to focus in fewer tasks.

All of these insights are very important when it comes to organize the schedule. “Although repetition can make workers more productive in the short-term, the lack of stimulation eventually detracts from their happiness. So within an hour, tasks should be kept consistent to increase productivity, but across days, tasks should be varied to maintain stimulation and interest.”


So be careful, organize yourself and be happier!!

References:

Daniel Kahneman´s systems on decision making

Edit
Today we are going to discuss some important tools when it comes to analyzing human behaviors. We intend to state practical and clear examples that could be useful in everyday life. Although it has neuroscientific explanations we are not going to make use of them for the sake of the post.

TWO SYSTEMS

Let’s start with two experiments. First take a glance at the next image:


Here we can see how our automatic mode is activated and working. We can make some very accurate predictions on the image. The most important is that the man is angry. He is probably yelling to someone in the cellphone. Probably the language that he is using is not very polite. This comes to our mind automatically. And those involuntary responses, predictions, decisions is what Kahneman define as System 1.


Now let’s take another task, try to solve the next multiplication:


Here we can see how the other system works. The answer, although you can get it, won’t come directly to your mind. In order to get the exact result you need to make some effort and attention. This type of thinking is slow, and infer a sequence of steps.

SOME DEFINITIONS

This terms were originally proposed by the psychologists Keith Stanovich and Richard West, and will refer to two systems in the mind, System 1 and System 2.

INTERACTIONS BETWEEN SYSTEMS.

Both systems are active in normal conditions but each one tend to be more efficient in different situations. For example imagine that you are angry and want to yell someone that is annoying you, but it turns out to be your boss, what would the systems do?
System 1 is automatic, respond to emotions and works in an involuntary fast way, so it will yell but as the System 2 is aware of the possible consequences of yelling, so it takes control and stops you from making the very big mistake (here we are not judging the situation, in some occasions the correct thing to do is to yell, but this is a simple example). To do it, Systems 2 requires efforts and concentration.
Another simpler example could be the situation when you hear a powerful sound, it probably that unconsciously you turn around, and in order not to, you should make a conscious effort.
The same when you go to a restaurant an there is an exotic couple in the next table and you try to avoid staring.

THE LOW EFFORT RULE

As we said in the previous paragraph, each system is  more accurate in certain situations. Kahneman propose a rule of choice: our brain will follow the lowest effort way.
Daniel Kahneman investigated the use of mental energy that involved both process (Systems 1 and 2). He reached to the conclusion that System 2 requires much more energy and effort. That could explain why when is possible our brain chose the System 1 as it works in a faster, effortless way, and usually predict very accurate in easy situations. But not always it is the best choice, and as we saw in the previous examples when it was necessary, it tells System 2 to take charge in the decision making.


I hope you like this approach to Kahneman’s Systems and hope these one become new tools that help you analyze people behavior.

Why is so important to remember?

Edit
Remembering is essential for our living. Can you imagine having to learn to walk every single day? 
Can you picture yourself forgetting where the bathroom at your place is every time you woke up?

 There is still so much to learn in this field but we are going to describe some approaches and important facts on Memory and Learning for business and marketers.

 Just to introduce you with a smile into the memory issues, some funny facts of 50 First Dates,

Types of memory

In order to start this post I wouold like to show a brief chart that include the different types of the memories and the duration of them.


Within the Long-term memory we can find a very important distinction:

  • Declarative: is in charge of remembering facts or events.
  • Non-Declarative: works in a deeper awareness level. It is retrieved without conscious or control. For example: riding a bike or reading this post.


The most important conclusion I want to take from the previous distinction is the importance of the non-conscious memory. It drives almost all our behavior, and altought it is still a lot to learn, most researchers are working on it. Because once we can understand what people really like, (in this case, related to memory, as we will see in the next paragraph in the Coca-Cola vs Pepsi Experiment) we will be able to deliver it rising the value for the consumer and embracing our brands above the competition.

How to measure in a pretty simple way?

We can ask people how they remember a brand or even how they believe they know it.

  • TOM: Top Of Mind, it ranks the brands in the order from the most known to the least. There are lots of variants in this method, but essentially they answer the question, “do you know this brand?"
  • Subjective Knowledge: This measure allows the researcher or marketer to understand how the consumer believes to understand or know the brand.
  • Association: It approaches to the question, “Do you feel our brand to be Positive or Negative?”

NeuroMarketing approach using fMRI

There is an interesting research provided by Sam McCloy on how memory and past experience affects preference.

Coca-Cola vs Pepsi Experiment

The experiment consist in two parts. First a blind test and then another one where the consumer know the brand he is drinking.
Blind test had no strong results (besides people often think they can differentiate Coca-Cola and Pepsi), but when people knew they were drinking Coca-Cola most of them actually prefered it.

 As we can see, there is change on preference just by knowing what are we drinking, and according to the study it is related to the remembering of past experience where having a Coke was more rewarding (thank you very much for messing with my mind Coca-Cola Marketing Team… ).

To state all this Neuromarketing hipothesis, we can see in the fMRI results the difference between the blind test and the Coca-Cola test.

The main conclusions were that during the blind test people feel more appealing the Pepsi due to the activation in the Ventromedial Prefrontal Cortex, that is actually a “reward center” area.
But when the consumer knew what he was drinking, the activation area change. Only when the consumer drink Coke, the scan showed strong activation in the Hippocampus and in the DLPF which are "center for memory and emotions". So besides people actually liked Pepsi, they were more inclined to chose Coke based on the memory of past experience and emotional connections.

As always, thanks for taking the time to read.
Hope you enjoy!


Bibliography:

Neural Correlates of Behavioral Preference for Culturally Familiar Drinks, Sam McClure(2004)
An Introduction to Consumer Neuroscience & Neuromarketing, Thomas Zoega Ramsoy(2014)