Is Market Research Dead in a 2.0 world? Presentation given at the Ubiquity Marketing unSummit in Austin, TX. September 3, 2009. Covers the current state of research in a customer driven web2.0 world. Contains tips and resources for entrepreneurs to leverage free and inexpensive market research techniques.

1. Ubiquity Marketing unSummit Is Market Research Dead in a 2.0 world?09.03.09

2. What we will talk about Sentient Is research dead – in a 2.0 world? Inc. article and response Why research? Ways for entrepreneurs to leverage Best practices – stuff you can leave with

3. Who We Are Sentient Services is a Knowledge Studio® - the amalgamation of market research, user experience and information design practices. We leverage these core competencies for our clients in product development, interactive, sales, marketing, advertising and branding. Sentient provides the knowledge to lead and the tools to connect with customers through research, customer innovation and technology. We work with startups and F500 clients around the globe We specialize in technology and companies that leverage technology and the internet in their products, marketing and sales Accolades as a good company to work with and for: 2008 Inc. 5000 list 2007 and 2008 Fast 50 – Named one of the fastest growing privately held companies in Central Texas 2007 and 2008 Top 15 agency in Austin, Texas by the Austin Business Journal 2007 Best Places to Work in Central Texas

4. What We Do Information design providing the right information, in the right place, at the right time. Usability services for web, software, product and creative with state-of-the-art lab. Customer insights through advanced quantitative and qualitative methodologies. Our Information Design practice provides an unparalleled scientific and customer research driven information platform Content strategy | Information architecture | Heuristic design| Interaction layers & dependencies | Wireframes Full-service worldwide quantitative and qualitative research. We cover branding, customer engagement, market analysis (segmentation, sizing, pricing), product development and usability. Focus groups | In-depth-interviews | Usability & Eye tracking | Online groups | Web-based surveys | Phone-based surveys | Custom panel development We conduct concise, measurable and actionable usability research, covering a range of different media including websites, software, email, packaging, interactive, print and television. Business definition | Contextual assessment | Heuristic evaluation | Personas | Task analysis | Usability analytics | Reporting (IA, content, wireframe)

5. What we will talk about Sentient Is research dead – in a 2.0 world? Inc. article and response Why research? Ways for entrepreneurs to leverage Best practices – stuff you can leave with

6. “The Customer Is the Company” In June of 2008 Inc. published an article about Threadless entitled “The Customer Is the Company”. MIT’s Eric von Hippel implied that their business model spelled the end of traditional market research and large R&D departments. You see, they get all their designs and input on what to sell from their customers via their website. Welcome to a web2.0 company. So, is the market research industry out of business?

7. Market Research – current state On the surface, some major shifts. Web2.0 “Threadless” effect Response rates are declining, development cycles are shortening, costs are increasing… Free survey software is out there and you can now use Facebook, LinkedIn… (all actually good resources given the right task) Just because it worked 50 years ago does not mean it works today Non-response bias, large internet samples lead to false stats… There is still a place for market sizing and large scale quant segmentation studies However, these are few and far between Biggest value in market research for emergent sectors and companies lies in developing the right product/service (usability, UI, lead user and observational design) clearly communicating emerging and technical concepts with associated value propositions … all targeted to the right person at the right time via engaging and salient media (what the other fine folks are here to talk about, so I will skip this)

8. What is changing, what is not. So, I wrote back to Inc. “You can call it crowdsourcing or customer-driven design, but what Threadless does is essentially market research. I think of Threadless's user base as one large consumer panel. Threadless's business model immediately implements the findings from this market intelligence. What traditional market research does is similar. It provides the framework, methodology, and discipline to solicit feedback from customers. The rise of Threadless does not mean the end of market research but a transformation in the way companies implement it. That's what's changing.” Knowledge by itself is not power, knowing what to do with it is. Call it what you want, but the basis of needing to understand customers and cut through questioning biases, sampling issues, analysis and then turning data into bite-sized business intelligence has not changed. Oh, and that is called market research.

11. Minimum ownership of means of production – the true knowledge economy

13. Research is important, but it costs $ Yes and yes – but here are a few ways to get around that There are many great FREE web survey tools out there (www.zoomerang.com is one of my favorite, and it has discounted non-profit pricing) And, since the best research you can do is with current customers, typically the sample costs you nothing Most research does not have to be complicated! Keep It Simple. If you don’t, you will spend more time convincing others that the analysis is correct than actually taking action on it You can easily create basic online groups or forums to get feedback using LinkedIn. Facebook, Ning and other platforms There is a ton of research already done – look at SEC filings, press releases, lobbying firms for your industry do a ton of research, local Chamber of Commerce…the list goes on

14. What will still cost you Time – if you want your research done on time, typically you will need to dedicate resources or hire an outside firm Advanced analytics – segmentation, conjoint… Nuanced survey writing – internal and external validity Professional research management (replicates, non-responses analysis, normalizing data…) In-person with facilities, one-way mirror, eye tracking Prospect survey or focus group respondents

15. What we will talk about Sentient Is research dead – in a 2.0 world? Inc. article and response Why research? Ways for entrepreneurs to leverage Best practices – stuff you can leave with

17. Understanding why you are in business

18. When to use it?

19. When you don’t know, really

20. When not to use it?

21. When you can’t do anything with the answers

22. What can you do with it?

23. Make better products, say the right thing to the right person at the right time – spend your money wiser!

24. What it is not? Why are budgets hard to get sometimes?

25. Production, sales staff, advertising…not historically tangible or integrated

26. Why spend money on market research?

28. Steps

29. Survey Writing Tone – don’t speak down, assume limited time and attention (respondents will skim), but don’t make too techy Scales – huge debate here but some general guidelines: Allow a Don’t Know/Refuse option If the survey is short anchor all points Avoid a mid-point (unless you can make a strong argument) Create positively skewed response scales Design and layout Just because the web is “easy” does not mean that design can be ignored Same basic principals that go into mail surveys apply here Eye movement (columns, scrolling, etc.) Column widths, number of pages vs. scrolling etc.

30. Fielding and Project Management Invitations and reminders Subject line is important “Need your feedback” Check for common words that will get caught by SPAM filters Have a call to action and how they benefit – “This is your chance to provide direct feedback on the products you use and to help make them better.” Timing Launch Tuesday-Thursday 10-2pm CST – for US Majority of responses will come back within 48 hours Send reminders out 3-5 business days later, no more than 2 reminders at most SPAM and customer service Stay in compliance (physical address, opt-out links, etc.) Quality control Check responses – do numbers make sense, it if looks wrong it probably is Check for response outliers and remove if needed Ensure that survey fielding period is long enough to get hard to reach respondents – replicates Non-response bias Sub-par response rate Panels vs. RDD

31. Turning Data into Insight and Action Don’t walk…. Run – don’t let the results gather dust Do share the results – don’t worry about knowledge ownership But, ensure that implications and application of the data is clear in presentation/ briefing But, don’t rush – one insignificant (there is not such thing) wrong number will call the entire study into doubt Don’t overcomplicate the data or the results Avoid weighting if at all possible If you can’t summarize the key points on one page, try and try again

32. Market Research – Core Competency Our Market Research practice helps clients take the first step in interacting with customers, building better products and communicating – LISTENING We combine our proven research principles with a depth of experience in sociology, psychology, economics, statistics and marketing. Key business areas we provide research intelligence for include: Branding Customer Engagement Market Analysis (segments, sizing, pricing) Product Development Usability Interactive Social Media

34. Observe, brainstorm, ideate

35. Develop survey content

36. Marcom testing/development

37. Understand how users interact with product, software, or website

38. Pinpoint deficient or difficult-to use areas

39. Identify ways to improve the user experience

40. Increase interaction and sales

41. Brand awareness/Brand equity

42. Market size

43. Customer profile

44. Customer experience

45. Product/Service development

47. In-person/Web/Phone interviews

48. Language analysis

49. Facial and behavioral coding

50. Observational fielding

51. Group ideation

52. Projective techniques

53. In-depth interviewing

54. Usability testing

55. Contextual inquiry

56. Eye-tracking analysis

57. Facial and behavioral coding

58. Language analysis

59. Experimental design

60. Web/Telephone surveys

61. Brand concept mapping

62. Market segmentation

63. Advanced modeling

64. Conjoint analysis

65. Text analysis

67. User Experience – Core Competency We conduct concise, measurable and actionable usability research, covering a range of different media including websites, software, email, packaging, interactive, print and television. Our User Experience group works across the board from product development to creative optimization to increase business success through user-centered design. Business Definition Contextual Assessment Heuristic Evaluation Persona Development Task Analysis Usability Analytics Reporting (IA, content, wireframe) Consulting (see Information Design section)

68. User Experience – Lab Sentient owns and operates a singularly dedicated, state-of-the-art usability lab and focus group facility. The lab has the latest technology, including eye tracking, huge HD viewing screen, remote web viewing, and studio-quality video and sound. We conduct: Eye Tracking for web, software, packaging and advertising Usability sessions Focus groups In-depth-interviews Our usability setup (including eye tracking) can roll mobile to any location globally

69. User Experience – Why Eye Tracking? Eye tracking complements traditional behavioral and self-reported measures of user experience with physical measures of eye movements, showing us what users pay attention to and how they process the information they see Eye tracking sheds light on the why underlying the what of user behavior: Assess decision-making processes What elements of the medium do users consider before finally selecting one - all available options or only a few? Search strategies and efficiency How do users look for relevant information? Where do they expect it to be? Do they quickly recognize a relevant link/action signifier or do they need to read over it several times before taking action? How does messaging and copy interplay with the design and user experience? Evaluate the match between visual design and business objectives Which elements are users immediately drawn to during those critical first seconds of impression formation? Are the impressions formed from these images consistent with business objectives? When eye tracking is added to the usability arsenal, we learn not only if design weaknesses exist, but also where they lie, why they fail and how to fix them Eye tracking allows for meaningful benchmarking and measurable usability tracking Heatmaps and gaze timelines allow for easy and accurate comparison between sites, ads and other visual stimuli (e.g., does it take 8 views to find vs. 5, is X viewed more than Y?).

70. Heatmaps – What Do They Tell Us? A heatmap is an aggregate image representing the eye gaze data of all users viewing a given page - the warmer colors at specific points on the page indicate where people’s viewing patterns converge, and thus show us which items or region draw the most attention from the group A heatmap image provides a single-glance depiction of information viewing and patterns of usage Even more importantly, it shows those areas that users never see at all – and if they didn’t see it, they can’t use it or choose it Heatmaps provide a powerful visual tool that is driven by user behavior and allows clients to quickly spot design gaps, capitalize on usage patterns and communicate design direction easily to teams

71. Heatmap – Example Warmer colors indicate the areas that are viewed the most Symbols indicate where each user clicked to navigate away from the page

72. Gaze Timelines – What Do They Tell Us? A gaze timeline is an individual image that indicates the path of one user’s eye gaze for the duration of each page, view or visual stimulus. Each circle indicates a fixation, and larger circles indicate longer fixations Analyzing gaze timelines allows us to answer fine-grained questions such as: What element(s) are viewed first, second and so on for a given task or impression? Did users have trouble comprehending the information or design before taking action? Did users see and then choose to skip over an area or simply not see it at all?

73. Gaze Timeline – Example This site is well-designed for Search Task A This site is not well-designed for Search Task B Relatively few fixation points and short scanpaths (lines between the fixation circles) indicate an efficient search Numerous fixation points and long scanpaths indicate an inefficient search

74. Gaze Timeline – Print Ad Example In the first 5 seconds a viewer looks at faces first Prices are not noticed in the first 5 seconds Words in bubbles get read before standard text Colored text and shapes draw attention to offers on the right, but not to pricing Bottom left corner is a “dead” spot 5 Seconds

75. Information Design– Core Competency Our Information Design practice provides an unparalleled scientific and customer research driven information platform Sentient Service’s Information Design group creates a user experience that delivers the right information in the right place at the right time Content Strategy Information Architecture Heuristic Design Interaction layers and dependencies Wireframes

77. Contact Information 512.288.1706 www.sentientservices.com info@sentientservices.com Paul Janowitz, CEO & Founder paul@sentientservices.com