Fueling Growth with Customer Insights: Financial Linkage, Social Networks and Preference Measurement
TRC Conference Summary - October, 2009
Session 1 - Return on Research: Linking Research to Firm Financial Outcomes
Rajan Sambandam, Chief Research Officer, TRC Market Research
Rajan started with the big question of whether research matters and how to establish if it does. He suggested that by showing the linkage between research and business outcomes it would be possible to show if research really matters. He started by outlining the idea of the satisfaction profit chain and summarizing the considerable existing evidence for the links on that chain. Next he discussed how to practically establish the linkage between research and firm financial outcomes and the issues involved in doing so. Examples from various industries were discussed to illustrate the process. He noted that while many firms focused on maximizing satisfaction, in many cases optimizing satisfaction might be the better strategy.
Session 2 - Mine Your Own Business: Understanding What People Say About Your Business Online
Oded Netzer, Associate Professor of Marketing, Columbia University
Oded presented a way for companies to monitor the marketplace in a substantially different manner from traditional marketing research. The exponential rise in online gathering places such as blogs, forums and chat rooms has given rise to a vast quantity of unsolicited information about companies. Oded presented a way by which companies can efficiently summarize this information to understand how the market sees them. The process starts by downloading the textual information from relevant sites, subjecting it to advanced text mining software and developing perceptual maps of how companies and concepts relate to each other. Using examples from the auto and pharmaceutical markets, Oded showed that this process can both confirm existing perceptions and unearth new insights otherwise unavailable.
Session 3 - A Matter of Opinion: The Role of Social Networks in New Product Diffusion
Raghu Iyengar, Assistant Professor of Marketing, Wharton School, University of Pennsylvania
Raghu used a pharmaceutical example to explore the idea of social contagion and how this process influences the way a new product spreads through a social network. First, he discussed the ways of measuring the influence that a particular member of a social network has - either self-stated or based on the opinions of others. Next the actual spread of a new drug was tracked through the prescribing behavior of a network of doctors. The network was identified by the doctors themselves through their influences and referrals. The results showed that there wasn't as much of a relationship between a doctor's self opinion of influence and the opinions of others. The surprising results included the identification of pivotal members of the network who had a huge role in the spread of the drug, but who would not have been identified through conventional means.
Session 4 - Retailing in a Virtual World
David Bell, Associate Professor of Marketing, Wharton School, University of Pennsylvania
Retailers face new challenges and opportunities in the online world. This was David's primary message and he went on to summarize his research in this area and how it could help online retailers. First, customer adoption happens in geographic clumps rather than in a smooth spread. Second, word-of-mouth customer acquisition tends to be concentrated in certain areas, but can really take off within those areas. Third, customer based growth initially happens through proximity and then through customer similarity, such as between those in LA and NYC. Fourth, preference minority markets are especially attractive to sales of niche products. By considering these issues online retailers may be able to sell more.