Returns on research
When times are uncertain, such as when recessions are predicted for some future time period, certain budget items are the first to get the axe to save money — advertising research, training budgets, and anything considered “nonessential.” Needless to say, if they really truly were nonessential, they would no longer exist, but they do because they all make money rather than cost money. They require business operators to part with cash today for the promise of high returns tomorrow.
Businesses that cut these items give an advantage to competitors that continue to invest in them. They will have the research to make more strategic, purposeful decisions; advertise to customers who start to forget the brand of austere businesses; and retain staff and excellent service while the overly cost conscious experience attrition and declines in service.
So says Dr. Moses Altsech, who teaches in the marketing department at the University of Wisconsin–Madison School of Business and is the president of Altsech Consulting. Altsech, who will be a seminar speaker on May 17 at the annual In Business Expo and Conference, touts the importance of business research, especially in recessionary times. With an assist from Nick Lombardino, co-founder of Culture- Con, a culture-focused conference held in Madison, he identifies several actionable tips on common types of business research.
This involves a third party interviewing business-to-business customers who chose you and those who chose a competitor, assessing the “whys” of their choices. There are some pat answers as to why they did or did not choose you. A typical explanation for a yes answer is because you have great products, service, or reputation, Altsech notes, and for no it’s because “they weren’t ready to buy or they don’t have the budget.”
Win-loss research is an opportunity to find out who else the new customer (or lost prospect) considered, what was good or bad about your competitors’ pitches or products or responsiveness, and what specific suggestions for improvement the customer (or lost prospect) has for you. “The third-party involvement really loosens tongues; it’s remarkable,” Altsech notes. “In the end, you learn what you do that really impresses people and what doesn’t, and it gives you the same insights about competitors.”
It’s also rarely done because a lot of companies consider those things intuitive. A researcher knows better, so to conduct valuable win-loss research, do the following:
Tip 1: Offer tokens
For starters, offer a small incentive, perhaps a gift card, as a token of appreciation for the customers or the lost prospects. It makes the recruitment for the research easier because people are willing to participate for a small token of appreciation.
Tip 2: True the time
Secondly, make sure you’re upfront about the time needed for the interview. “Nobody wants to sign up for the interview thinking, ‘This could take all morning,’ so 20–30 minutes are more than enough for a skilled researcher to get a treasure trove of information from the win-loss interview, Altsech notes. “So, if I hit you up and say, ‘Can I have 20 minutes of your time, you’re certainly more amenable to that than if I ask about interviewing you on Thursday morning. You would think, ‘Oh, I don’t have two hours.’ So, be upfront about the time you need for the interview.”
Tip 3: Interview individuals
Third, these can’t be or should not be focus groups. To be effective, they have to be one-on-one interviews. It’s a little more labor intensive for the researcher, but it will yield considerably more relevant and more actionable results.
Research on decision-makers
According to Altsech, the very term “B2B” research treats the customer as an organization with needs, processes, and resources. However, businesses are run by individuals whose decisions are often emotional in addition to rational; whose personal needs, worries, and aspirations matter as much as organizational needs, worries, and aspirations; and whom companies often don’t understand on a personal level.
“Using research — in this case most likely interviews or focus groups rather than surveys — to get to know the person behind the customer, the “B” part of B2B, is underutilized and invaluable,” he states. “There’s some research on how emotion affects B2B decision-making but people don’t talk about it enough.”
So, the actionable tips for research on decision-makers starts with the following:
Tip 1: Define decision-makers
Who do you want to capture? The relevant people to reach are not always just the highest ranking. There are influencers and there are end-users whose insights should be captured too because they have a lot of value, and the reason they have value is because they influence the process and they influence the top echelon of decision-makers.
Tip 2: Go for groups
Focus groups or interviews would be the best method to capture decision-maker’s insights — much better than a survey, for example. “Each research method has unique benefits and unique potential drawbacks, which is why consulting an expert here is essential so that the business owner who is hiring the expert can make a conscious decision and say this is more important to me,” Altsech states. “Let’s choose the research methods that fit my [feedback] goals.”
Tip 3: Opt for openness
Third, don’t do research just to confirm what you’ve already decided to do. The whole point is to listen, to learn, and to make a more informed decision based on actionable insights that come from your customers and prospects. Bring an open mind to the table; if you do, it will save both time and money.
Believe it or not, corporate culture is measurable, Altsech maintains. “We keep talking about corporate culture, how much it matters, how it can attract and keep top talent when the going gets tough, how it reflects a company’s values, and so on,” he notes. “But it’s very rarely measured because it’s considered this ‘experiential thing’ that can’t be broken down to metrics. That’s a fallacy because just as we can measure customer satisfaction or employee engagement, we can measure whether the culture we aspire to build or have is experienced as intended by our employees — and our customers too.”
To reinforce the growing attention to effectively measuring culture, Lombardino notes that the market size for employee engagement software is estimated to reach $870 million within the next four to five years. The software functionality typically includes qualitative and quantitative measures that help depict an organization’s overall cultural health, oftentimes reporting on growth opportunities for increased employee recognition, feedback, personal growth, and wellness.
“For these tools to be successful, however, employees need to trust their employer to provide their honest feedback,” Lombardino notes. “Otherwise, it’s bad data coming in and bad data coming out. Additionally, if employees feel that their input is being ignored, it can erode trust and lead to increased disengagement.”
Tip 1: Curate culture
You can’t measure something you haven’t clearly defined first, so you have to start with a clear vison of what culture you aspire to have before you create metrics to assess that culture. When establishing a definition, you have to define the ideal or the optimal culture — the culture you aspire to create at your company — before you get into designing metrics. “Otherwise, you’re putting the cart before the horse,” Altsech states.
Tip 2: Survey servants
Cultural metrics can be taken in the form of an employee survey where the central question is about whether you’ve established the kind of culture you aspire to, and it can be a survey that has both quantitative and qualitative components. Follow up the overall survey with individual interviews of a smaller segment of employees in diverse roles — someone from accounting, somebody from customer service, someone from shipping, newer employees, and some long-time employees. “Do a smaller sample just to get richer feedback,” Altsech notes. “That would be an excellent complement to a survey on culture. So, you could do both, you’d get benefits from either one, and both are feasible to do within a good, tight timeframe.”
Tip 3: Reveal results
With cultural metrics, it’s important to share the results. You don’t have to share an entire report with everyone in the company but share a summary of the results and be open about what you intend to do to strengthen the culture, even if most respondents believe you’re on the right track. Even if the results are encouraging, the executive mindset should be one of continual improvement. “We’re not going to put our feet on the table and rest on our laurels,” Altsech says. “We’re going to keep doing everything that works. We’re going to strengthen that culture even further and be open about what we plan to do.”
One effective strategy for organizations to consider is the publication of their culture metrics, Lombardino adds. This level of transparency and accountability illustrates a company’s commitment to their employees and desire to keep improving.
Altsech could not agree more. If people say the corporate culture isn’t what it’s cracked up to be, that the culture they experience at work is not what the corporation says it is, then be open about how you plan to correct the culture. Oftentimes, people do this research, especially since this is employee-facing research — not for the executives — and they fail to adequately follow up, leaving people to wonder what happened and whether things will actually change. “People must feel more included,” Altsech states. “I hope that’s part of the culture you aspire to.”
Having said that, Altsech is quick to add that different organizations will have different cultural identities. Some want to stress innovation. Others want to stress their customer focus. Some want to stress having fun. The key is to decide what they want the experience to be like for both employees and customers and then bring that to life, and there are strategic experts who can help you define the culture you aspire to have.
Defining organizational values is instrumental at this stage in the process, Lombardino adds. On an individual level, values are commitments to who we are and what we aspire to be, and it’s the aspirational nature that makes values resonate with the individual, and ultimately, how we make decisions and hold others accountable. Therefore, a leader will find it difficult to articulate a meaningful vision for an optimal culture if that vision doesn’t express their own core values and basic identity.
“So as a leader, start with values that are core to you, not necessarily what you think your employees or customers want,” Lombardino states. “Additionally, defining an optimal culture is not something that should be overly controlled and hierarchical; it should be participatory and inclusive of diverse voices within the organization. People are more committed to what they have had a hand in building.”
Quantity and quality
Two challenges with business research is the simple lack of it and the lack of quality, Altsech laments. He finds it hard to believe that in this day and age, there are companies that don’t measure customer satisfaction or employee engagement. “They interpret the lack of complaints as proof of high satisfaction, which is like interpreting the lack of symptoms before your metastatic cancer diagnosis as proof of your perfect health,” he states. “Therefore, decision-makers keep steering the ship on a gut feeling, which sometimes is spot-on, and sometimes is just indigestion.
“They won’t necessarily go out of business as a result,” Altsech adds. “They will just be at a perpetual competitive disadvantage to those who actually invest in research that strives to understand their customers’ and employees’ needs, aspirations, concerns, and experiences.”
The lack of quality research stems from investing in research on what they need to do and not on how to do it. In too many cases, surveys are poorly designed and yield misleading or inadequate insights.
“It’s like having the confidence of having a global positioning system and following your GPS on a foggy night, not knowing that it’s leading you straight into a lake,” Altsech explains.
Surveys often are too short — people are over-surveyed and wouldn’t respond is the excuse — or too long, which hurts both the quantity and quality of research results. In addition, focus groups and interviews are poorly done and executed without much thought, as if they’re just conversations around a dinner table rather than research methods that require skill to conduct and interpret.
“This is a chronic problem and decision-makers — in this case, the buyers and users of research — often can’t judge the quality of the deliverables because it’s a different skill set, therefore wasting money and opportunities,” Altsech says. “It’s scandalous, actually.”
Research requires an investment in time and money in the right kind of research. You can do a million different studies on a million different things, but not every type of research is suitable for every kind of problem and for every kind of business. Altsech’s advice for evaluating the quantity and quality of the researchers includes the following tips:
Tip 1: Select strategists
Find someone who understand strategy, not just research, to determine the type of research that is most beneficial to your company. A strategy expert can tell you, for example, when people are trying to sell you things that you don’t need.
Tip 2: Evaluate experts
Judging the quality of research is really tough for business leaders, Altsech notes. Most CEOs don’t have an extensive background in research methods, but a real expert can explain research methods in understandable terms. They don’t just present results, they can also provide actionable, strategic, managerially relevant recommendations on how to use the results to improve your business. “I would interview a research expert the same way that I would interview any other person,” he advises. “I’d ask him to provide examples of good and bad research and see if they know what they are talking about.
“If they can’t explain how good research is different, maybe they don’t know the difference.”