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Changing Merchandising Strategies: A Lesson from Art Van’s Bankruptcy

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Every once in a while one of the journal articles I am reading aligns with something in my news feed.  This happened to me recently.  As I was reading a journal article on new research in alternative retail merchandising strategies, my LinkedIn feed was inundated with articles on the bankruptcy of Art Van Furniture, one of the Midwest’s leading furniture and mattress retailers.  A few of the articles highlighted Art Van’s switch to ‘Lifestyle’ merchandising as one of the reasons for their collapse.

The article I was reading was titled “The Impact of Compliment-Based Assortment Organization on Purchases” by Panagiotis Sarantopoulos et al. published in the June 2019 issue of the Journal of Marketing Research.  In the article, the authors present the results of several experiments purporting to show the impact of switching from a substitute-based merchandising strategy to a compliment-based merchandising strategy.  Before we go any further, I need to provide some definitions.

The Merchandising Systems Explained

A substitute-based merchandising system is one where the offerings are grouped by their closest substitutes.  In the example of a furniture store, all the couches would be displayed together. Chairs, coffee tables and lamps would be in different sections.  Within the furniture industry, a good example of substitute-based merchandising would be American Freight.

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A complement-based merchandising strategy is one where the offerings are grouped by context of use.  In our furniture store example, couches, chairs, coffee tables and lamps might all be displayed as a set.  Within the furniture industry, this is called ‘lifestyle’ merchandising.  The classic example is Rooms To Go.

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Few furniture retailers merchandise solely as substitute or compliment-based.  Most merchandise somewhere along the continuum.  Some, like IKEA, utilize both merchandising formats in different areas of the store.  When consumers first enter an IKEA store, they progress through a series of lifestyle displays.  The further they get into the store, the merchandising becomes more substitute-based.

Beyond furniture stores, the authors also provided examples of substitute and compliment-based merchandising for grocery stores, clothing stores, and restaurants.

The Research

In their research, the authors attempted to prove that consumers will buy more products and/or spend more money in a complement-based merchandising format than they would in a substitute-based format.  To test this hypothesis, the authors conducted four studies. The most important study involved resetting an actual grocery store and comparing sales trend data versus a control store.  Additional studies tested the hypothesis in a simulation of an on-line furniture dealer or in a virtual grocery store.

Without going into a lot of detail, each of the tests proved the primary hypothesis.  In the real-world grocery store test, the average number of weekly purchases and the average transaction amount among shoppers in the complement-based merchandising format increased relative to the control store.  In each of the other tests, the number of items purchased increased.  (The transaction amount was not always tested.)

If we were to extend the findings to the furniture store arena, then we might conclude that Art Van’s switch to a ‘Lifestyle’ merchandising format should have been successful.  If Art Van’s bankruptcy filing was any indication, the switch was not successful.  The authors of the research did point to a few reasons why a compliment-based format might not always perform better.

Moderating Factors

In their article, the authors discussed several potential moderating factors.  Moderating factors are things that, if they were present, might change the results so that a compliment-based merchandising format would not perform better.  The authors identified three: visualization, involvement and shopping goal, and recognized two others in their literature review: effort and product function.  Let’s review those one-by-one.

Visualization: Sarantopoulos and his colleagues hypothesized that shoppers who could easily visualize how or where they were going to use the product would be less likely to influenced by a compliment-based merchandising format.  This hypothesis was tested, and proved, with the simulated on-line furniture store.  As in the grocery store test, respondents spent more when shopping in a compliment-based format. However, when the data was filtered, those respondents who said they could easily visualize their target room spent the same amount regardless of which type of merchandising format they shopped. 

Involvement: Sarantopoulos and his colleagues hypothesized that the more involved a consumer is in the purchase, the less likely they would be to spend more in a compliment-based merchandising format.  They tested, and proved, this hypothesis by interviewing shoppers at the test and control grocery stores used in the earlier test.  Again, respondents in total spent more when shopping in a compliment-based format. However, those respondents who placed greater importance on the items for which they were shopping spent the same amount regardless of which merchandising format they shopped. 

Shopping goal: Sarantopoulos and his colleagues hypothesized that consumers who had specific goals, such as a shopping list, when they initiated their shopping trip would buy fewer products in a compliment-based merchandising format.  They tested and proved this hypothesis in the simulated grocery shopping exercise.  Respondents bought more products in a compliment-based format than in a substitute-based format.  Respondents with a shopping list did buy fewer products than those without a list but they still they still purchased more products in a compliment-based format.

Effort: Kristin Diehl et al, in a paper published in the Journal of Retailing, hypothesized that a consumer’s preference for a compliment-based merchandising format was dependent upon the level of effort they were willing to expend while shopping.  The authors of this study tested this hypothesis in a pair of simulated online exercises.  Without going into the details of the exercises, the authors proved that the level of perceived effort expended while shopping impacted store preference and that the level of perceived effort was driven by the merchandising format and not by the number of screens the respondent had to access to view the complete selection.

Product Function (hedonic vs. utilitarian): Diehl and her colleagues also hypothesized that a consumer’s preference for a compliment-based merchandising format was dependent upon the function of the product being purchased.  Specifically, they hypothesized that consumers shopping for more hedonic products, ones whose use provides sensory or emotional pleasure, will be more likely to prefer compliment-based formats versus those shopping for more utilitarian products.  They were able to prove this hypothesis in a test involving office products.

The Missing Factor

Unfortunately, there is one moderating factor that was not tested by either group of researchers.  Art Van and most other furniture stores employ sales associates that assist the shopper in the selection and purchase.  These associates can have a significant impact on the number of items purchased, the transaction amount and the consumer’s perception of the store.  It would be perfectly reasonable to hypothesize that the presence of a sales associate could moderate any difference in merchandising format among the shoppers they interact with.

Perhaps more important that simply the presence of the sales associate is the training and experience of the associate in the format being used.  Most of us would easily accept the hypothesis that a more experienced sales associate would have a greater impact than a less experienced sales associate regardless of the merchandising format.  The relevant question is what the impact on that effect would be of taking a sales associate out of one format and putting them into another.

Given Art Van’s experience, it would be interesting to run a test and control study, similar to Sarantopoulos’ grocery store study,  examining sales in an assisted furniture store environment over an extended period of time.  The hypothesis would be that any initial difference in sales would change over time as the sales associates become more experienced with the new merchandising format.  Understanding the magnitude of effect, that time it takes to moderate and that factors that influence magnitude and time is the key to implementing a well-executed transition.

Summary

Given the research done on the topic, it was reasonable for Art Van management to believe that a compliment-based merchandising format might perform better than a substitute-based format.  However, there were several moderating factors that should have given them pause before instituting a switch from one format to another.  Among the relevant moderating factors were the ease with which furniture shoppers can visualize where their purchases are going, the high level of involvement furniture shoppers typically have and the hedonic nature of the purchase, particularly among high-end shoppers.  

But, perhaps the one thing that should have prompted Art Van management to slow down and conduct a serious, well designed test, is simply the dearth of any existing research on the impact of switching from one system to another in an environment where sales associates play a significant role in the sale.  If any such research has been done, Sarantopoulos and colleagues did not reference it in their literature review.

Links

Applied Research Findings: Brand Value and the new Simmons Logo

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Introduction

Two events occurred recently that got me thinking about brand logos.  First, while catching up on my backlog of Journal of Marketing Research issues, I read about the results of new research into the effect of logos on brand equity.  Second, one of my old employers unveiled a new logo as part of an effort to reintroduce one of their brands to the Gen Z audience.  The change gave me the perfect opportunity to apply the learnings from the article.  I thought I would share a few thoughts on the subject.

Summary of New Research

The new research I am referring to was published in the February 2019 issue of the Journal of Marketing Research.  It is titled “The Visual Asymmetry Effect: An Interplay of Logo Design and Brand Personality on Brand Equity” and written by Jonathan Luffarelli, Antonios Stamatogiannakis, and Haiyang Yang.  I am going to attempt to summarize it here.  

In their research, the authors describe an attempt to study the interplay of logo symmetry (or asymmetry) on the value of the brand.  Through a series of studies, the authors are able to show that 1) consumers perceive brands with asymmetrical logos to be more “exciting” than brands with symmetrical logos; and 2) consumers place a higher value on brands with asymmetrical logos but only if the brand already has an “exciting” personality.

Each of these two findings has significant implications for those involved with logo design. The first finding would seem to imply that logo designers should strive to design asymmetric logos.  Most brands would love to be perceived as “exciting”.  However, the authors only tested the logos in absence of any other brand information.  When other information is added, the results become a bit more nuanced.

In subsequent studies, the authors measured the value consumers gave to brands that differed by logo symmetry and in their pre-existing personality.  What they discovered was that asymmetrical logos had no effect on brand value unless the brand already had an “exciting” personality.  In other words, changing a logo from symmetrical to asymmetrical might reinforce an existing “exciting” personality but it’s not likely to change a brand’s pre-existing personality.  

The overall finding seems obvious in retrospect but certainly worthy of repeating.  Logos can impact brand personality but the effect is limited when other information is available.  In other words, when allocating limited resources, we must be careful not to over-emphasize the impact the logo can have on driving to a desired personality.

Commentary on new Simmons Logo

Which brings us to the new ‘Simmons’ logo introduced by Serta Simmons Bedding (SSB).  I worked for Simmons, and later SSB, for eleven years beginning in 2007.  During that time, we did extensive research on brand personality.  Interestingly, the authors of the article used similar brand personality measures to the ones I used to measure brand personality when I worked for SSB.  We both based our work on Jennifer Acker’s five personality dimensions of excitement, sincerity, competence, sophistication, and ruggedness.  (For anyone doing brand equity work, I highly recommend Jennifer Acker’s foundational paper “Dimensions of Brand Personality”.)

The new Simmons logo was introduced as part of a new line of products targeted to Gen Z and Millennial consumers.  These consumers have been abandoning traditional purchase channels in search of new and better experiences, primarily a new and better purchase experience.  The legacy brands, such as Serta and Simmons, that are tied to traditional retail channels have been losing these consumers to the up-start brands such as Casper and Tuft & Needle.

For the purposes of this posting, I am going to put to the side the decision to use the 150-year old Simmons brand for this line.  (I am also going to put to the side, but can not help but mention, the risky decision to feature the color yellow on a mattress.)  Because I’ve just summarized an article on logo symmetry, let’s examine the new logo in the context of the article.

The Simmons logo has undergone numerous changes throughout its 150 year history.  However, if we just stick to the logos used within the memory of the majority of today’s mattress consumers, we see that the logo has generally been symmetrical.  The name ‘Simmons’ itself, with an ’s’ at the beginning and end and with a preponderance of symmetrical letters, lends itself to this type of logo.  The new design inserts a distinctly asymmetrical design element. 

In the absence of any other brand information, the research would suggest that a symmetrical logo would rate higher than an asymmetrical logo on the personality attributes of sincerity, competence and ruggedness.  And, as we discussed above, an asymmetrical logo would rate higher on the personality of excitement.

The question arises as to which of these dimensions would be most appealing to the Gen Z mattress purchaser.  Despite all the research that has been published on Gen Z, there is little in the public domain that specifically addresses their preferred brand personalities.  However, we can draw some conclusions from some of the research that has been published.

In their book “Marketing to Gen Z”, Jeff Fromm and Angie Read include an entire chapter on Gen Z’s search for “Brand Me”.  Fromm and Read conclude that Gen Z consumers, who they call “Pivotals”, search for brands that are unique, authentic, praiseworthy, and engaging.  One could argue that at least two of these adjectives translate best into the dimensions of excitement (unique, engaging).  Consequently, Simmons’ move to a more asymmetrical logo would appear to be a good one if they are trying to appeal to Gen Z.

Unfortunately, the new logo will not be judged in isolation.  The Simmons brand exists within the memory of the parents of Gen Z.  The brand exists online in the form of numerous reviews, articles and advertisements.  From the research we learned that asymmetrical logos can amplify the perception of a brand as exciting only if it already has that personality.  Unfortunately, that is not the case here.  Consequently, Simmons should not expect that changing to an asymmetrical logo will do much of anything to change the personality of the brand.

Summary

Serta Simmons Bedding recently unveiled a new initiative to attract Gen Z consumers to the 150-year old Simmons brand.  This effort included the introduction of a new logo that, among other changes, made the logo more asymmetrical.  Recent research suggests that the more asymmetrical logo could, when considered in isolation, provide the brand with a more exciting personality favored by Gen Z consumers.  However, a deeper reading of the research suggests that any impact will be much more muted as significant information on the brand beyond the logo is widely available.

Before we end, I must stress that I have only evaluated the new logo on one design element, it’s symmetry.  There are several other design elements, including color and iconography, that likely play a greater role in how a logo will be perceived.  I trust that my former colleagues at SSB have done their due diligence.

Further Reading

To read the full study, AMA members can access it through this link: https://doi.org/10.1177/0022243718820548. 

For a summary of the research by Jonathan Luffarelli, follow this link: https://www.ie.edu/insights/articles/can-a-symmetrical-logo-be-bad-for-your-brand/. 

For information on the recent Simmons 2019 rebrand, follow this link: https://www.furninfo.com/Furniture-Industry-News/11264/

For information on the Simmons 2012 rebranding, follow this link: https://www.furnituretoday.com/business-news/simmons-recharges-brands-with-new-logos-repositioned-beautyrest-line/

To read Jennifer Acker’s paper “Dimensions of Brand Personality”, follow this link: https://www.gsb.stanford.edu/sites/gsb/files/publication-pdf/Dimensions_of_Brand_Personality.pdf

For more information on Jeff Fromm and Angie Read’s book “Marketing to Gen Z”, follow this link: https://www.harpercollinsleadership.com/9780814439272/marketing-to-gen-z/

Book Review: “Extreme You. Step up. Stand Out. Kick Ass. Repeat.”

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Anyone who knows me well, knows I dislike self-help books and motivational speakers. However, I love hearing people tell stories about their life. The best lessons are those learned from experience. And the best teachers are often those who aren’t professional teachers.

When I saw the title of Sarah Robb O’Hagan’s keynote address at a recent conference I was attending, I cringed. Did I really want to spend 30 minutes listening to some unknown speaker tell me how to be “Extreme”? 

As is often the case, the best speakers are the ones you are least interested in hearing. Robb O’Hagan kept me awake, alert and engaged by sharing with us her life story…in 30 minutes. Wanting to know more, I hustled up to her table after the talk and grabbed a copy of her book “Extreme You. Step Up. Stand Out. Kick Ass. Repeat.”

For someone who has lived her life in exclusively in the corporate world, Sarah Robb O’Hagan has lived a life of extremes. By age 26, she was dining with Richard Branson on his yacht in Cannes as head of North American marketing for Virgin Airways. Just a few short years later, she had flamed out of positions at Virgin Megastores and Atari. Her career, and confidence, in tatters, she accepted a regional promotions position with Nike and started the long journey back up the corporate ladder. Today, she is best known for leading the transformation of Gatorade from a just another flavored sports drink to a full-line of sports performance products, the G-series. 

As interesting as her life is, and the lives of the many other “Extremers” she profiles, this is still a self-help book. In the course of telling us her life story, Robb O’Hagen shares with us several of the lessons she learned along the way. As with most self-help tomes, the lessons can usually be whittled down to one or two key take-aways. For me, the key take-aways were:

  1. Know your strengths and play to them. I know, that seems obvious. But, Robb O’Hagen’s contention is that we need to take it to the extreme. Once youI have identified your strengths, look for any and every opportunity to utilize them. Or, as Robb O’Hagen says often “step out of line”.
  2. Know your weaknesses and find others who compliment you. Again, this seems obvious. However, Robb O’Hagen wants us to make our weaknesses front and center. Do not hide them. This keeps us humble and makes us better team players.  

If you are looking for a fun read that will also motivate you to step out of line, I highly recommend Sarah Robb O’Hagan’s autobiography/self-help book “Extreme You. Step Up. Stand Out. Kick Ass. Repeat.”

Viz-Fest 2018 Review

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Last week (originally published November 12, 2018) I attended Viz-Fest, an on-line seminar put on by Keen as Mustard Marketing, a marketing agency, and E-tabs, a data software vendor. The seminar consisted of twelve 30-minute presentations on creating best-in-class data visualizations and insight presentations. I generally have low expectations when I sign up for on-line seminars but, in this case, the presentations far exceeded my expectations. With the exception of one blatant sales pitch, the vast majority of the presentations were quite high quality and very informative. Here are three of my many take-aways:

  1. Using a “Hero” color to make presentations more impactful.  KaRane Smith of Shine Insight taught all of us data geeks some basic graphic design principles. One of her recommendations was to select one color to use on all your charts as your “hero” color. This color directs the eye to the key piece of information. All other lines, bars or pie slices should be varying shades of a single color. She also opened my eyes to how to effectively use the controls in the Microsoft color selection window. (An expanded version of the presentation can be found here: http://insightinnovation.org/iiex-presentations/NA18/KaRene.pdf)
  2. “Be a storyteller not a summarizer.” Todd Ewing of System1 Group made me feel old by killing one of the business communication principles I was taught in business school. Bullet points are out and storytelling is in. Todd was one of several speakers who shared their experiences creating insight newsletters. I’ve never been comfortable at self-promotion but I’ve been learning a lot lately about the value of internal newsletters in promoting the value of the corporate Insights team. Now I’m full of ideas.
  3. It’s OK to be manipulative.  David Paull of Engagious gave us all permission to manipulate our audience’s emotions. He even taught us how to use several known cognitive biases when telling a story. For example, the “Identifiable Victim Effect” gives a name to the individuals in a story. By naming the speakers in this posting, I increased the likelihood you would read through this post. (David’s presentation can be seen here: https://www.youtube.com/watch?v=6JubZodpr4k)

I’ll be back for Vis-Fest 2019. My congratulations to the team at Keen as Mustard and E-tabs who curated and hosted the program. If you want to know more about Viz-Fest, follow this link: https://viz-fest.com

Book Review: Competing Against Luck

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The Book

Innovative products fail. Sometimes they fail quickly and spectacularly. Sometimes they fail slowly and quietly. Failure has become so commonplace it’s become an accepted cost of doing business. “Fail fast, fail often” is held up as a badge of honor among proponents of being ‘agile’.

Studying failure, and success, is what Clayton Christensen did before writing his latest book “Competing Against Luck”. Professor Christensen and his co-authors, want us to know that we can increase our chances of introducing a successful innovation, and thereby reducing the incidence and cost of failure, by adopting the “Jobs-to-Be-Done” approach.  

Professor Christensen believes we need to change the way we look for opportunities to innovate. The change might be radical. It might be painful. But, if Christensen is right, it will be worthwhile.

Jobs Theory

The basic premise behind Jobs-to-Be-Done is that consumers do not “buy” products or services, they “hire” those products or services to do a job for them. To get hired, companies must offer products or services that do the job better than all other alternatives.  Consequently, innovation starts with gaining an understanding what the job is. Or, as Christensen puts it, writing the job spec.

In this context, Christensen defines a “job” as the progress a person is trying to make in a particular circumstance. Within this definition, the term “progress” was a considered choice. Progress implies a journey. Our job spec must tell us where the consumer is coming from and where they are trying to go. Equally important is the consumer’s “circumstance”. The job spec must also tell us the barriers that are standing in the way of progress and what alternatives consumers are currently using to get where they want to go.

Once we accept the premise that we are competing to get hired, we must also consider the hiring process. Disruptive innovations don’t always involve major product changes. Sometimes they simply improve the purchase experience. Consequently, our job spec must also include the social and emotional dimensions of the job. What are the anxieties involved in the purchase process? What are the rewards the consumer is seeking?

My Five Take-aways

The book is full of interesting stories of companies that have implemented, or not implemented, a Jobs-to-be-Done approach. Each and every reader will find something different that is meaningful their particular experience. I’d like to highlight five concepts that I found particularly meaningful.

1) The importance of the experience

I already discussed how understanding the consumer’s experience is a critical component of the Jobs-to-be-Done process. Allow me to offer up an example from my own experience.

In 2014, a new mattress company appeared on the scene. When considered individually there was nothing particularly innovative about any part of the Casper product or the purchase experience. Foam mattresses were a dime a dozen. The technology to compress a mattress and put it into a box had been around for years. Consumers could easily order a mattress from any number of retailers with a comfort guarantee. What the leaders of Casper had that the leaders of the legacy brands and retailers didn’t have was an understanding of the barriers that were preventing consumers from buying a new mattress and a will to innovate against those barriers.  

Casper’s innovation was not the product but in pulling together all the existing technologies to create a better purchase experience. By innovating against the barriers to purchase and the anxieties consumers had, they brought non-consumers into the market and took existing consumers away from the less-than-perfect alternatives. 

2) Becoming a “purpose brand”

The concept of a “purpose brand” is almost a throw-away in the book. It takes up less than five pages about halfway through but it caught my attention. 

A purpose brand is one that has become synonymous with the job it is intended to do. As Christensen writes “a well-developed purpose brand will stop a consumer from even considering looking for another option.” A purpose brand is the consumer’s first choice and the choice they pay a premium for. As examples the authors cite Uber, Lunchables, FedEx, and Sawzall. Creating a purpose brand should be the stretch goal of any new product development effort.

As I read this section, I flashed back to the struggle my previous company had in developing our “brand purpose”. It would have been so much easier had we had the insight to know the job consumers were hiring us for. Instead we argued endlessly about what would make ourjobs meaningful. We had it backwards.

3) The errors we make

The book lists three “fallacies” that can drive companies off course. The first fallacy is the tendency of companies to design systems that measure their own processes and not how well they are doing at performing jobs. When a successful company is first established, the processes created are usually aligned to the job. Measurement systems are developed to drive efficiency in those processes. However, jobs are not stable. They change. If the processes do not change with the job, then the measurement system falls out of alignment with the job. When managers become overly focused on these measures, they lose focus on the job. Innovation opportunities are missed.

The second fallacy is the seemingly innocuous desire to increase sales to existing customers. The danger of this is that the focus of the innovation effort shifts to the customer and away from the job. I saw this personally as my previous company put great effort and expense into developing an array of products with the stated goal of attaining greater placement at existing retailers. Meanwhile, the disruptive innovator was making all these retailers obsolete by focusing on the job the consumer was hiring for.

The third fallacy is an over-reliance on data to make decisions. One of the unintended consequences of creating a culture of data-driven decision making is that data can and will be found to support any proposed action. As a marketing analyst I experienced this fallacy repeatedly. The example that drove me crazy was when I would provide a chart to a salesperson for a sales presentation only to see the same chart show up later in an internal strategic presentation. Under the guise of data-driven decision making, the strategic leader went looking for data to support a course of action most beneficial to their position and found it in a sales presentation. Had I known the chart was going to be used to drive company strategy, I might have created a very different chart that supported a very different course of action.  

4) Our misguided measurement systems

Companies, and investment analysts, put a lot of time and effort into measuring existing internal processes with little regard to their relation to the job consumers are hiring for. Honestly, the relationship between a product’s share of the shelf and it’s ability to do the consumer’s job is pretty tenuous and yet that metric is often front and center in many product launch scorecards. Putting resources around driving to a numerical goal not aligned to the job is not an efficient allocation of resources.

In Christensen’s view, any measurement system is dangerous as it risks taking the company’s focus off the Job-to-Be-Done. However, if a measurement system must be used it should be carefully constructed around the jobs consumers are hiring for. Consequently, measurement systems should not be standardized across products. They should be designed only after the company has aligned a product around a particular Job-to-Be-Done and designed their internal processes to successfully meet the job requirements.  

5) It’s not the number of reviews; it’s the content

While not core to the concept of Jobs-to-Be-Done, the book does contain an interesting insight into consumer product reviews. The authors contend that consumers are less influenced by the pure number of five-star ratings than by the individual reviews of people who were hiring the product for the job they have. For example, a single five-star review from a consumer who clearly stated they were hiring a home printer to print on card stock is more relevant than ten reviews from consumers that simply say they love the printer. Consequently, companies should encourage more detailed reviews and sort by content.

What’s missing?

The book does an absolutely wonderful job of selling us on the Jobs-to-Be-Done approach to innovation. In fact, it’s even a little annoying that they never stop selling it. At some point in time we don’t want the hard sell anymore. We want to know how to implement it. It’s not that the authors don’t recognize this. They try. They just don’t succeed very well. It is as if they sold us on a destination but only gave us a partial map on how to get there.

The chapter on “Integrating Around a Job” is particularly confusing. All of the examples in this chapter seemed to be there to emphasize the importance of designing processes around a Job-to-Be-Done. However, the examples provide precious little detail on how these leaders went about designing and institutionalizing these processes. The authors seem to think that once the hard work of spec’ing the job is done, everything else just falls into place. No reorganization is that easy.

Personal Summary

This book has forced me to seriously rethink my previous job as a Director of Consumer Insights. Generating quantitative data has become so easy and inexpensive that, in the competition for scare resources, we often skimped on qualitative research in favor of more quantitative data. Our innovation charters became filled with data; data about the target consumer, data about the incidence of a specific need, data about a willingness to pay a specific price. All this data wasn’t going to make us more innovative.  

Innovation requires inspiration and a will to change. In my experience, inspiration is more likely to come from qualitative research. Jobs-to-Be-Done provides a framework for conducting and presenting qualitative research in way likely to inspire innovation. Generating a will to change? Well, that comes from distributing copies of this book and getting your leadership to read it.

Better Research through Automation?

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As I was preparing to launch Morsights, I spent quite a bit of time updating myself on some of the latest trends in the Insights field. There is no doubt that the role of Insights Director has changed from one of managing suppliers to one of managing data. One of the many manifestations of this change is in the explosion of firms promising to automate research processes.

What is Automation?

In some respects, the trend toward automation is just an evolution of the DIY research trend. Survey Monkey and similar online research tools made it easy for anyone to program an online survey, no coding experience required. From this beginning, it’s easy to see how question phrasing, sampling, report production and even statistical analysis would be the next candidates for automation. This is work that previous generations of Insights Directors would have outsourced to a full-service research firm.

Now, firms such as Zappi, GutCheck and Conjoint.ly have introduced automated, online tools for concept testing, price elasticity testing, advertising testing, prediction modeling, and more. Instead of outsourcing the work, the Insights Director simply needs to select from a menu of choices and watch their email box for a report. 

What is the appeal of Automation?

Developers of automated research tools typically make two claims regarding their tools. The first claim of is greater agility. “Test early, test often” is a phrase one often hears when talking with vendors of automated research tools. Having introduced automated idea screening and TV ad testing to Serta Simmons Bedding, I can personally verify that automated research is faster, simpler, and cheaper than outsourcing. When compared to the alternative of using a DIY survey, it’s faster, simpler, and, sometimes, even cheaper.

The second claim heard from developers of automated research tools is that by automating “mundane tasks” their tools will free up time for the Insights team to conduct deeper analyses or to build better stories. In other words, a promise of better research. For the client-side Insights Director this claim is problematic because it’s validity depends upon the alternative.

If the alternative is utilizing a DIY tool then the claim of time efficiencies may actually be valid. An Insights team member who previously had been writing surveys or building charts might now be in a position to reallocate that time toward looking for interrelationships in the data or perfecting the internal presentation. However, this assumes the person is qualified. 

If, however, the alternative is outsourcing then the claim falls apart. When outsourcing a project to a full-service vendor, the Insights Director is not just outsourcing mundane tasks they are also hiring a team of vetted, knowledgeable analysts and storytellers. In other words, a full array of expertise that may not exist internally.

What is the lesson here?

The lesson I’ve learned is that before choosing to automate a research process, the Insights Director must carefully consider the level of expertise of their team. If the team has sufficient analytical knowledge and ability to translate insights into memorable stories then automating a research project may be something worth exploring. If that level of expertise is not in-house then using an automated research tool may be faster, simpler and cheaper, but not necessarily better. In it’s current form, automation is a poor substitute for expertise.