Learning About Your Customer

Volume 137, No. 6  - Friday, August 3, 2012

Any modern manufacturer, no matter what the industry, faces similar challenges. The whole world has become the market. Oh for the glory days when consumers were consistent, stores predictable and you could make a single product and sell it through the same channels year after year.

The world has changed along with the world of cheese and trade. Consumer tastes have changed, consumers have changed, those who stand between you and the consumer have changed, with the weaker dollar, US cheese has gone global.

Universal Issues
In order to grow, to survive long-term in the global market every business confronts the following:
a. Delivering ever better product and service.
b. Producing uniform product quality.
c. Better ways to test new products and markets.
d. How in tarnation to deal with
these new global markets?

I’m not an economist, or an expert in statistical market research, but I am sure there is a better way than shooting from the hip, taking a stab in the dark, or foolishly listening to someone else who probably doesn't know much more than you do.

Ask most people what market research is and they will tell you, “asking your customers what they think.” While it’s true that market research does involve asking questions, it’s not quite as simple as just asking them what they think.

Too many people look at their market research the way they look at references for the resumes. Let’s face it, we are very selective about who we ask to be a reference on a resume.

Not to piss anyone off, but market research has to tell you a bit more than what you want to hear. A basic understanding of practical statistics can help. Those that run in fear, or suffer from the inability to stay awake when confronted by the word statistics need not worry, though you are probably thinking of all the other things they have to do today rather than continuing to read this article.

Don’t panic! I promise not to use a single mathematical symbol. Practical statistics is not abstract, is useful, and kind of makes sense when you stop to think about it.

Sure, you can pay a lot of money for a bunch of canned research that tells you everything you don’t need to know about customers in general, and very little you need to know about your particular customer. You can fly blind, taking a chance that the product you’re making you will find a market in the far flung corners of the world in the hands of unknown customers. But doesn’t it make sense to take matters into your own hands as much as you can, so that what you learn about your customers, and the consumers that buy from them, remains your proprietary information, your competitive advantage?

Help is on the Way!
To help, over the next few columns I will focus on some simple homegrown solutions to the challenge of market research, that have been used by some of the most successful companies around the world.
We will explore how to create questions that will get you accurate and useful responses, whether you ask your pals, or do more formal market research. We will explore how to design an effective market research study, including the incredibly anti-intuitive truth that less can be more, and a survey based on random sampling rather than interviewing everyone can provide better and more accurate information. Less work, better information, try and beat that.

Don Wheeler’s Three Questions and the Deming Cycle:
We will have to learn some new principles and terms, and will have to come to a clear understanding as to what they mean, but there’s only a few. Like everything worthwhile what we do will be front end loaded: preparation IS everything. We will learn how to design a good bit of research, based on the statistician Don Wheeler’s Three

Questions:
1. What do you want to accomplish?
2. By what method will you accomplish it?
3. How will you know when you have accomplished it?

And we will use what is called the Deming cycle, represented by the acronym PDSA, which stands for plan a test; do the test; study the results; and act on what you learn, either putting it into action, or cycling back and doing the process over again if what you accomplish is not what you wanted.

Rule of Three
For this article, I will introduce what I call the Rule of Three. Adapted from the old marketing adage that consumers will not remember the name of your product until they have heard it from at least three different advertising mediums.

Where this applies to understanding markets is you need at least three different sources (not just one study). If you hear something from one source only, don’t trust it. And if you hear the same thing from two of your three, consider it. If you hear the same thing from all three sources, it’s probably true. But like the detective in the Dashiell Hammett story “Dead Yellow Women,” never say it is raining, say it appears to be raining on the outside chance that someone is on the roof with a watering can.

People spend their professional lives mastering market surveys, and the good ones, like Mintel, are very expensive. What you will do may provide useful stuff about your products in the marketplace, but it will still need to be market tested, for the beauty of our system of doing business is the market gives direct and immediate feedback: consumers like what you make and buy it or they don’t. A mistake can be very expensive, so increasing the odds of success is recommended. DS

Dan Strongin is managing partner and owner of Edible Solutions, a consulting company focused on helping companies making great food make a profit. He will be writing a monthly column in Cheese Reporter. Strongin can be reached via phone at (510) 224-0493, or via e-mail at dan@danstrongin.com. You can visit and blog with Dan at www.managenaturally.com.

 

Other Strongin Articles written for Cheese Reporter

dot Learning About Your Customer


dot
The Vision Thing
dot Customer Service? NOT!
dot Collaboration: The Road To A Better Future
dot Resolution
dot Water

dot In Memoriam: Ignazio Vella 1928-2011
dot Of Cheese, Seals, And Deming
dot In Their Own Words: Lettie Kilmoyer
dot In Their Own Words: Fritz Maytag
dot In Their Own Words: Paula Lambert
dot Show Me the Money: Cost Accounting
dot Cost Accounting Chokes, Part 2: Inventory

dot Cost Accounting Is Choking Your Business, Part 1
dot It Ain’t Over ‘til It’s Over
dot Raw Reason
dot A Story For The Holiday Season, Part II
dot A Story For The Holiday Season
dot Truth In Labeling
dot This Too Shall Pass or "What were we thinking?"
dot Marketing Language That Resonates
dot When Will We Ever Learn?
dot Cheese Competitions In The Context Of Marketing

dot Economy
dot Even The Best Laid Plans Go Astray
dot Root Causes: Communication
dot Partners
dot Diamond Cutting:
dot
It's What You Don't Know That Can Hurt You
dot Integrity and Ethics
dot Pricing:  The Perceived Value
Designing the Effective Sell Sheet
Common Sense
It All Begins in The Mouth
Of Cars...

The Gathering Storm
As Our Industry Evolves, So Should Our Terminology:

Other Cheese Reporter Guest Columnists
Visit John Umhoefer
Visit Neville McNaughton

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