September 14, 2011

Consumer.ology
Philip Graves

The Market Research Myth, the Truth about Consumers and the Psychology of Shopping

2010 Philip Graves Adapted by permission of Nicholas Brealey Publishing ISBN: 978-1-85788-550-7

Introduction
Market research in the form of consumer focus groups, polls, and surveys has long been the normal and accepted manner for testing new products, services, and communications materials. In Consumer.ology, Philip Graves discusses how the idea that questions answered on a questionnaire or in a focus group can provide useful information on which to base business decisions is actually a myth that can lead to product failures, political blunders, and wasted money. In this book, corporate leaders and market researchers will discover the tools they should be employing if they want to truly understand their customers and the psychology behind their buying habits. dependable insights. According to Graves, Market research is a pseudo-sciencein fact it is consumer. ologyand the beliefs underpinning it are false. In the last half century, the rise of market research has been meteoricin the United States alone it is an $11 billion industry. Organizations fall in love with market research because of its apparent consistency of response and the notion that such consistency indicates consensus or the uncovering of some consumer truth. In reality, the fact that people react similarly to consistently-executed questioning processes does not reveal anything other than the cause-and-effect relationship of such research is consistent. Why does market research continue to hold such allure for companies and organizations wishing to test new products and ideas? In some instances it is a way to show due diligence or avoid blame for a

Overture: The moment of truth

Popular theory says that asking a few hundred people to complete a questionnaire or taking a far smaller number and really grilling them will result in useful,

Business Book Summaries September 14, 2011 Copyright 2011 EBSCO Publishing Inc. All Rights Reserved

Consumer.ology

Philip Graves

failed project. Couple that with peoples demonstrable capacity to collect evidence selectively to support a desired belief or outcome, and it becomes easy to understand how market research has flourished. The basic premise of market research is that people can be asked questions and their response will be the truth, yet this is largely a baseless belief. When people are asked a question or invited to participate in a discussion, the conscious mind finds it almost impossible to avoid putting its own spin on events, so when the mind considers the future, including the probability of purchasing a good or service in the future, it does so with an idealism that is both optimistic and simultaneously devoid of any objective assessment of the past. Graves believes that what drives organizations into questioning the why and what will be gets in the way of fully appreciating the right now because it is the moment of consumer behavior that provides the best opportunity to understand what is taking place. The moment of interaction with a product is when researchers can best understand what is taking place and how the environment and the presence of other people change and shape decisions. The reasons behind conducting market research are commendable: the better an organization understands its customers, the more likely it is that it will make good decisions about new product offerings. It is the approach of most market research that is misguided. What matters most is not what consumers say but what they do and why they do it.

Key Concepts
Evaluating five aspects of a research study, the AFECT criteria provide a means of gauging the extent to which consumer research findings are an artificial product of the research process or an accurate reflection of consumer reality. The criteria are a good tool to use when considering if an investment in research is likely to be beneficial. The AFECT criteria are: 1. Analysis of behavioral data: The results should be an analysis of consumer behavior rather than consumer attitudes. 2. Frame of Mind: Research should allow consumers to interact with the product, service, or communication.

3. Environment: The research should be conducted in the environment where the consumer would normally encounter the product, service, or communication. 4. Covert Study: The focus of the research should not be apparent to the participants. 5. Timeframe: Quick responses from research participants versus in-depth, thought out responses are preferable.

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Understanding the Unconscious Mind

The story of New Coke is part of marketing folklore. The attempt to replace the original Coca-Cola formula with a new one triggered a large public backlash resulting in New Coke being withdrawn from sale three months after entering the market. Why did it fail after testing well in market research? For one, there is a world of difference between sipping a drink and consuming an entire can of it. Also, separating the product from the packaging removes the brand from the equation. Graves believes that it was not just the fact that the research was flawed but the fact that no such research can be right. That is because the unconscious mind is

Information about the author and subject: www.philipgraves.net Information about this book and other business titles: http://www.interculturalpress.com/boston/ Related summaries in the BBS Library: Buyology Truth and Lies About Why We Buy By Martin Lindstrom Built to Love Creating Products That Captivate Customers By Peter Boatwright and Jonathan Kagan

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Consumer.ology

Philip Graves

the real driver of consumer behavior, so understanding consumers is largely a matter of understanding how the unconscious mind operates. The first obstacle is recognizing how frequently people react without conscious awareness. Market research panders to the false belief that people are primarily conscious agents and that when asked what they think and feel, their response can be trusted.

perception of themselves. The moment any consumer research operates on the assumption that consumers know what they think about a particular subject and that their opinion is indicative of how they will behave, the research is inherently flawed.

Reading Consumers
If asking consumers to discuss what they think and feel about a product is a flawed model for research, what does work? How are companies to correctly read consumers? Graves believes that there is no substitute for live testing or trialing a concept in a real-life situation and observing what happens from a discreet distance.

People are able to walk or run without any conscious sense of triggering the complex sequence of muscular contractions required in those activities. In fact, the more efficient and familiar a process is, the more likely it is driven outside of conscious awareness. Therefore, with a process such as shopping that takes place in a familiar store with row after row The market research industry has gone on unabashed; compaof familiarly branded packages, there is a strong argument to be nies still believe that reassurance can be found in the exchange made that the process of making of corporate questions for consumer answer and politicians decisions about buying routine that public opinion can be gauged from a poll or focus groups. products occurs without conscious involvement. Determining how to live-test products, services, and It is ironic that businesses spend large sums of money marketing communications is the only reliable way, asking customers what they think of them, when short of a full launch, to evaluate consumer response. the greatest success that a brand might have is to be Live tests can be expensive and the results might not selected without conscious thought. Peoples minds match a full launch, but it is less costly in both dollars have vast amounts of data they rely on to make deciand reputation than a full launch. With appropriate sions, yet they have no direct, conscious access to observation of what consumers do in response to a those processes, which is a problem when businesses live test, and if it is appropriate to compare results are expecting customers to respond accurately in with the status quo, it is possible to gain genuine research. insight. The fact that people cannot accurately account for what has influenced their behavior does not stop them from creating reasons that appear to account for their actions. The conscious mind is highly practiced at wrapping behavior in a veneer that suits peoples

About the Author

Philip Graves runs his own consultancy, Shift, and is an associate at Frontier Economics. He has advised many international businesses, including Comet, Whirlpool, Dr. Maartens, Virgin Media, Hotpoint, and Pepsi.

When research fails to recognize the importance of consumers unconscious responses, it leads to a flawed idea that gains validation and is implemented. Companies can spend a long time looking within the complex commercial chain for the reason sales are not meeting expectations. The thought process being: We know consumers like it because of the research, we must have done something else wrong. Live testing requires people to make real choices that have real and measurable consequences: the risk and opportunity cost of selecting a new product over an existing one; the requisite shift out of engrained patterns of behavior to notice something different; breaking through the unconscious filtering of visually busy retail environments; and the distractions of
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Consumer.ology

Philip Graves

shopping in real life. There are some common psychological traits that typically influence behavior, but because they are part of unconscious processes, will not factor in when a person is asked point blank about their product choices. However, in a well-conducted live test, these traits should manifest themselves. Some of these common traits include:

new products; may have reduced sensitivity to lighting and music; and, depending on circumstances, may have the desire to abandon the shopping trip altogether. Helpful salespeople may also exert an influence on consumers purchases.

Other things that impact consumers decisions that cannot be accounted for in most research settings are in-store advertising and product placement. The artificial nature of the research environment can be Loss Aversion: Despite positive mental associaresponsible for not flagging things that would show tions with trying new things, people often go with up in a real shopping experience. As an example, the same old thing. For some reason, people feel Heinz developed an All Natural Cleaning Vinegar, loss more powerfully than gain. which seemed logical because people already used Easy Usually Wins: The unconscious mind likes vinegar for cleaning. It tested well in research, but the path of least resistance, so people tend to like when placed in a supermarket and in the context of what is easiest and most familiar. the companys food products, it became hard for consumers to reconcile their culinary Ultimately the reasons that are consciously hypothesized for associations with Heinz to that of a cleaning product. consumers choices end up being a reflection of the desire to

see ourselves as fundamentally conscious creatures.

The Crowd Matters: Despite the fact that it runs counter to how most people view themselves, humans have a propensity for copying what other people do. Priming: It is impossible to underestimate the importance of what people encounter first and how it shapes the ongoing opinion of a product or experience.

The fact that consumers are unaware of how environment and context affect their behavior and attitudes does not stop them from offering justification for their shopping behavior. Graves says, However honorable conscious intentions might be, consumers cannot help but create and perpetuate myths about why they buy what they do when the researchers questions are asked. The environment of market research cannot account for the context of the true consumer experience, and consumers cannot access the unconscious processes that influence their shopping decisions, so there is little chance to gain a true understanding of consumer behavior. The best place to truly understand consumers is when they are in their natural habitat.

The Consumer in Context

Research has shown that consumer behavior is influenced by the elements of the retail environment. Things such as music and lighting can affect mood, and as a result, actually cause people to spend more. In contrast to the atmosphere of a retail center, which is usually familiar and close to consumers homes, research is often conducted in a place that is convenient for the researchers and in a setting that is totally unfamiliar for consumers. Another aspect that is often out of context in consumer research is who else might be present when a consumer is making a product or service choice. For instance, is the consumer shopping with a young child? If so, this could have quite a bit of influence on the adult concerned. They may or may not notice

What Consumers Do
The potential importance of the environment when purchasing products or services is a powerful argument for conducting live trials. Observing consumer behavior provides the opportunity to leave all of the environmental variables in the mix. Whether it is a wish to understand consumer thinking with the goal of developing better products or communication, or the need to get a better understanding of why a particular initiative is or is not working, observing
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Consumer.ology

Philip Graves

consumer behavior can be very revealing. Understanding why consumers are acting in a particular way means reading the environment the way consumers unconscious minds do. This involves observing what is there, and paying attention to what is on the peripheral that might be contributing to consumer behavior. Light levels, ambient noise, odors, other products, colors, music, interior design whether artificially created or naturally present can influence how someone feels and what they choose to do.

Making Choices: Observation helps identify the consideration set that people are using, and in the case of large-scale choices, how they are managing to negotiate those choices. Observing the products that consumers are choosing between helps reveal the consideration set they have created. Follow the eyes: It can be important to know what people look at first when they are buying. Where they glance first can be important because it can prime the way they perceive everything thereafter.

At the most basic level, behavioral data is truth. It is what If you want to know why someone does or does not buy, you someone really does in a given situation. With the single caveat have to understand how the environment shapes behavior. that consumers do not know Divorcing the quest for understanding from the context in they are being observed, what which it takes place is a recipe for leading yourself astray. occurs when observing consumer behavior in context is the result of the conscious and There is a caveat to observing consumer behavior. unconscious processes at work. While accurate obserGraves suggests believing in nothing heard from convation will reveal exactly what is occurring, the why sumers, half of what is observed of consumers, and requires a degree of inference, but at least in an obseralmost everything that the sales data says consumers vation or live test, the focus is entirely in the area of have done. consumer activity and not reliant on a consumers The Irrelevant Consumer rationalization of their experience. Despite the shortcomings of current market research, When studying consumer behavior there are two basic a lot of time and money is spent on it. When market requirements. The first is the need for covert observaresearch is employed, the only concerns raised are tion; when people know they are being watched they usually about the quality of the research, the validbecome more self-aware and are likely to change their ity of the sample, and the statistical significance of behavior. The second requirement, which is a bit more any differences in the data. However, even with pure of a challenge, is the issue of observational objectivity. statistical methodology, the results can still be misThe biggest risk with observation is confirmation bias, leading. There are many reasons why most questions the tendency only to see or attribute relevance to the should be avoided. Some of those reasons are that observations that fit with or confirm preconceptions. questions can: One way to neutralize this is to separate the observing Tell people what to think about and inferring parts of the process. When observers are focused only on recording the events, there is far less Change what people think. chance of jumping to conclusions. Persuade people to like something. When observing consumer behavior, there are vari Artificially deconstruct the consumers experience ous things to look for, including: Reinforce existing opinions Physical Behavior: Look at where consumers Any one of these reasons can cause misleading walk, where they stop, what they touch along the research results, but when they work in combination way, who they talk to, and how much time they with one another, the impact can be far greater. The spend with products. These measures help inditypical process of asking consumers what they think cate the degree of consumer engagement.
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Consumer.ology

Philip Graves

is either a one-off exercise or else repeated in a consistent fashion, resulting in no point of comparison. The research process creates a focus that ordinarily does not exist and wraps a frame around it that cannot help but shape the outcome of the results. In fact, the dynamic aspects of personality are largely ignored by consumer research as it prefers instead to subscribe to a constant or average theory of personality. This theory says that people will do more or less what they do, wherever they are and whatever else is going on. This is inherently flawed because people operate on the basis of cause and effect contingencies that are dependent on the prevailing events at the time and on how the events are unconsciously processed and consciously interpreted.

results. Leading questions are usually frowned upon as they are viewed as a potential source of bias. However, in the right context, leading questions can provide more powerful and more accurate insights than balanced ones. When observation of consumer behavior has produced behavioral evidence, leading questions can give consumers tacit permission to say something that they otherwise would not. For example, if it has been observed that one area of the store is confusing to consumers, framing the question by saying: Most people find this part of the store really confusing. Why do you think that is? takes the personal aspect out of the question.

Powerful insights can occur where questioning reveals a contradiction Ultimately, the process of asking someone to evaluate somebetween behaviors, attitudes, and thing can change how they actually feel about it, or how they experience. For example, a confeel about another thing that you talk to them about subsesumer might say that they made their purchase because it was the quently. best product, but questioning may reveal that they did no research prior to going to the Relevant Answers store, and observation may show that they spent very While asking a consumer to think about unconscious little time choosing the product. This could indicate processes out of context can lead to questionable a stronger brand affinity than the consumer wants to results, there is a time and a place for asking consumadmit. ers questions. The best time is when the behavior of the person being questioned has been observed. In Understanding the Crowd that case, any claims made by the consumer can be Just as consumers are unaware of how the physical compared and contrasted with what was seen and, to environment influences thoughts and behavior, they an extent, validated. It is best to ask questions when are also unaware of the subtle but significant influthe consumer is as close as possible to the environence that the actions of other people have on them. mental and contextual elements that influenced the Shaping what a crowd thinks does not require a large behavior. It is also advantageous to ask the questions number of people. shortly after the consumer choice or experience has Focus groups have appeal because of the belief that taken place. they can elicit in-depth information on a topic by Graves believes that it is reckless and misleading to taking a group of people and facilitating a discussion work on the principle that consumers can articulate where insights will emerge about what people think what they think and feel. Instead, he believes that about a product, service, or communication. The it is best to design investigations into consumers theory is that skillful moderation and comments from thoughts, feelings, and behavior on the basis that they other respondents will trigger additional thoughts cannot articulate what they think. When questioning from participants and the group will explore their coldoes become necessary, he advocates treating what lective thoughts on the issue at hand. the consumer says with enormous skepticism. That Group influence is one factor that can derail the being said, knowing when to question and what types market research process. Just hearing someone of questions to ask can help ensure more accurate say something can cause people to follow a similar
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Consumer.ology

Philip Graves

mental direction, not to mention the fact that humans have a tendency to copy what others do without realizing it. Another factor of group influence that can lead to questionable research results is the fact that people often change their minds to fit in with a group and with the prevailing majority. When any group of people, including consumers, work together to reach a conclusion about something, there is a risk of groupthink. Group-think is when groups reach a decision with insufficient critical analysis and with too much deference to the prevailing point of view.

with consequencespeople experience anxiety. Will the decision be a good one? The unconscious mind works through the potential risks of what is being considered. Once a decision is made and nothing bad happens, then a sense of faith ensues about that choice. What consumers really choose, as opposed to what they think they will choose, has much to do with what is easiest, and that often translates into what they have always done. This is one way advertising changes what people buy; through repeatedly seeing a product in an advertisement, it becomes unconsciously familiar and correspondingly more familiar.

Besides the danger of group-think, the environment of the market research study can also lead to flawed results. The typical research facility does not at all resemble the When considering emotional responses, such as how sometypical consumer environment. one feels about a brand or an advertisement, there is a strong Research rooms are usually argument for only paying significant attention to their instancomfortable with chairs, coffee tables, and perhaps a television, taneous reaction. but they also have one wall that Gaining an Edge is replaced with a one-way mirror. On the other side Ultimately, research success will be determined not of the one-way mirror are observers who will watch by how thoroughly organizations research their the proceedings. In order to make the observers inviscustomers but by how astutely they understand the ible to the research participants, it is necessary to keep responses to what they are currently doing and how the research room very brightly lit. In addition to the quickly they can implement alternatives. Graves unnaturally bright lighting, there are also cameras realizes that the desire for reassurance about a new and microphones set up as well as signs alerting parproduct or service will lead to the continued use of ticipants that they are being recorded. market research. How, then, is it possible to be conConsumer Futurology fident about the results of a market research study? When considering the future, people routinely fail to By evaluating five aspects of the research process, it take into account everything that is going on in their is possible to gauge how much faith can be placed life at a given time and instead focus on the issue that on the conclusions. Graves proposes the use of the is being considered. They think too much about how AFECT (Analysis of Behavioral Data, Frame of mind, something could happen and too little about how and Environment, Covert Study, Timeframe) criteria for why it might not. determining the confidence that should be placed in Typical market research asks respondent to consider research findings. every aspect that the company commissioning the Analysis of Behavioral Data research wants to consider, however fleeting and superficial the respondents involvement with each of The first thing to determine is if the results are based those aspects would be in real life. The more people on an analysis of consumer behavior. Sales data and focus on the aspects they are being questioned about, behavioral observation should inspire the most conthe more likely they will ignore factors in their own fidence. Gathering such data ensures that research life that will have a bearing in the issue when it comes is derived from a behavioral focus, rather than from time to make a real decision. questions about conscious feelings and attitudes, and When asked to make a new decisiona real one offers the best prospects of identifying unconscious associations and emotions.
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Consumer.ology

Philip Graves
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Frame of Mind When consumer evidence is gathered covertly from observation in the retail environment, the consumer mindset takes care of itself. However, when research has been conducted without reference to the way consumers behave when interacting with the product, service, or communication, it should merit no greater confidence than if it had been obtained by interviewing the wrong target audience. Environment Another question to consider is the context of the research. If behavioral data is unavailable, then at the very least the research should have been conducted in the appropriate consumer environment with the appropriate contextual influences present. In the case of products, have the price, packaging, and competing products been included? Were unrelated products that would normally be available in the vicinity of the tested product be present? The more the research scrutinizes one aspect of the total consumer experience, the less likely it is to reflect true consumer response. Covert Study Whatever the basis for the information, it is important to consider how obvious the focus of the research was to the consumers concerned. When it is apparent, the likelihood of influencing the response increases dramatically. Putting the subject matter into the path of the research respondents creates a heightened sense of self-awareness that is likely to change behaviors and responses. Timeframe Any time the unconscious mind is involved, a quick response is much more dependable. In consumer research, a detailed, in-depth, considered response is not more dependable than a quick answer. A process that turns a consumer experience lasting a few seconds into a prolonged discussion is not reliable. The AFECT criteria provide a means of gauging the extent to which consumer research findings are an artificial product of the research process or an accurate reflection of consumer reality. The criteria are a good tool to use when considering if an investment in research is likely to be beneficial.

Features of the Book

Reading Time 3-5 hours, 216 pages Market research has become the accepted standard for judging new products, services, and communications, but as Philip Graves points out in Consumer. ology, it is a flawed process that produces unreliable results. For anyone who relies upon or conducts market research, this book is an invaluable tool that details what to look for and how to conduct market research that will produce results that reflect true consumer behavior. Graves outlines why scrutiny should be directed at understanding consumers themselves rather than in summarizing claims about consumer behavior. The book also reveals what drives customer behavior and how to gain genuine insights into customer behavior. With the AFECT criteria, it is possible to judge the merits of any research study.

Contents
Foreword by Kevin Hogan Overture: The Moment of Truth Chapter One: Understanding the Unconscious Mind Chapter Two: Reading Consumers Chapter Three: The Consumer in Context Chapter Four: What Consumers Do Chapter Five: The Irrelevant Consumer Chapter Six: Relevant Answers Chapter Seven: Understanding the Crowd Chapter Eight: Consumer Futurology Chapter Nine: Gaining an Edge Epilogue Notes Index
Acknowledgments

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Consumer.ology

Philip Graves

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