One of things that separates the brilliant Direct-to-Consumer businesses from the ordinary is that they do a lot of customer research.
In this episode I speak to Natalie Thwaites who was a Research Director at Chime Communications and then an Associate Partner at Piper Private Equity where she worked on consumer research. She’s now a Research Consultant and Executive Coach.
We cover the benefits of research, how to select participants to take part, the advantage of focus groups verses individual interviews, moderating the group ourselves or getting an outside expert. She also tells us the pros and cons of the various formats from groups to interviews to survey and Zoom.
We also talked about adding a question to the omnibus survey to learn about the market and to measure awareness of your own brand.Also available on: or from your smart speaker.
Andrew Veitch: Welcome to the Joy of Marketing with me Andrew Veitch. This week, I’m joined by Natalie Thwaites, who’s an expert on research, and actually helped me with consumer research at Diet Chef. So welcome to the show.
Natalie Thwaites: Thanks so much for having me, Andrew, nice to see you.
AV: So I suppose the first obvious place to start is what actually is the point of research when when I’m running an e-commerce business? You know, why should I bother doing consumer research?
AV: Yeah, that’s interesting, because we had Freddy Ward on a couple of weeks ago from HelloFresh and he actually did do face to face selling of his product. Not really, because he thought it was something that was particularly going to scale the business, but just to give him the experience of speaking face to face with consumers about his product.
NT: To give him the experience and also like the consumers the experience, I think with often with DTC businesses, that there’s this feeling of perhaps retail or wholesale is dead. And actually, it’s not just about sales, it’s about brand awareness. It’s about having somebody in a shop, who can talk to people about your product and explain your service or your product to them.
AV: And certainly every time I’ve done research, I’ve learned something valuable and, and in fact, I mean, that is even where the name Diet Chef came from. efore starting the business, Kevin invited me round to his house for a few beers. And we thought we’d put on a DVD of a focus group. As |I guess you do when you’re having a drink with your friends. And th moderator asked the group, what would be your ideal way to diet? And one, one of the women said will it be to have my own Diet Chef who does everything for me. And of course, that’s where the name of the company came from. But it’s not something that we would have thought ourselves.
NT: There you go. And I think that’s a great, you know, great example. And I think from a practical perspective, research can help you find out what you don’t know, test what you think, you know, and confirm your hunches. So it’s not always going to give you a direct answer. But it can help you prevent making some quite wrong decisions, some expensive decisions, it can also just really de-risk decisions. So I think particularly when you’re thinking about creative campaigns or rebranding, it’s really important to get all of that in front of not just your customers, but people that you hate will become your customers. I’ve just recently actually done some some work for a non alcoholic beer business called Freestar. And they’re interesting because they’re a challenger brands, they’re doing things differently. And they are branded there even though don’t have alcohol in. And what we really learned from the focus groups was that they can’t play too far outside the category and the way they look and feel they need to still look like a beer. And it’s so interesting, particularly for businesses doing things a bit differently. Just understanding what that edge is, how different can you be before you’re so far out the category that people won’t consider you? So there’s lots of reasons why I think people should do research not just once they’re well within their businesses speaking to customers, but also when they’re thinking about launching their business. You know, is there really a need for this product? How big is this market? How much of it do we want to gain in terms of share? And where are those customers going to come from? So there’s, there’s so many points in the customer journey. And the business journey as well, where research can be helpful.
AV: Okay, so I’m completely sold, I’m going to do some research, how do go about selecting who is going to take part in it.
NT: I think it depends whether you’re going to be doing qualitative or quantitative research. So quantitative research is all about getting hard numbers and facts. Qualitative research is very much getting under the skin of those facts, finding out why people behave as they do thoughts, feelings, attitudes. Quantitative research, particularly if you’re a direct to consumer business, or have a strong online presence is actually fairly straightforward these days, because you’re lucky you’ve got a database so you can survey them. What’s really important to understand is when you survey customers, the people they’re going to take part I’m most often your most loyal customers. It’s something to consider because the way you incentivize people to take part in your survey will impact who fills it in. So if you are Diet Chef, and you offer them vouchers, for Diet Chef, they’re only going to fill it in if they love your product. If you offer them a cash prize, or an iPad or something more generic, you’d be more likely to get customers filling in the survey that are lapsed, or perhaps one time only users. What’s really important is to compare the data between those really loyal customers, and those customers that have come and gone to understand the differences between them. I think if you’re going to run focus groups or depth interviews, who to take part is a really important question. It depends what you want to find out, you need to have a set research objective, and then you need to design your sample around that. One thing to say and same with online surveys is that really loyal customers will probably sit there and tell you how much they love your brand. I think when you’re doing focus groups, the most important group speak to people that have either lapsed come and gone, or more importantly, your competitor’s customers. So get a group of customers in the room who are using your competitor’s products, these are the customers you need to convert these are these are the most precious growth opportunity really for you. Get them in the room, find out why they’re not using you, why are they using other people?
AV: Yeah, and I think when when you helped us with the research at Diet Chef, I think we had three groups, we had a group of people that had made some contact with us but hadn’t bought, a group of people who bought and didn’t like us, and a group of people and bought and loved us. And definitely, I don’t think we really learned very much from the people that loved us. But it was quite nice to do that having spent a few hours speaking to people that hated us.
NT: That’s the thing, it’s often not what you want to hear, right, the people that don’t don’t love you. But I would say those loyalists are an important group. If you’re thinking about product or brand stretch, or where you might go, we’re looking to do some quite future focus work, those loyal customers are really important because they’re further along their relationship with you then then your customers, I would say on the the non rejectors, so the non customers, it’s really important that they don’t reject you for any reason. So what you don’t want to do is have a group of people that sit there and say, I would never buy your product, because it’s too expensive, I can’t afford it, you’re not going to learn anything from them. So you need people who are aware of you but made a conscious decision to choose somebody else and not you for a particular product or service.
AV: Yeah, price is something very often hear as an objection, but my feeling always about price, is that it really means that people aren’t seeing the value of the product.
NT: Yeah, I think that’s one thing, but it just also depends on the sector. So if you’re, if you’re researching, say, quite a luxury sector, and there’s a high price tag, and it’s just outside people’s means, then you know, there’s there’s no point getting them in, and I suppose it’s also really exploring the difference between perceived value for money and price. So why is it that they don’t perceive you to be the value for that price?
AV: Yeah, absolutely. So obviously, traditionally, a focus group is used, rather than, you know, a one to one interview. So what’s the advantage of using a group?
NT: There’s lots of advantages of using groups. There are also advantages of speaking to individuals one on one to just to cover that off first. If it’s a particularly sensitive subject, if it’s something that’s quite, you know, really emotive or you need to speak to people about intimate details of their lives, then, you know, obviously one on one is better. Groups are great because they’re recruited with like minded people together. So you will get a group of people say that all young men, no children, work in certain professions, you know, your target market, because they’re all the same types of people, they have a natural bone when they come together as a group. What that means is you can quite creatively develop ideas with them, you can get them to bounce off each other and there’s a kind of a natural feeling amongst them that they’re in a comfortable space. And you can also help them to challenge off each other and you can bring in that truth. personality, so they feel very comfortable. I am, I actually always recruit like minded people, I think it works really, really well. And I, once I had some focus groups actually streaming into the head office of a well known retailer and had a group of young guys, I was quite young at the time as well. And all they did for the folk throughout the focus group, good example of where things go wrong is drink beer. And I should have put a stop to it sooner, it was just crazy. And but it’s a good example of how when you feel very comfortable, you’ll just be yourself. Not a good example of where something went quite wrong. And also I take all alcohol out of my focus groups now. The other thing Andrew about speaking to groups is that you can they can take place well, pre this crazy pandemic, in a research facility, such as the ones that we did for you guys, a Diet Chef. So it means that the business owners, or actually more broadly, the team can be behind the mirror, and they can listen to what’s going on. So when I say behind the mirror, there’s a two way mirror in these facilities, so people can be having a focus group on one side and watching the focus group in the other. And I think having business owners actually hearing their customers talk is everything, you’re hearing it from the horse’s mouth really brings all the research to life. So that’s the advantage of having groups together. On zoom now, it’s a bit different, I don’t think it works as quite as well. And I would say if you’re going to do Zoom focus groups, I would maybe only have three or four people in the group as opposed to like the traditional seven or eight. But it is cheaper. It’s quicker to organize, to lower your expectations slightly about how much you can achieve in that group. And you have to have a really good facilitator who can manage that group really well.
AV: Yeah, and I’d certainly backup, what you’re seeing about how powerful it is to hear your customers talking about you when you’re sort of sitting behind that mirror. And I’m also pleased to see that most of these facilities do actually have beer behind the mirror for the the organizers. Okay, so I guess the other thing then is, which again, you touched on a bit there, it was about the moderation and obviously, not providing alcohol is maybe one thing but should we just moderate the group ourselves? Or do we really need to get somebody in?
NT: Don’t moderate the groups yourself. It’s really tough to facilitate focus groups. And if you’re not trained in it, we tend to not be able to do it very well. I have seen people try and do it. There’s a few reasons why if you’re a business owner, it’s virtually impossible not to ask leading questions. And it’s virtually impossible to manage the group dynamic from a non judgmental and non bias perspective. The other thing is quite often in research, the findings can be quite hard to hear. So as the business owner, you’re bound up or even somebody that works within this business, you’re bound up in the emotion of that, that this idea is absolutely rubbish, I’m not going to buy this, it’s not worth that amount. I think also for the respondents, it’s important for the respondents and one of the jobs of the facilitator is to create a really safe, non judgmental space where they can be absolutely honest, and where they can view all their opinions and not feel like they have to hold back. Nobody’s going to insult your your baby when you’re holding it in their in their in your own arms, you know. So I would say it’s really important, but it’s not just the moderating. It’s also the analyzing. So if you run all the groups yourself, you can easily write up a two page document of the key findings, this what people said, but it’s not really about what people said, it’s about the insight behind that. So there’s a whole analytical stage of the research, which is really hard for people to do themselves, again, because they’re so close to the business, but also a professional researcher that has experience in your industry will be able to stand back and think what does this actually mean? You don’t need 50 PowerPoint slides of how you probably need one page of key killer insights that’s actually going to direct your business and help you grow.
AV: Yeah, absolutely. And of course, it’s always the case, in these sorts of groups that you do get people saying opposite things. So you need to sort of filter out to just to try and get to what people really mean.
NT: And you need to be able to manage that as well. I’ve had other instances where I’ve had clients who have literally knocked on the door and come into my room and said, that person is not my customer. I don’t think they’re representative and they’re throwing this group off. But that one person is really representative of why these people are leaving, you’re leaving your business and why you’re losing customers. But because it’s so hard to hear, and often it’s not believable. And you know, it’s really hard to not sort of get a emotive and bound up in it, of course.
AV: Yeah, absolutely. So is research something that you just do once or twice? Or is it something that should really be a regular, regular part of your business?
NT: My view is there’s certain metrics which are really helpful to track so quantitative metrics. So one of them would be NPS score which I know something, Andrew that you help your customers with?
AV: Well, absolutely. In fact, thank you for mentioning that, because one of the features on Machine Labs is a feedback survey, which will then which asks about NPS, happiness, with the product, range, shipping, customer service, and then graphs that monthly. But obviously, if you aren’t using Machine Labs, you know, it’s still relatively easy to set up a survey asking these questions and to track and graph it every month, which I would strongly advise everyone does.
NT: Yeah, that’s the thing. And I think it’s great that you’ve added on some additional questions as well as the NPS score. As you say, if you’re not using a provider that can help you with that there’s lots of tools and survey tools online that you can use, some of them are free, and some of them are paid. But there’s other kind of market things that I think are quite important to track things like brand awareness as businesses grow, and most importantly, actually awareness to conversion. So is that impacting on people actually, buying your product or service? DTC businesses are really good now at tracking acquisition costs and average basket size. So as well as tracking some of those. Also, think about one of the things we really want to track to understand how close people feel to our brand are the loyalty measures, such as you know, are they are you their favorite? How many other brands do you use in this space to continue considering what your kind of KPIs are in terms of measurement and tracking of customer closeness to your brand, I would do fairly regularly, I think the technical side sometimes off putting for these for this market tracking side, if you can use very, very good their called omnibus surveys, they happen every single month, you can pay, I think it’s 300 pounds a question to put on and you can get a snapshot of the market, doing that two or three times a year to see how the market dynamics are changing in your sector is really, really valuable. But then ad hoc research is also really important. And it should be used, I suggested that in quite a reactive way, the most important thing is, is that it has an objective, and somebody owns it within the business, and you know exactly what you want to get out of it. But if you’re thinking about a rebrand or thinking about launching new products, if you’re seeing shifts and sales data, and you’re not too sure why those are times where it’s great to do some ad hoc research really get under the skin of what’s happening, so that you can make the right changes or plan around that change.
AV: Yeah, and I mean, certainly, you know, I’ve used it a lot in my businesses. I mean, obviously, courier and shipping is something that’s very important in e-commerce. And generally speaking, the lower price couriers aren’t as good. So certainly we again, we did a lot of research, as we changed couriers, we looked very much at sort of customer satisfaction, and then we move that business decision from opinion as to what’s the best courier to use, to a fact, you know, based on based on data,
NT: And I think it just gives you that reassurance doesn’t it that you are doing the right thing. And although I think some people are almost put off research, because of the costs, often it can help you make decisions, which in the long run are going to really save you money or help you not waste money.
AV: Well, absolutely. And you know, we were spending probably close to a million a year on courier. So in fact, doing a little bit of research to make sure you’ve got the right supplier is absolutely worth it. So I guess we kind of covered some of this fairly briefly. But there are a lot of sort of different formats for doing research, you know, focus groups, surveys, which I guess can be face to face or online, phone and I suppose more recently, Xoom as well. So it’s what me the sort of pros and cons of these, these formats.
NT: I haven’t done any research or used any suppliers that do research on the phone for a long time. I’m trying to think when that might be applicable maybe for a very older audience or hard to reach audience perhaps.
AV: I think at Parsley Box we have for that 70 plus audience.
NT: Absolutely. And that’s a great example of of making sure that the methodology you use puts the respondent at the most ease so you know, of course that would work that work best for Parsley Box. And I’m sure people really enjoyed having those conversations as well, talking about the product and how it could be improved. Surveys, you can you can do quite quickly, cheaply, and you can write them yourself, although I often would suggest getting somebody professional to read over them. I find when people write their own surveys, they’re often really long. The kind of objective, what you want to get out of the survey is buried somewhere in there. And although I would say for short surveys, use your customer database, speak to your customers. My feeling is response rates are going up, people are more happy than ever to communicate with brands and tell them what they think and what they feel and they want their voices to be heard. So, you know, speak to your databases. For focus groups, Zoom focus groups, I think I mentioned, you know they’re no substitute for face to face. But they’re quicker to set up, they’re cheaper, you can still cover off a lot of in depth feeling and attitude, but you need to be really specific on your objective, because you cannot cover as much. So I actually can’t wait to get back into a facilitating face to face focus groups where you can use creative techniques, people can stand in the corner of the room against a proposition, that means most to them, you know, you can actually build out the energy in the room for kind of real creative work to take place.
AV: So I suppose, I guess, just as we’re coming towards the end of this, one of the really big questions that I often sort of worry about doing research, is this stated versus revealed preferences? Or I suppose in other words, do people tell the truth?
NT: That’s it? Yeah, that’s a very good question. So I think there’s ways of thinking about that. So when you are doing an online survey, then having answer options for people to give, and helps them to do kind of forces them to give an opinion, doesn’t it? And it’s helpful, because actually, you want to test specific things. Normally, in quantitative research, they’ve given them a choice of answer options. And, you know, surveys are anonymous. So I think making sure that people are reminded of that, that their their answers are not going to be attributed to themselves as an individual is really important. But also allowing people to write open ended in open ended boxes as well on surveys is a really good idea. Again, that comes down to having somebody who can work with the analysis of that. And what that means. What you find there, when you get research findings is that you’ll always have some kind of quite strange outliers, where people are clearly either going with the herd mentality what they think they should say, or they’re, you know, sort of just being open and honest, and being themselves, I think it’s the job of a skilled moderator or facilitator, researcher, to kind of pull that apart. In focus group situations, again, coming back to your point about should you moderate yourself, it’s the job of the facilitator to really make sure people are comfortable enough, and in a kind of safe space where they will talk their opinion. So I often say to people, there’s eight people in this room, if seven people think one thing and you think something different, you must stand up and tell us you must say how you feel, that’s why we’re paying you or not paying you to be here, to just go with the flow, we want to hear every single person’s opinion. So I think being really upfront with people about you know, that’s why they’re there. And that’s what we want to hear. Also being wary of, you know, the opinion of a couple of people, often my clients behind the glass, like, but I remember that one woman who said this, I never, that was one woman out of 48 people. And you know, actually, she was clearly having a bad day, you’ve got to also be practical and realistic about what people might say and what they actually think. So it’s also the interpretation is everything.
AV: And so Natalie, tell me about your move from research to coaching.
NT: Yeah, so I’ve recently entered a sort of phase two of my career, I’d say after nearly 20 years in research, I’m still doing bits of research, but I’ve moved into executive coaching, I was lucky enough to do an executive coaching qualification. And I’ve been really motivated by the number of founders of particularly consumer brands that I’ve met and work with, they haven’t really, I think, have a good understanding of the context. They operate in some of the challenges that entrepreneurs face. And I’ve really enjoyed the process of coaching many of these people to really help them through big transition moments in their their business and their personal lives as well. I think being a researcher, I like to form deep connections with people, my whole professional experience has been around creating an environment where people are happy to talk freely, and people seem to quite like talking to me. And I think the coaching space almost replicates the research space in a way where there’s a non judgmental space, there’s no agenda, there’s no bias. And coaching is all about exploring what’s important to individual, it’s about helping them with their personal development, overcome some of their barriers, increase their self awareness. And ultimately, when people work through these challenges or barriers in their professional lives, there’s an impact on the business, they’re better leaders and better managers. They go to work with a better attitude. They’re happy to be there. And and I’m really driven at the moment to support businesses from a people perspective, and really helping them focus on their own well being at work. I think there’s a real business case for focusing on well being. And I think executive coaching is just one way to support employees.
AV: That’s fantastic. Thank you very much for your time. This week. I’ve certainly learned a lot as ever.
NT: Thanks for having me.
AV: And if you have an e-commerce store and want to follow the marketing playbook I’ve used in my businesses, including research of course, then please install Machine Labs from the Shopify App Store. It’s free until you get a thousand customers. See you all next week on the Joy of Marketing.