Guided by voices

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As b-to-b companies place more emphasis than ever on the voice of the customer, market research is playing a central role in product development, corporate positioning, advertising and other marketing communications efforts. ¶ To understand the customer and develop better ways of communicating with key audiences, marketers are increasing their spending on market research. Spending rose an estimated 7.5% last year over the $7.32 billion spent in 2004, said Laurence N. Gold, editor and publisher of Inside Research, which tracks market research spending in the U.S. Final data for 2005 were still being compiled at press time.

Spending on online market research in the U.S. totaled $1.18 billion in 2005, up about 17% from 2004, Gold said.

"Most market research is outsourced," Gold said. "It is very rare for companies to conduct their own market research." However, he added, one unmeasured area of spending is online research by companies that use the Web and proprietary technology to conduct market research with their own customers.

One example is Microsoft Corp., which uses as a market research tool. The site gets more than 200 million unique visitors a month.

" is a great research asset," said Mich Mathews, senior VP-central marketing group at Microsoft.

Mathews said more than 60,000 users on, including software developers and business and IT decision-makers, have volunteered to be part of an ongoing research panel that is available to participate in online surveys at any time.

The research effort, which the company has dubbed "Rapid Research," conducts studies on everything from users' media consumption habits to testing ad creative.

The panel was used to test different marketing elements for Microsoft's newly launched "People Ready" campaign aimed at the business market (see case study page 62).

In the past nine months, Rapid Research has saved Microsoft more than $600,000 in market research costs, said David Hamilton, director of [email protected], the unit responsible for developing marketing best practices and communicating them within the company.

Within Microsoft's marketing organization, more than 100 people are focused on market research, Hamilton said.

Other companies that do not have the internal resources or budgets to conduct their own market research rely on third-party vendors to assist them.

Computer reseller CDW Corp. has a fairly small market research department that is responsible for handling a variety of tasks for the company, from product positioning to customer loyalty studies.

"We outsource quite a bit," said Calvin Vass, senior manager of market research at CDW. He declined to comment on the company's market research budget.

CDW uses Millward Brown for brand equity research and secondary research from companies such as IDC, Gartner Inc. and AMI Research.

The marketer also taps into its customer base through a relationship with Communispace Corp., a market research company that creates online communities for businesses to use for market research, customer relationship management and other marketing efforts.

"Communispace has been a key research tool for us," Vass said.

"They provide the IT infrastructure and manage communities of customers for us."

Communispace has created five online communities for CDW: small business, midsize business, large business, K-12 and higher education.

The business panels have approximately 300 users each, and the education panels each have about 600 users. CDW recruits panelists by posting messages on its business segment sites, asking for volunteers to participate in an ongoing research panel. The users are then screened to make sure they fit the requirements. Once selected they participate in two or three online surveys a week, on everything from product features to ad testing.

"We are doing it to listen to our customers and to be more responsive to their needs," Vass said.

"Giving customers a voice is very strategic, particularly for b-to-b marketers," said Diane Hessan, president-CEO of Communispace, which has developed more than 200 online communities for clients. "Companies want to get more deeply connected with their best customers and understand what is important to them."

Hugh Davis, co-founder and exec VP of Greenfield Online, an online market research company, said clients are requiring data much more quickly than in the past in order to make strategic decisions in a rapidly changing business environment.

"With online research, you get access to a broader group of people, particularly from a b-to-b standpoint," Davis said.

"If you call a business guy during the day, he doesn't want to talk to you. If you call him at night, he doesn't want to talk to you. But if he's checking his e-mail at night, he might take a survey."

Greenfield's online panels allow clients to test product demos, simulate store shelves, test TV spots and conduct other types of research.

Some b-to-b marketers are adding third-party tools to improve their in-house market research efforts.

Boston Scientific, a medical device manufacturer, has about 25 people in its marketing science group, which is responsible for all market research in the organization.

The market research team works with marketing, new-business development, finance and R&D to help diagnose business problems and develop tailored research.

"Sometimes we use full-service market research vendors, sometimes we do Web surveys and other times we'll do face-to-face or phone interviews," said Carolann Augustine, group manager of marketing science.

Augustine said one of the challenges is quickly analyzing data from a variety of research sources to provide business intelligence. Boston Scientific uses a variety of data analysis tools, including Microsoft Excel, SPSS and SAS software.

"Identifying segments is extremely difficult using Excel," said Kim Goldman, senior marketing science manager at Boston Scientific. "It's manual, and often we couldn't figure out the statistical significance between different segments, such as physicians or administrators."

About a year ago, Boston Scientific purchased MarketSight software from Monitor Group to analyze data from a variety of primary research studies.

"It really helped us understand which segments to target," Goldman said. "You can see the behaviors and decision-making processes of different segments."

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