David Van Nuys, Ph. D.
The old saying, "The race goes
to the swift," was never more true than in todays hi-tech marketplace.
The company that grabs that first big hunk of mind share is likely to prevail,
even though the subsequent competition may have a better product or service.
Consequently, everyone is racing to be first out of the gate. This pressure
to be first (and, then, biggest) has led to such things as announcing products
long before theyve been released, selling products or services at a loss
or, even, giving them away for free all to build market share. Along with
this has come tremendous pressure to accelerate all phases of business development
from raising the necessary capital, to product development, to marketing, and
In this quick-draw, fastest-in-the-West
shootout, you need information about your target and you need it fast. Traditional,
face-to-face focus groups have long been a marketing research tool of choice
for decision-makers under the gun. A large-scale quantitative study might be
more scientific but it is also likely to be both more expensive and more time-consuming.
When executives have to make a fast decision, they frequently decide to commission
focus groups, knowing that some information is better than none. Capitalizing
on recent technological advances, online focus groups are the latest trend in
this research approach, offering even greater speed and cost advantages.
Before describing the details of
online focus groups, lets back up for a quick review. Basically, market
research splits into two major branches, quantitative and qualitative. Both
are valuable. Each approach has its own advantages and disadvantages.
Quantitative research typically involves
very large random samples, or scientifically stratified samples, and tends to
focus on answers to objective questions, as in surveys, or observations of actual
behaviors, such as number of clicks on a web site. If it is carefully designed
and executed, the primary advantage of quantitative research is that it is generalizable.
One can make predictions, with a high degree of probability. Quantiative research
is particularly good for such things as estimating the size of a market, predicting
the percentage of customers who will have certain attitudes or opinions, doing
trade-off analyses of price vs. features, and so on. The downsides of the quantitative
approach tend to be cost and time, as mentioned above. Furthermore, because
of methodological requirements, quantitative approaches tend to squeeze the
customer into a box, compared to more open-ended approaches. It can tell you
that a certain percentage of customers like or dislike a certain feature and
even provide an opportunity for those customers to check off one or more reasons
underlying that bias. But what about the reasons you didnt think to put
on the check list? Weve all experienced that straight-jacketed feeling
on some questionnaire or survey in which we just werent being given the
Qualitative research, on the other
hand, is open-ended by its very nature. Qualitative includes not only traditional
focus groups, but also one-on-one in-depth interviews, ethnographic studies,
telephone interviews, online groups, and online bulletin boards. Other than
the speed and cost benefits already mentioned, the advantages of qualitative
approaches are that they allow insight into the world of the customer in the
customers own language and terms. A deep understanding of your customer
can lead to fundamental insights that impact product design, feature sets, product
positioning, marketing communications, advertising execution, and so on. For
example, in a recent study we conducted for a medical software firm, the internally
favored product prototype was abandoned in favor of another after the clients
heard physicians react to three prototype ideas. That company turned on a dime
based on what they heard. Drawbacks of the qualitative approach are that success
is very much dependent on the skill and sophistication of the research consultant
and that the sampling does not permit scientific prediction. Focus groups, for
example, are not good for estimating market size. On the other hand, focus groups
are an excellent vehicle for understanding how to translate features into customer
As mentioned above, both approaches
are valuable, especially if you are inclined to believe the market. Roughly
$12 billion was spent worldwide on market research consulting in 1997, with
$4 billion of that being spent by U.S. firms. That $4 billion was divided equally
between quantitative and qualitative.
Now, back to the newest wrinkle in
qualitative research, online focus groups. A growing number of companies are
paying consultants to conduct online focus groups. This approach offers a number
of advantages. Nobody has to leave home. The respondents can participate from
home, using their home computers. The moderator can conduct the groups from
home or office. Likewise, the clients can view the groups from their own homes
or offices, and may be geographically dispersed. Potentially, this can save
a lot of travel money. Many traditional focus group projects involve travel
to a number of cities and/or countries. This can run up big airline, taxi, food,
and hotel bills to cover the moderators expenses, as well those of however
many clients go on the junket. With online groups, you can get a national or
international sample, with no travel costs. In addition, there are other savings.
The marketing research consultant can lower their fees somewhat because they
dont have to be concerned about travel time. Similarly, the incentives
paid to respondents for their participation can be lower because no travel to
a local research facility is demanded of them.
Our own comparative analysis suggests
that most consulting companies are offering online groups at about 20% less
than they would charge for face-to-face groups. This 20% savings is in addition
to any travel savings. If, as a client, you are able to provide a list of potential
respondents with phone numbers and e-mail addresses, or you are able to recruit
the respondents yourself, then the savings become even more dramatic. Generally,
finding and recruiting the respondents accounts for about 20% of a projects
Traditional face-to-face groups are
usually held in special field research facilities with one-way windows, recording
equipment, and so on. Inasmuch as these real rooms have to be rented, you might
expect further room-rental savings in an online approach. In most cases, however,
this does not occur. The reason for this is that we end up having to rent a
"virtual room" from companies that have rushed in with specialized
software infrastructure to support this kind of research.
The virtual room can be accessed
through any web browser. The functionality is basically that of a web chat engine,
except that there are a number of enhancements for focus group use. With the
virtual facility our firm uses, there are actually three virtual rooms: a respondent
waiting room, a client room, and the focus group discussion room. Respondents
gather in the virtual waiting room just before the group to meet one another
and get a feel for the controls. In addition, the moderator can mingle with
the respondents in the waiting room or, lurk there unobserved, to decide who
to invite into the discussion room. Moreover, clients can communicate with one
another privately in the client room, as well as observing the interaction taking
place in the discussion room. Clients can also communicate with the moderator,
the communication being visible on the moderators screen but not on the
respondents screens. In the virtual discussion room, the screen is split
so that the moderator can display any web pages of his or her choosing for evaluation
by the respondents. Thus, any visuals can be digitized and put on web pages
for the groups reaction. This feature also makes online groups an ideal
vehicle for evaluating e-commerce web sites.
Online groups work best with 6 or
7 respondents and should last 1 to 1 1/2 hours. Face-to-face groups typically
utilize 8 to 10 respondents and run 1 1/2 to 2 hours.
Clearly online focus groups make
a lot of sense when the topic relates to high-tech products and services. One
of the things that adds to the speedier turnaround of online focus groups is
the availability of an immediate transcript of the session. In addition to savings
on time and cost, another advantage of online focus groups is that respondents
tend to speak very freely since they can't see one another. Many moderators
have noted that respondents who would be quiet in a traditional focus group
tend to come out more in this situation.
They are not suitable for every project
but a growing number of clients are finding online focus groups well suited
to their objectives, especially for high-tech products and services.
As broadband services begin to proliferate
and trickle down to ordinary consumers, I predict that we will be doing online
video focus groups within the next five years. Thats why weve already
bought the domain, VideoGroups.com!
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