E-Focus Groups

6189 San Bruno Court Rohnert Park, CA
Phone: (888)-799-6208
Online Focus Groups:
Market Research in Web Time
San Jose Business Journal
November 1999

David Van Nuys, Ph. D.

The old saying, "The race goes to the swift," was never more true than in today’s 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 they’ve 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 beyond.

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, let’s 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 didn’t think to put on the check list? We’ve all experienced that straight-jacketed feeling on some questionnaire or survey in which we just weren’t being given the right alternatives.

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 customer’s 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 benefits.

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 moderator’s 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 don’t 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 project’s cost.

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 moderator’s 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 group’s 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.
The main disadvantages of online focus groups are that you sacrifice some depth of response and, of course, body language. In addition, online groups are not good for exploring very complex concepts or projects which require a high degree of confidentiality due to competitive concerns.

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. That’s why we’ve already bought the domain, VideoGroups.com!

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