Backward Marketing Research
Step 3: Prepare a Prototype Report
Management should ask itself, “What should the final report look like so that we’ll know exactly what moves to make when the re- port is in?” The collaboration between the researcher and the man- ager should intensify and prove dynamic and exceedingly creative.
Scenario writing is a good technique for developing ideas for the contents of the report. The initiative here lies with the researcher who generates elements of a hypothetical report and then confronts management with tough questions like, “If I came up with this cross- tabulation with these numbers in it, what would you do?”
The first payoff from this exercise arises from improvement of the research itself. These prototype tables can take the project for- ward by sharpening the decision alternatives and backward by in- dicating the best design for the questionnaire or pointing out how the analysis of the findings should be carried out. (See Table 4.1 for an example prototype table.) The forward effect is evident in the following case:
A manager marketing a high-priced service is considering cancelling a discount for multiple purchases because she thinks that most people taking advantage of it are loyal cus- tomers who are already heavy users, are upscale, and are largely price inelastic. Therefore, she speculates, the discount is just lost revenue. She is seriously considering dropping the discount altogether. To determine whether this is a sound decision, she needs to predict the responses of both old and new customers to the elimination of the discounts.
Suppose the researcher hypothesizes that long-time customers will be price inelastic and new customers will be price elastic. Re- sults from such an outcome would be like those in Table 4.1. Here,
we see that only 8 percent of her sales represents new customers and that eliminating the discount will have little effect on old custom- ers. These results confirm the manager’s decision to drop the dis- counts. However, reflecting on the results in Table 4.1 showing that new customers do respond to the discount, the manager thinks,
“What if we offered a one-time discount to consumers who have never tried the service?” In considering this alternative, the man- ager realizes that before she can reach this decision, she needs to know whether potential new customers can be reached with the special offer in a way that will minimize (or, better, foreclose) pur- chases at a discount by long-time customers.
This new formulation of the decision leads to a discussion of the results that indicates that the study really needs to ask not only about the permanent discount but also about a one-time discount.
The results of these questions can be captured in another dummy table showing responsiveness to the one-time discount by past pa- tronage behavior, as in Table 4.2. This table suggests that it does make sense to go ahead with the one-time discount.
As the manager reflects on this table, she realizes that she still needs a way of minimizing the chance that old customers will take advantage of the one-time discount. One way this could be accom- plished is by avoiding announcing the offer in media that old cus- tomers read or listen to. This indicates to the manager (and the researcher) that the questionnaire should also contain some ques- tions on media habits. And so it goes.
This pattern of presenting possible results and rethinking design needs can be very productive. The process can sometimes have unan- TABLE4.1 Hypothetical Sales Results Before and After Discount.
Sales at Sales at Number of
Discounted Price Nondiscounted Price Respondents
New customers 100 53 40
Old customers 100 92 460
ticipated consequences. Sometimes the researcher will present con- trasting tables pointing to exactly opposite conclusions, only to dis- cover that management is most likely to take the same course of action despite the results. This is usually a case for doing away with that part of the research design altogether.
Participation by the manager in this step of the backward re- search process has other advantages:
• It serves to co-opt managers into supporting the research work should it be criticized later.
• It deepens their understanding of many of the details of the research itself and their appreciation of both its strengths and its weaknesses.
• Working with hypothetical tables can make the manager eager for the findings when they do appear and ready to implement them.
• Working with contrasting tables makes it unlikely that the manager will be startled by surprising results, an outcome that sometimes causes manager to reject an entire study.
• Participation will reveal to management any limitations of the study. In my experience, managers are often tempted to go far beyond research truth when implementing the results, espe- cially if the reported truth supports the course of action they prefer anyway.
TABLE4.2 Hypothetical Sales Results Under Three Pricing Strategies.
Sales at Sales at Sales at
Discounted Nondiscounted One-Time Number of
Price Price Discount Respondents
New customers 100 53 76 40
Old customers 100 92 97 460