The focus group: dying a slow death?

How much useful information can you get from a room full of twelve people being paid $75 to eat cookies and talk about a product, place or campaign?

According to a recent Catharine Taylor column in Social Media Insider, the focus group is dead. Taylor points out that focus group testing failed to predict customer outrage over Tropicana’s packaging change, the complaints of baby wearing moms about a Motrin advertisement, or the howls of protest over the Sci Fi channel’s name change and Facebook’s new terms of service. According to Taylor, focus groups are “contrived” and encourage companies to listen to “customers who were either not invested in their brand very much or not invested in it at all.” Taylor comments that “the very idea that a focus group is valuable is ridiculous -- when compared with the real conversation taking place among the people who really care about your brand.” Is Taylor right? Can the focus group, often as stale as the potato chips served to participants, really be replaced by following the conversations of brand loyalists on blogs, Twitter, and Facebook?

Focus groups can indeed be a problematic way to get information. Participants are often distinguished more by their desire for a cash stipend than by their insights. Some people habitually lie about their background and past participation in focus groups in order to gain access. There is little that is natural or realistic about a forced discussion conducted in a bland office room. Often the companies conducting focus groups have a desired result, and interpret the data selectively to support their preferred outcome. However, as participants in the lively comments following Taylor’s post point out, the marketers can’t only listen to the opinions of the most intense fans garnered via social media channels, because they could be overly intense and atypical. In addition to paying attention to loyal customers via social media, marketers should be devising ways to make focus groups more relevant, realistic, and reasonable.

Our argument is that focus groups can play a role in information gathering, but are too far removed from reality, and that being

Message to retailers: stop hyperopia now!

Bill writes: Is the American consumer dead or just dormant? An incessant barrage of news reports suggests that we have officially begun a new age of frugality, trading shopping mall binges and dinners out for saving accounts and home cooked meals. Shoppers are clipping coupons, switching to store brands, and picking out cheaper cuts of meat. The tried-and-true, knee jerk way for retailers to appeal to the newly frugal customer is to compete on price by issuing coupons and holding yet another sale. An intriguing article today in the New York Times suggests they might want to pursue a smarter alternative.

According to the story, we are experiencing a rise in a phenomenon that consumer psychologists call “hyperopia,” or excessive obsession with preparing for the future. According to the piece, we’re likely to regret our excessive frugality. “People feel guilty about hedonism right afterwards, but as time passes, guilt dissipates. At some point there’s a reversal, and what builds up is this wistful feeling of missing out on life’s pleasures,” according to Ran Kivetz, a professor of marketing at the Columbia Business School. The story reports Kivetz and a colleague found that consumers who were asked to imagine how they would feel about their purchases in the distant future shortly before Black Friday spent more money and bought more indulgent items than consumers who were asked to imagine how they would feel the following week. In the fable of the Grasshopper and the Ant, Aesop described “two types of people: the virtuous Ant who saves for the winter and the improvident Grasshopper who’s punished with starvation.” Another consumer study found that even the most disciplined Ants found ways to “pre-commit to indulgence” -- more than a third of participants selected a less valuable spa gift certificate instead of cash so that, as one participant wrote, “I’d have to pamper myself and not spend the $ on something like groceries.”

Retailers need to change how they think about their stores. If they pursue a purely transactional approach, merely bringing in merchandise and promoting it in hopes of a sale, they will miss an opportunity to appeal to the more hedonistic Grasshoppers among their customers. Retailers might consider finding their Grasshopper customers, inviting them in for open houses where representatives from the retailer and various manufacturers demonstrate products and experiences. These open houses would allow people to come into stores and see, feel, think and experience without obligation. Retailers could give the visitors a small gift certificate for use at another time. This would appeal to the indulgent, hedonistic Grasshoppers, and even to the more frugal Ants, awakening the “inner Grasshopper” in all of us.

Other thoughts on treating hyperopia?