Lean Market Analysis

21.02.2015 Dr. Ute Hillmer www.better-reality.com

Market Research

Lecture

SIBE 21.2.2015

Dr. Ute Hillmer


Dr. Ute Hillmer ist Experte in der Vermarktung erklärungsbedürftiger

Produkte und Services, mit einem Schwerpunkt auf

neuen Dienstleistungen und Innovationen.

Was genau ist es, das Ihre Kunden suchen, wenn Sie Ihr Produkt

kaufen? Worauf kommt es Ihren Kunden besonders an?

Sie wissen es? Sind Sie sicher?

Begeisterte Fan-Kunden sind weder Geniestreiche noch Glücksache.

Sie basieren auf ganz, ganz viel detailliertem Kundenverständnis und

einer sehr konsequenten Umsetzung.


The New Market Research Manifesto1. New media allows for new methods in market research

2. New management methods require new methods in market research.

3. Learning first hand about the customer, the value he is willing to pay for and to develop a product or service that delivers this value is called CUSTOMER DISCOVERY.

4. Customer Discovery is NOT ABOUT statistically relevant answers. It is about the questions: Where do we find hints and patterns what our customers want and what they are willing to pay for

5. Customer Discovery is all about fast, agile and lean.

6. Customer Discovery is a way to built market focused innovations, that don‘t take forever and that don‘t eat an endless research budget.


This lecture is about…

• Understanding why market research is changing

• Understanding customer discovery

• The 5 big Q‘s of market research

• What do you want to learn?

• Who do you want to learn from?

• How will you get to them?

• How can you ensure to be effective?

• How do you make sense of what you learn?


Agenda 1. Why does MR matter?

2. Why is MR changing?

3. The big 5 Q’s of Market

Research:

1. What do you want to learn?- B-Model and Value Proposition Exercise

2. Who do you want to learn from?- Your typical customer

- Your early adopter

3. How will you get to them? - The Basics of Market Research

- Overview on Methods

- Google Tools for Market Research

(by Jens Tonnier, wolter eMktg.)

- Social Media Monitoring

4. How can you ensure to be effective?- Changes in Market Research

- Interviews: Talking to People

- Afternoon Exercise

5. How do you make sense of what you

learn?- Testing and re-testing our “product”


Why does

Market

Research

matter?


Q1: What do you want to learn? (Purpose)

• Size of the market

• Market trends

• Forecasting

• Planning

• Evaluation of

Strategies/promotions

• Assessing marketing mix

• Identifying market segments

• Identifying consumer needs

• Identifying competition

• Identifying opportunities/gaps in the market

• Reduce riskCartoon copyright of Giff Constable, „Talking to Humans“


A new product introduction, a new business:

How do you know your most important questions?

• What are the assumptions you are making?

• From those assumptions, what are the most important and most

risky ones?

• E.g. the VALUE you provide to your customer:


What are your most important and most risky

assumptions you are making?

• E.g. the VALUE you provide to your customer:


What are your most important and most risky

assumptions you are making?• How you reach your customers

Quelle: businessmodelgeneration.com

• How you make money


Business Assumption Exercise, 20 Minutes

1. Getting ReadyGroups of 3-5 people

Agree on your new product idea: you plan to develop (choose one)

• a Dating App,

• a Sports Appointment App,

• or a Car Sharing App

2. Go along with the Q’s given on the next slide and agree on a business model how the app will stand out from the rest and how it will generate customers + revenue

(be creative and wild, have fun with it! It’s just an exercise)

3. Write down the answers to the questions and find the key 5-7 assumptions you are making that are critical for success and especially those that are highly speculative.

They are your research priority!


Business Assumption Exercise (cont.)

Find your key assumptions• My target customer will be? (How would you describe your primary customer? Archetypes?)

• The problem my customer wants to solve will be? (What are they struggling with and what need is unfulfilled?)

• My customers needs can be solved with? (be concise ; an elevator pitch of the solution)

• Why can‘t my customer solve this today? (What are the obstacles?)

• The measurable outcome my customer wants to achieve is? (What measurable change in your c‘s life makes

them love your product?)

• My primary customer acquisition tactic will be? (most likely you have multiple mktg. Channels, bit 1-2 will

dominate)

• My earliest adopter will be? (remember: no mainstream without early adopters)

• I will make money(revenue) by? (pick the primary ones)

• My primary competition will be? (direct and indirect competition)

• I will beat my competitors primarily because of? (what truly differentiates you?)

• My biggest risk to financial viability is? (what could prevent from breaking even? Can you de-risk something?)

• My biggest technical or engineering risk is (is there a major tech. challenge that might hinder building the

product?)

• What assumptions do we have that, if proven wrong, would cause this business/product to fail?

Then: Mark the assumptions that will have a large impact on your business

Mark the assumptions that you feel highly uncertain about

They are your research priority!


Schlüssel-Partner• Wer sind unsere

Schlüsselpartner?• Wer sind unsere

Hauptlieferanten?• Welche Ressourcen beziehen

wir vom Partner?• Welche Aktivitäten führen

unsere Partner aus?

Wer / Wie / Was ? Business Model Canvas

Wert-Versprechen

• Welchen Mehrwert bieten wir unseren Kunden?

• Welche Kundenprobleme lösen wir?

• Welches Bündel an Dienstleistungen/Produkten bieten wir unseren Zielkunden?

• Welche Kundenbedürfnisse befriedigen wir?

Kunden-Segmente

• Für wen schaffen wir einen überzeugenden Mehrwert?

• Welche sind unsere wichtigsten Kundensegmente?

• Massenmärkte, Nischenmärkte, segmentiert, typisiert, multi-sided

Haupt-Aktivitäten• Welche Aktivitäten schulden

wir durch unser Wertversprechen?

• …unsere Vertriebskanäle?• …unsere Kundenbeziehung?• …die Einkommensströme?

Vertriebskanäle• Wie wollen Kundensegmente

erreicht werden?• Wie erreichen wir sie heute?• Wie sind Distributionskanäle

integriert?• Welche sind am

Erfolgreichsten?• Welche sind am

Kostengünstigsten?• Wie integrieren wir Kanäle mit

Kaufprozess d. Kunden?

Haupt-Ressourcen

• Welche Ressourcen benötigen wir zur Erfüllung des Wertversprechens?

• …unsere Vertriebskanäle?• …unsere Kundenbeziehung?• …die Einkommensströme?

Kunden-Beziehungen

• Wie sollen die Beziehungen mit Kundensegmenten angebahnt und gepflegt werden?

• Welche sind bereits etabliert• Wie sind sie i.d. Rest d.

Geschäftsmodells integriert?• Wie Aufwendig sind Aufbau

und Unterhalt?

Kostenstruktur

• Was sind die Hauptkosten unseres Geschäftsmodells?• Welche Hauptaktivitäten verursachen diese Kosten?• Welche Hauptaktivitäten bewirken die höchsten Kosten?

Einkommensströme

• Für welchen Mehrwert sind unsere Kunden wirklich bereit zu bezahlen?• Wofür bezahlen sie gegenwärtig?• Wie zahlen sie zur Zeit?• Wie würden sie bevorzugt bezahlen?• Wie viel trägt jeder Einkommensstrom zum Gesamterlös bei?

Quelle: businessmodelgeneration.com

Find your most importantguesses + the most risky ones!


Q2: Who do you want to learn from?

1. The typical customer you envision if you get traction with your idea

2. Your early adopter = the people who will take a chance at your product before anyone else does

3. Critical partners for distribution, fulfillment, other parts of the business

your job is to think through the kinds of people who have the problem you are interested in solving!

Cartoon copyright of Giff Constable, „Talking to Humans“


Who do you want to learn from?

• The typical customer you

envision if you get

traction with your idea

• Your early adopter = the

people who will take a

chance at your product

before anyone else does

• Critical partners for

distribution, fulfillment,

other parts of the

business

Mar

ket S

ize

Laggards

16%

Conservative

34%

Visionary

13,5%

Pragmatist

34%

Techy

2,5%

your job is to think through the

kind of people who have the

problem you are interested in

solving!Chart based on Rogers 1995, p. 262 und Moore 1999, p.12


LaggardsLate

MajorityEarly

Adopters

Early

Majority

Innovators Time

Mar

ket S

ize

The Mainstream Market

The typical customer, once your product has successfully

entered the market

Chart based on Rogers 1995, p. 262 und Moore 1999, p.12


LaggardsLate

MajorityEarly

Adopters

Early

Majority

Innovators Time

Mar

kt S

ize

The Early Adopters

The people who will take a chance at your product before

anyone else does.

If you can not get early adoptes, you can not move on.Chart based on Rogers 1995, p. 262 und Moore 1999, p.12

Burning problem pic


Who do you want to learn from in B2B?

• Strategic buyer who is

excited about the change

you can bring)

• Economic buyer who

controls the purse

• Technical buyer who

might have

approval/blocker rights

• User who ultimately uses

the product or service Identify champions + saboteurs!


20 Minute Break


Q3: How will you get to them?

in other words: The Methodology

• Internal vs. external sources

• Primary vs. secondary research

• Quantitative vs. qualitative sources

• Methods


Internal Sources

• Customer Management System CMS

• Internal reports and analysis

• Sales data / Retail data - loyalty cards, etc.

• Stock Analysis

• Web site / eShop data

– Retrieve + analyze with Google Analytics

– Retrieve + analyze with commercial tools

• Social web data

– Retrieve + analyze with site-internal tools

– Retrieve + analyze with commercial tools


External Sources

• Open Data: available statistics + research documents

• Open Date: raw data from the internet

– Retrieve + analyse with Google tools

– Retrieve + analyse with commercial software tools

• Commercially available Data

• Other Data: magazine surveys, other firms’ research, …

• Own Surveys


Primary Sources

• First hand information

• Often expensive to collect, analyse and evaluate

• Can be highly focussed and relevant

• Care needs to be taken with the approach and methodology to

ensure accuracy

• Types of question – closed – limited information gained; open –

useful information but difficult to analyse


Secondary

Open Data

Sources


Secondary

Paid

Sources

http://bit.ly/1vvVZAX


Qualitative Research Quantitative Research

Descriptive: tells you why, when and

how

Data can be observed but not measured.

Colors, textures, smells, tastes,

appearance, beauty, etc.

Overview

Based on numbers: 56% of 18 year olds drink

alcohol at least four times a week

Data which can be measured: length, height,

area, volume, weight, speed, time,

temperature, humidity, sound levels, cost,

members, ages, etc.

Example 1: Oil Painting blue/green color, gold frame; smells old and musty;

texture shows brush strokes of oil paint; peaceful

scene of the country; masterful brush strokes

picture is 50cm by 70cm with frame 60 by 80; weighs 4kg;

cost €300

Example 2: Latte

robust aroma; frothy appearance

strong taste; burgundy cup200ml of latte; serving temperature 65ºC

serving cup 7 inches in height; cost €3.95

Example 3: Freshman Class

friendly demeanors; civic minded; environmentalist

positive school spirit

672 students; 394 girls, 278 boys

150 students accelerate in math

Source: following http://regentsprep.org/ and

http://regentsprep.org/


Traditional Quantitative Research

Test your assumptions through quantitative research by using

• Secondary Research

• Do your own primary research

• Analyzing available Data


Quantitative Research Today

Test your assumptions through quantitative research by using

• Secondary Research

• Do your own primary research

• Analyzing available Data

Social Media Monitoring

(SMM)

Google Tools:

• Google Advanced Search

• Google Adwords / Keyword

Planner (Tool)

• Google Trends (Insight)

• Google Analytics


Qualitative Research Today

Test your assumptions through qualitative research

• Asking people

• Watching people

• Go through the experience yourself

Questionnaire

Focus Groups

User Groups

Postal Survey

Telephone Survey

Social Media Monitoring

Customer Interviews

Test Markets

Internet feedback


Let‘s Dig Deeper: Methods from Google

Google tools for market research

• Google Advanced Search

• Google Adwords / Keyword Planner (Tool)

• Google Trends (Insight)

• Google Analytics

Welcome Jens Tonnier from woltere-marketing GmbH!


Why Google?Search Engines 2005


Why Google? The Online Search Ecosystem 2013


Search Engine useage in Germany


Google Advanced Search

Video: https://www.youtube.com/watch?v=yc6ssZnCyuA

https://www.youtube.com/watch?v=yc6ssZnCyuA

https://www.youtube.com/watch?v=yc6ssZnCyuA


Google Keyword Planner adwords.google.com/KeywordPlanner

Know how your customers are searching and talking, get wording

ideas and traffic forecasts

• Keywords are the phrases that customers use to research and

select a product or service

• You want to use the words that your target custonmers use +

look for

search for keyword and ad groups ideas based on terms that

are relevant to your product or service, your landing page, or

different product categories

Get historical statistics and traffic forecasts


Find information in Keyword Planner

• Keywords, Search Volume, Competitiveness (based on AdWordscompetition)

• Note: Only use EXACT match to explore keywords– Exact match = tennis shoes

– Phrase match = tennis shoes for women –or-blue tennis shoes size 9

– Broad match = shoes for tennis –or-tennis rackets and shoes

• Keywords must be compared “apples to apples”

Video: http://youtu.be/bxREkVhzEkw

http://youtu.be/bxREkVhzEkw

http://youtu.be/bxREkVhzEkw


• useful for casting and short term forecasting of consumer trends

(where statistics is not available or not yet available)

• Free publicly available dataset; search per country, category,

period

• Google taxonomy of 256 categories (“jobs” including “job

listings” “career resources and planning”, “resumes &

portfolios”, “developing jobs)

• Overview of increases and decreases in the use of search

category in real time (normalized within search categories)

1 Exploring statistics from the internet

Google Trends http://www.google.com/trends


Google Trends


Google Trends

Video: http://youtu.be/4uNrhACTv_c

http://youtu.be/4uNrhACTv_c

http://youtu.be/4uNrhACTv_c


Google Analytics

• Does daily, monthly, yearly tracking of web visits

– Graphed over time

• Shows which pages they go to, how long they stay

– Bounce rate

– Entrance pages

• How they got there

– Search engines and Search terms used

• Location, operating system, monitor resolution

• Over 80 reports available


Google Analytics

How it works

• Sign up for Google Analytics

– https://www.google.com/analytics/

• They return code to you

• You paste the code just below the </body> tag

• Put it on EVERY page

– Edit>Find and Replace is easiest option

• Put it in your template pages, so it will be automatically on every page

• Go to the Analytics dashboard page to see daily metrics

https://www.google.com/analytics/


Google Analytics

Useful Reports

• Visitors:

– Map overlay, Browsers, Operating systems, Screen resolution,

Connection speed

• Traffic sources

– Direct links/Referring links/Search engines, Most frequent search

words used

• Content

– Top content, Site overlay

Video: http://youtu.be/WC3ONXJn9FQ

video: http://youtu.be/WC3ONXJn9FQ

video: http://youtu.be/WC3ONXJn9FQ


Let‘s Dig Deeper: Social Media Monitoring

21.02.2015 Dr. Ute Hillmer www.better-reality.com © 2014 Brandwatch | www.brandwatch.de

Einführung/ Der Monitoring-Prozess

27

Daten-erfassung Query

Analyse

Präsen-tation

Bereini-gung


1. Ziele/ Welche Abteilungen werden involviert?

Marketing Community/ CRM

PR

Markt-forschung

Vertrieb

© 2014 Brandwatch | www.brandwatch.de


Abteilungen/ Marktforscher

Endlich verstehe

ich den Markt.


21.02.2015 Dr. Ute Hillmer www.better-reality.com51

Marktforscher/ Produktwünsche entdecken


21.02.2015 Dr. Ute Hillmer www.better-reality.com52

Marktforscher/ Produktwünsche entdecken



Q4: How can you ensure to be effective?

• Changes in Market Research!


Customer Development• Customer Development

Customer Problem:

known

Product Features:

known

Illustration copyright of Steve Blank, „The Startup Owners Manual“


And why is MR

changing?


Why must Market Research change?

9 out of 10 product innovations are failing

Corporate giant or small

star-up, low-tech or high

tech, online or offline, 9 out

of 10 new ideas fail

because…

our tools are

optimized for

execution


With innovations,

you need to be in

search mode!


A Tale of Fail


Webvan: a tail of fail

• A startup that promised delivery of groceries within 30 minutes of ordering, from state-of-the-art order fulfillment centers manned by advanced robots.

• Launched 1999;

• $10M, within 2 years $400M, raised;

• 8.5 billion market capitalization on day of IPO

• They had a compelling story, a great b-plan, a long list of features for SW, warehouse handling,…

• Webvan executed as its board and investors asked

• from launch to fail in 2 years perfectly on plan


“New Product Introduction Diagram”

The model is a good fit for an exiting company where customers

are known, the product features can be spect‘ed upfront, the

market is well defined and competition is understood!



Customer Discovery


Customer Development• Customer Development

Customer Problem:

known

Product Features:

known

Illustration copyright of Steve Blank, „The Startup Owners Manual“Illustration copyright of Steve Blank, „The Startup Owners Manual“


One of the largest failures on record

• Founded in 1991 by Motorola and a global partnership of 18

companies

• Planned to built a mobile phone system that would work

anywhere on earth

• Purchased 15 rockets from Russia, U.S. and China, 72 private

satellites were launched into orbit

• 7 Years after launch, the infrastructure was in place; 9 Month

after first call was made, the company was bankrupt.


A new area in products and channelsPhysical products through physical channels

Virtual products through physical channels



Talking to People

3 Phases

• Pre-planning

• Interviews and other discoveries

• Analysis and Insight

Cartoon copyright of Giff Constable, „Talking to Humans“


Talking to People 2

Preparation: develop a question GUIDELINE

Q1: What do you want to learn?


Talking to people and make sure

• Do it yourself, don’t use an agency

• One person at a time

• Add a note taker if possible

• Start with a warm-up question and keep it human

• Avoid confirmation bias by hearing what you want to hear (you can play a game with yourself)

• The story mode: “Imagine you are filming the documentary of your life. At this moment, what were you doing, saying, what is the emotion?”

• Are there solution hacks? Ways the customer tried to solve the problem?


More to develop a question guideline

• Ask open questions

• Talk little and get the other person sharing openly

• Set goals for key questions and track results

We hope that 85% of all date app users are interested in getting

to know new people, unrelated to any romantic outcome.

• Observing uninfluenced behavior upfront, can lead to great

insight and will help you find the right questions.

• Parrot back or misrepresent to confirm

• Do a dry run


Develop a question guideline

Get Stories, not Speculation!

• Watch out for speculations (Would you buy this product? How much would you be willing to pay? …) …humans are very bad in predicting their future behavior!

• Instead, ask your interview partner to share a story about the past!• How did you arrange + meet up for team sports in the past?

• How exactly did you do it?

• What worked well? Why do you think this worked? What was really good about it? What was the most fun about it? …

• What would you like so see improved? What frustrated you most? If you could do it all over again, what one thing would you change?

• What were the overall “cost” to you (time, money, nerves, …) – watch out for the words used!

• What were the overall “gains” to you (fun, outcome, …) - …the words used!

• What was the most important reason you bought XX at the time?

• …


Even more to develop a question guideline

The Magic Wand

• No Magic Wand Questions:

“If you had a magic wand that makes this product do whatever you

want, what would it do?”

• If anything, ask: “If this product were to solve one problem, what

would you want it to solve?”

It’s the customers job to explain their behavior, goals and

challenges. It is the product designer's job to come up with

the best solution.


More to develop a question guideline

Testing for price:

the hardest questions to get answered by qualitative questions are

– „Will people pay?“

– „How much will people pay?“

because answers to these Q‘s are extremely suspect.


Find your interview subjects

• Try to get one degree separation away

• Be creative and don’t expect people to come to you

– Where are they waiting and bored? (in line; moms on soccer

tournaments, …)

– Where are they in in their moments of pain?

– Referrals?

– Conferences, trade-shows, meet-ups?

– Social Media Groups?

– What do they enjoy? (pay a café, a manicure, ....)

If something does not work, try something new!


More about enterprise interview subjects

• Conferences, trade-shows

• Xing, LinkedIn, - know the title of your prospects

• Start in the middle – move up with more experience and

knowledge

• Ask for advice in a relevant chat

• Decide if you want to ask for advice or if you want to sell

• People are willing to grant time to friendly people, more so, if

they are students or researchers

If something does not work, try something new!


Exercise: You have 4 minutes with your CEO / your

Investor to convince him/her to fund the new app

• Research + test your most critical assumptions you are making for

the success of your app (morning exercise)

• You can use secondary research available online and parts from

statista at http://bit.ly/1vvVZAX

• Use your Google Research results for the right questions and the

right terminology

• You MUST go and do interviews (3 would be a good amount)

• Present in 4 Minutes, why your app must be funded. You can share

what you did, what you learned, what your conclusions are, what

your next steps will be. Convince for future funding!

• 2 Minute Feedback; I love….; I wish …; I share a thought….

http://bit.ly/1vvVZAX


Q5: How do you make sense of what you learn?

• It’s not about scientific significance, its about pattern detection

• To find patterns, you need to track the data

• Good working method:

– everyone writes down as many patterns and observations as they saw on post-its in 10 minutes.

– Put them all on a wall and sort them

– Discuss the patterns as a team and re-view your assumptions, your b-plan and product plan.

• Don’t take one persons comment to literally: look for patterns and apply judgment! In real life, talking to 50-100 people is a good amount.

• You are an intelligent filter, not an order taker

• People want to be helpful and nice; you want to hear nice things – keep that in mind



Lean Experimenting your way up

• Only talking to people is not enough; building a live product is

expensive and time consuming. Built your way up, itterating to

the RIGHT product that meets a customer need and that sells.

Source: Chart by Gliff Contable, Talking to Humans


Q5: How do you make sense of what you learn?

Verify your learnings by testing and re-testing our “product”:

Conversations

Mock-up

Prototype

Live Product

Put it in front of custemers and watch and listen to their reactions.

customers and get their feedback.



Making more sense of what you learn by putting

people through the actal experience

• Built a Minimum Viable Product (MVP) that offers the value your

customers value most and get feedback

• Built a landing page test that offers the MVP or tests some

wording and run the analytics of who

- is interested to read more

- asks for material by entering an address

- clicks the “buy now” button



Ready for more?

• The Lean Star-up, Eric Ries

• The Startup owner Manual, Steve Blank

• Business Model Canvas, Osterwalder

• Giff Constable, Talking to Humans

• The Lean UX,


Dankeschön!

Lean Market Analysis

Business

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