Growth Hacking, Rainmaking and Market Research

There are three types of enterprises: the ones who need growth, the ones who do growth, and the ones who close end of the year. This article is for the ones who feel the need for growth.

We do now Growth Hacking, Rainmaking and Market Research. The first two have a magical sounding names, so belief might help us. Market researchers are just applying standard research methods to questions.

Rainmakers are salespeople who use techniques not directly visible to outsiders to acquire new customers. Rainmaking and market research go hand in hand.

The following chart shows how to lift a small enterprise to another level:

The next step: Market Research, Rainmaking and Growth Hacking
The next step: Market Research, Rainmaking and Growth Hacking

Who looks for Growth Hackers and who for Rainmakers?

Usually start-ups. Survival and growth need exponential growth here. That could double weekly sales. Growth hacking also works for more traditional companies that can expand their production fast enough and still grow their market.

Growth hackers are people who achieve such sales growth using methods that are not directly visible and easy to conceive for the environment. This gives their work something magical.

Traditionally Hacking meant using not necessarely legal methods to gain access to data that is not immediately visible or protected. The hacker searches for loopholes and hidden entrances in computer systems. A growth hacker seeks and finds direct ways into the consciousness and perception of potential customers. This are paths the competitor or late-bloomer in the business says: “If I knew that”. Both Hackers use methods that would require too much technical knowledge and creativity from others.

Rainmakers are more traditional. They have an approach to sales not used in the enterprise beforehand, sometimes they also change the product line. This looks like magic to the employees in the enterprise. They may do own market research or user the services of professional market research analysts.

Extraordinary skills of the growth hacker

He sees unfulfilled human needs. She or he tests that in niche markets there it is possible to see how well a product is being received. Market research can test new products with well-known techniques, for example group discussion or sending out samples and questioning later.

According to Henry Ford, market research and customer suggestions were not the impetus for the development of the then revolutionary Model T, which was built in huge numbers. Customers would have wanted faster horses instead of cars they had never seen before. Growth Hackers and Market Researchers need to be visionaries to see the new product in his best shape.

Growth hacking is referral marketing

Inexpensive and fast customer acquisition cannot circumvent recommendation marketing. People recommend a product to others if it has helped them or arouses enthusiasm. Or if they can earn money with the recommendation.

Free trial access, distribution of samples, influencers, trial lessons, presence on social media – a lot helps a lot, like Germans like to say.

Outdated business models – leave it behind

People like to think that things who were once successful may be worth reviving or continuing. Market research finds if there is still a market for the product.

Rainmaking and Market Research work together

Growth hacking is the product of many ideas and numbers. The firm belief in one’s own success is of no use if all market fundamentals oppose it. For example what to do if an analysis of the Totally Accessible Market shows only limited growth opportunities?

The market researcher also knows the penetration and effect of the individual recommendation or influencer channels and can doreliable tests.

Automated Product recommendations – Does Software Better Than Human Sales Staff?

The article deals with the possible uses of automated product recommendations in sales and customer service. There are buyers who prefer to buy on the internet for there they do not have to talk to human sales representatives. They probably had some experience with vendors staff hiding their cluelessness behind a lot of talk and are trying to sell their products on stockage at anyone who does not get away fast enough.

The problem looks hard to solve. But wait: for a few years now it is possible to extract valuable data points from primarely web activities and connect them with realised sales. The connector are either self-learning models or static traditional models. Models simulate behaviour and results.

The interested customer is looking für information before buying. He or she may ask a specialised salesperson and consultant who has all the relevant answers ready and can think in the customer’s interest. This relieves the customer. Or they, the potential clients, may look for publicly available information and customer review to avoid the advice of an inexperienced and overburdened sales representative.

Many sales representatives for complex products are quickly overwhelmed by the questions and expectations of well-informed prospects. The untrained salesperson feels attacked, the sales talk goes off the rails, the interested party prefers to buy from a supplier without advice.

The web part of customer journey

Depending on the product, between 80% and 90% of the buyers begin their customer journey with an search engine. So it is important for the seller to know what it is reported in the web, take care of the correctness of web information and avoid contradicting information. If there is human sales staff, they are supposed to assist the web customer journey and take care of a seamless process.

The consultant with all the facts in mind and the fully automatic customer advisor are extremes, the practical truth in the company lies in between.

Can the web be the better customer advisor?

Yes and no. The informations in the web and the informations given by a human sales person are supposed to go without contradiction. Nobody likes lies and deception.

Artificial intelligence makes use records of any communication with customers, for example chats, mail, data entries. This is compared with predetermined success goals. The model recommends something and can adjust itself. Something salespeople do intuitively, too, if the selling company lets them. Artificial intelligence therefore means less control for the management. On the other hand, opportunities are used that might otherwise have been overlooked. Where to start now?

Sellers are supposed to make as much information as possible available in a neatly structured way. Many people would like to find out more before making personal contact, but cannot find the information they are looking for. If publicly available documentations saves half an hour of calls per working day for the seller this justifies an expense of €2,000 for an improved sales website or other type of customer information – and that for telephone staff at a standard wage. Informed customers are better customers.

The meaning of human interaction

The ideal salesperson knows the buyers needs and wishes. He ors she build the best possible solution with his expertise. In between, looking up details and availability on the computer is essential for complex inquiries.

Advice form humans or from machines and websites?

Whether or not a human intermediary remains necessary for information collection and transmission depends on the product itself and on the personal preferences of the interested party. Some can evaluate and implement the freely available information, such as product descriptions, customer reviews and more for their own needs, while others cannot.

Good sales people relieve the customers. To do this, they must put the interests of the customer first and not fight for sales at any price. Consulting software in the sales pitch gives standardized information, if the software is capable of extracting the recommendation which work and then the client might be really happy.

Correct information with automated product recommendations
Correct product informations saves money for buyer and seller

Success has many reasons

Incidentally, the screen of the gentleman can turn directly to a prospective customer without the computer interfering. And if he needs information from the cloud or machine, he has it quickly at hand.

Targeting Marketing With Qualitative Market Research

Why we need a buyers persona

A buyers persona is a picture of our targeted group. It says persona for the reason we do not need to know everything about that person and there might be different persons in our target group. The second part is about qualitative market research. We use this kind of searching for behavioural characteristics for creating this buyers persona.

A wrong image of our target group costs us money and makes our brand less popular. Simple example is posting on Linkedin without reducing the number of followers. I looked at the list of people I unfollowed. The reason for doing that was that they posted repeatedly content I do not like or is just not true. Most of them are aging german business trainers spreading far-right political statements and sometimes even far-right lies. The other ones are sales newbies who spread too often their pitches aimed at a different buyer persona than me. Is a close group of followers who believe the same political statements as the poster the thing the poster wanted? If there is no reaction to your post does hammering out repeatedly the same sales pitches again and again to the wrong targets a good thing? Or should we appeal to a broader audience?

Why qualitative Market Research

This article is about bringing qualitive and quantitave research together with integrating numbers and representativity into qualitative research. Quantitative research is primarely counting and statistics.

To research people ‘qualitatively’ means that you intend to understand them. This is beyond algorithms. Let me show you how best to do this. I am here to listen to you. (Elif Kus Saillard)

The topic of qualitative market research is understanding. What does the world of my target group look like? What emotional and financial settings do they have? Quantitative research, on the other hand, determines how many people in the target group have which attitudes, how many they are and how their budget looks. A random sample is drawn so that not all members have to be questioned.

The claim of qualitative market research

Qualitative market researchers understand the customers. Its like some newspapers articles, where journalists describe some individuals where they think they are good for the numbers. Quantitave shows the numbers – for example 60% believe that the government does a good job in education. Discussions in focus groups, in-depth interviews, images, social media and much more can be used as data sources for qualitative research.

Correct information with automated product recommendations
What will be the result of qualitative market research into her wishes?

Also compare here (New Market Research Blog). The qualitative market researcher is an active part of the research process. He or she uses their subjectivity to better understand the phenomenon being studied. You want to understand why people believe in what and see the world a certain way. A qualitative researcher wants to understand the process of selecting a product, for example. A quantitative researcher wants numbers, averages, and more. Manufacturers and dealers can then base their decisions on this.

How qualitative researchers can do representative studies with small numbers

A qualitative researcher makes small samples. Understanding the process and the mindset of the subjects, this researcher assumes some validity. To ensure this this procedure can help:

The result of the small sample are suitable when no changes are to be expected from a larger sample. This can be checked by first evaluating 30 questionnaires. Hopefully there is no significant change with a further 10 questionnaires. If there is, another 10 questionnaires are added. If this does not maintain the hypothesis that the differences in responses are statistically insignificant, the study can be considered representative provided the responding participants represent the target group.

Some subjects suitable for qualitative studies:

  1. Lists of ideas – if the ideas are repeated, the study can be ended. Studies that do not record the subjects’ ideas via structured questions but via free text information fall into this category.
  2. All – or – none results. If every participant in a small study says the same thing—like, “I see a train station in this ad,” or “I prefer the new packaging”—the conclusions are likely to be valid, even with small samples.
  3. Strong hypotheses for the study to support If we have a hunch and it is supported by the small sample, we can be sure that the hunch is correct. All we have to do is verify that the underlying hypothesis is not just speculation. This type of market research is popular with journalists who can get by with just a few interviews.
  4. Understanding instead of measuring – for example customer journey. This analysis helps testing new products.

The problem of representativeness in qualitative research remains.

With small samples, the problem of representativeness remains. There is no statistical way to ensure the representativeness of a non-probable sample. The market researcher’s judgment must be added here: can the result be as the study suggests or are there other, contradictory results? Trusting only statistically proven results without knowing the underlying connections can be misleading.

How prices are perceived from seller and buyer

Pricing affects everybody. Selling your apartment, selling used furniture, doing salary negotiations or finding prices for your products. How to find a price liked by the seller and buyer? In my seller history I found situations with low prices where the customer voluntarely added a gift, and many situations where nobody wanted to buy. The reason for this can be “no market for the product” and “price is prohibitively high”. The latter one means there is a market for the product, but not at the charged price.

The next chapters give structure to this complicated matter.

The classical theory of pricing for optimal is very simplified. It assumes a linear demand function, with only one determinant, the price: demand=f(price) . This means only demand determines the price. What happens if demand has many more determinants?

This can be:

  1. The look of the selling (web-)site
  2. Do the salesmen make a good job?
  3. Do I get good advice from the staff?
  4. Can I expect some value if I pay more?
  5. Does the product make me feel better?
  6. Do I have the budget for luxury?
  7. What are the prices of the competitors?
  8. The price the seller wants

Point 1-4 are the value to the product added by a good sales team. Example: if a retail store buys a pallet with 1000 packets pasta for 600 € and sells the package for 1,2 € the sold package is not the same product as on the pallet. The services of the retail store are added.

The following graph is an example. It may look different for a specific produkt. The graph with the numbers given there works good for used cars and expensive utilities sold on Ebay or webshops.

What determines the price, pricing
What determines the price, pricing

Example: make advice a valuable good

Many brick-and-mortar retailers complain that their customers do not pay for advice. What they do not tell: how much do their prices differ from common internet sellers without any consultancy? Is there really value added in the store?

In old times, when sales was based on printed catalogs, there was the famous trade costing, with list prices, heavy rebates, and purchase prices. Most retailers ordered their stuff at wholesales, which themselves made their cuts. The result was that end user prices were about 3-10 times as high as the factory price. I understand that many want this time back. The customers had no choice, they had to buy locally. Many wishes and dreams of customers weren’t ever fulfilled for the high costs of maintaining catalogs and storage.

Now many internet retailers order directly at the manufacturers, and they have to look for competing offers worldwide.

Selling Services

There are two approaches for long-term pricing: with interchangeable goods, many manufacturers, in the long run the price will be the production cost plus some earnings. The earnings are the incentive for producing. Examble: a spare part for an historic car. Production cost is 150 €, with this part added the car gains 2000 € value. If the seller knows that and wants a high price, the buyer might look for another source which produces it for 150 € and pays additional 50 € for the favor.

In Services it is a bit different. Production costs is one side. The other is: how much will the buyer profit from my service? If the seller, you, knows that 25-50% of the profit for the seller, the trainer or consultant, are normal.

Is there a formula for prices?

In economic theory the price is equal to marginal use. That means the price equals the benefit the buyer thinks he has from the last unit he or she buys.

If we can measure the benefit in money and realtime, we have the formula.

The benefits are listed at the beginning of the article. The problem is that the customer does so many estimations, that change over time. Also new competitors with low price entrance strategy might show up.

When selling over a website it is quite easy. Look at the ones who buy related to the ones who look at the article. If there are many who look and do not buy then lower the price, if most of the visitors buy then raise. This needs a lot of finetuning. Sometimes visitors look a few times at the articles until they finally buy. When they see that the prices go down, they might wait even longer. So you might want to include the total number of visitors.

How to calculate?

There is a mathematical formula and there are ways to survey it.

We measure the first eight determinants, with due consideration of costs:

determinanthow to find and count
The look of the sales (website) position.Survey of visitors
Are the salespeople doing a good job?not available everywhere, get feedback
Do I get good advice from the staff?Get feedback
Can I expect value if I pay more?Tests and surveys on buying motivation, own samples
Do I feel better because of the product?Tests and surveys on buying motivation
Do I have the budget for luxury?Experiments, interviews
What are the prices of the competitors?Research
The price the seller wantsLook deep inside you

Market research helps with the first six points. Usually it is necessary to repeat the market research every 3-6 months with the well-known market research problem: the target person doesn’t like to answer. They are bored and do not know whatfor they took their time to answer the questions. We must therefore look for other methods. An easy-to-install method is to encourage visitors to comment. You may get 1-5% comments from the customers. This responses add up to valuable data source. It is also possible to conduct studies with paid testers. There are some problems with representation of the correct user group there, additional research helps to circumvent this.

Photo du titre by Egor Myznik on Unsplash

Storytelling makes successfull

How do I find the right story for my product, how does my storytelling become a success?

Products are enhanced with storytelling. I am looking for a 17 mm socket, which of the three available nuts or wrench sockets will I buy:

  1. Simple picture on blue background, price € 5.60, supplier unknown
  2. Same picture as 1., but additional information that it was made in China by a small factory in Shenzen from the best steel for heavy use, price 8.30 €
  3. Again the same picture as 1., and the same manufacturer as 2. The dealer introduces himself as Franz Müller from Rottweil in deep Swabia, who specializes in the sale of quality tools. Price € 9.20.

I learned that Swabian dealers are very quality conscious. Franz Müller connects to my experience, and his story gives me expectation that the tool will run smoothly and that can use it without any problems. I order his stuff despite the higher price.

Storytelling has to appeal the customer’s mental world

Good examples for that:

  1. Promise of getting rich fast with Network Marketing. You are shown the beauty of wealth. The way to do this is very simple: you win a few customers who in turn win new customers.
  2. Anyone who has ever been to partner exchanges surely knows the many supposedly young and good-looking women and men who promise the perfect relationship. Fortunately, they don’t present their price list until late, so you don’t have to pay for the illusion of a perfect relationship due to the lack of a valid contract.
  3. Berlin advertising agencies in particular currently love telling stories from the ideal world of the rurals village or a small city with intact neighborhood “where everybody knows your name. The stories are pinned to every product whose distributor requests it.
  4. Coaches encourage other their coaching clients to tell their history. That is supposed to induce more interest from potential customers. A very common story is that of the poor lady or gentleman, stricken by fate. This person believed him/herself and made it again into great wealth. And there are photos from trips to exotic places or they buy artworks.

How to find your story?

Take care that your story does not disguise the product, unless the story is the product. Example: an email from a coach who promised me a great development as a globally admired speaker and expert in my discipline. I asked myself: “What does he even offer”? It was simply an rhetoric training, as I learned later. By reaching into the rhetorical multi-level marketing language, however, he created unpleasant associations for me. If any kind attention was the target of the action, the coach is successful. If he wants to be a serious personnel developer, less so.

Market Research helps you to find about more about your targeted group.

To the featured image: Thanks to Allie for sharing their work on Unsplash.Photo by Allie on Unsplash