Simple Market Research Analytics That Extend Report Value
June 5, 2020June 5, 2020 | | 0 Comment | 10:40 am
For marketing research projects that collect product awareness and usage data, there are some ratios that are easy to calculate and which lead to deeper insights. These simple analytics are often called “conversion ratios”. One such ratio is Awareness-to-Trial, which tells the percentage of trial received from consumers for each point of awareness generated by a product. “Trial” is the proportion surveyed who have ever used/purchased the product, and this can be gauged against top-of-mind awareness, total unaided awareness, and total awareness levels overall. Here’s a simple example: Goliath Snack Cakes have an unaided awareness level of 32%. The level of people who have “ever tried” Goliath’s cakes is 8%. The Awareness-to-Trial Conversion ratio is 4 to 1, or 25%. For every dozen people Goliath’s ad and promotion plan makes aware of the brand, they get three people to actually try it. (Note that you could do an Awareness-to-Purchase ratio instead, asking consumers if they have “ever purchased” Goliath Snack Cakes.) Is that Awareness-to-Trial Conversion ratio good? There are two ways you could know: 1) Assess the results agains norms for the snack cake category (MarketTools can provide you with norms for various categories); or 2) In the absence of norms, run the same exercise for a competitor (or multiple competitors) measured in your A&U survey and compare your results. Let’s say category leader Little David’s Snack Cakes has a trial level of 16%, double that of Goliath’s. Their unaided awareness level is the same (32%), resulting in an Awareness-to-Trial Conversion ratio of 2 to 1, or 50%. That means that for every dozen people that know about Little David’s cakes, 6 become triers, twice Goliath’s rate. So what does that mean? Knowing this degree of discrepancy vs. the prime competitor, the brand manager at Goliath is now aware that her ad and promotion efforts are not as productive as Little David’s in driving trials of her product. That information opens up many possibilities to help guide her strategies: review the ad copy to try new appeals; do a price comparison to understand the cost difference between the two brands; hire some market researchers to do a depth study comparing the two brands to get shopper insights about motivations behind the purchase; do a review of Little David’s marketing strategy and tactics; conduct a retail assessment for issues (does Little David get more SKUs on the store shelf, better shelf position, end aisle displays, etc.?). The Awareness-to-Trial Conversion ratio comparison helps identify direction for further thinking that may not be immediately apparent. Further, using the ratio the brand manager can calculate the potential dollar payoff of investing in actions that would close the gap between Goliath and Little David. A similar analysis can be conducted with a Trial-to-Regular-Use ratio (“brand you use most often,” “favorite brand,” etc.). In this case, a sub-standard or non-competitive ratio may indicate a product shortcoming. For example, let’s say that Goliath converts 10% of its triers to regular users while Little David’s gets 25% trial-to-use. Maybe Goliath promises great chocolaty taste in its ads but doesn’t deliver the expected flavor; maybe it has a displeasing texture, has too many calories, or some other issue that turns off consumers. The Trial-to-Regular-Use conversion ratio guides the marketer’s thoughts toward additional product testing (if it hasn’t been done already). It could also indicate a retail problem, such as poor placement in the grocery store. These conversion ratios are useful in helping to eliminate possibilities, narrow the scope of where efforts to improve should be concentrated, increase efficiency, and provide a quantitative benchmark for tracking progress of development efforts – ultimately enhancing your product’s chances for success in the marketplace.
Please follow and like us: