Chapter 5

Confirming and Fine-Tuning Your Ladders

The only relevant test of validity of a hypothesis is a comparison of prediction with experience.

—Milton Friedman

WE MAY NOT consciously realize it, but we move through our days testing hypotheses that we believe to be true. We awake each morning to the hypothesis that the sun will be in the sky, that we will have air to breathe, and that there will be water when we turn on the faucet. This reliance on hypotheses is how we are fundamentally wired from the days when we had to survive as cavemen (and cavewomen). Our prior experience drives our belief of what will happen in the future. Therefore, it often takes a dramatic change in our experience to alter our hypothesis about the world around us.

Take, for example, the refrigerator in my kitchen. I had lived in my current home for almost 10 years when the filtered water built into the refrigerator door stopped working. I drink many glasses of water every day and cannot break myself from the habit of getting ice from the door and then attempting to get water from the neighboring compartment. My experience of getting water from the refrigerator door is so ingrained that my brain won’t give up the hypothesis of also going to the refrigerator for water.

This kind of internal wiring is part of why we have a problem with looking at the world around us in a deeper and more meaningful way. It is what limits marketers’ and product development groups’ thinking. They continue to use what has worked for them in the past to create new marketing messages, products, and experiences—and who can blame them? Those old ways worked for more than 100 years. But they’re attempting to use the old techniques in a changed economy with a changed consumer. It’s like trying to use a telegram instead of sending a text message to deliver important news.

To prove that you have gathered relevant and actionable information during the laddering process—that you have identified real clusters—you need to reverse the equation. You must start with some hypothesis about how the clusters you have uncovered will react to an idea, product, message, or experience, and then do some work to find out if this is true. Once you can predict how your consumers naturally react you can train your teams to the idea of thinking from the consumer’s point of view instead of their own (called leasing).

Once you have completed your initial round of interviews and established your core groups, you’ll probably get the feeling that you “know something” or that you are catching on to some kind of pattern. You should move your laddering work forward by making assumptions about the type of stimulus to which these groups will react and why.

This stimulus can come from a wide range of sources: something you have created, something from your competition, or even an example from far outside of your existing scope. This is a great time to get other team members involved in the process and do some blue-sky work with them to generate ideas.

Blue-Sky Brainstorming

In blue-sky work, you throw out a theme, idea, or category and blue-sky—or brainstorm—ideas around it with a cross-functional team. So, for example, let’s say that you are building a website for new mothers. One of your categories might be pregnancy. If you want to build a new digital experience for planning for college, you might use a topic such as savings or even ones as simple as planning and then college. Be careful not to narrow the topic too much from the outset. You can always overlap the ideas and narrow them down, but it is very difficult to broaden an idea.

I recommend a cross-functional team, members of your marketing department, development, customer service, quality assurance, and even human resources for this process, because they bring different perspectives and interactions with your consumers to the table. They are experts at potential ideas because they have seen a wide scope, not only of what the company has attempted to do in the past, but also about what competitors might be doing in the space. When doing a blue-sky activity, there are some rules that are important to follow to keep the creative juices flowing:

• There are no bad ideas.
• Every idea gets written down and put up on the board or the wall.
• Discussion about why an idea or solution won’t work is not allowed.
• No one is permitted to judge an idea.
• Everyone must contribute.

My favorite way to do this type of activity is to use a blank wall or whiteboard and then write each idea down on a sticky note. I often use different colors to represent things we have done, things our competitors have done, and/or things from other places.

I was working with one particular client to build a product that focused on people who typically fell in a lower income bracket. I brainstormed some of the constraints that these people faced using the overall topic of stress relief. One concept that someone suggested was gun ranges. I was tempted to break my rule of don’t judge an idea but am glad I didn’t. Although gun ranges didn’t become the thing included in the offering, it did lead us to understand that, at their core, this group was driven by access. When this lower-income cluster was presented with the concept of gun ranges, they would talk about how they had never been to one before.

Once we learned this, we were able to create a way for these consumers to access spa packages and other experiences that were usually beyond their reach. We unlocked newfound knowledge by developing a true understanding of one of the groups’ core issues: access to experiences or ways to relieve stress.

This revelation also clarified an aspect of the study that had previously confused us. Although many of these lower-income respondents lived in houses with little or no furniture, they did have a large flat-screen TV, Blu-ray player, and the latest gaming system. We began to understand that what many see as frivolous spending was this lower-income group’s attempt to relieve stress. It was far cheaper in the long run to buy an at-home entertainment system than it was to go out to the movie theater or bowling alley on any given weekend.

Once your group has created its wall of ideas, sort them by the initial cluster sets, putting ideas under the clusters that the group believes is most appropriate for the proposed idea. For example, if you have created a list of ideas for a new vacation package, sorting the ideas by cluster will help you decide what you want to show each cluster. It’s not a problem if an idea seems to fall into two clusters; just make another sticky note and put it under both clusters.

The final step in the blue-skying process is to make your cross-functional team vote. A good rule of thumb is to give each team member votes equal to 10 percent of the ideas; that is, if you generate 100 ideas, everyone gets 10 votes; 150 ideas means that everyone gets 15. I use stars or dots to make this process interactive, and it provides a strong visual impact. The surviving ideas will stand out under each cluster and become the concepts and ideas (artifacts) you will try out with the clusters as you begin confirmation.

Talk to the Expert—the Consumer—to Confirm the Clusters

After you have a prioritized list of artifacts to try out with your clusters, now is the time to talk with your consumers once again.

This second round is when you really start to fine-tune your groups, prove or disprove that they actually exist, and understand more completely what’s driving their behavior. This stage is important; it’s where the consumers are reacting to concrete concepts. As a result, you’ll start to see how those reactions relate to your hypotheses about the groups.

Don’t stop learning at this point. Make sure you still have very broad discussions. You should wait to present any and all artifacts until the conversation’s end. As you are talking with the consumer, you should be thinking about which group of artifacts you are going to present based on the conversation and in what cluster you believe the consumer fits. The reaction to the artifacts will distinctly divide the groups into one cluster or another. You need to be able to explain why two groups that you believe to be distinctly different from each other both react to a given artifact positively.

Although I always start by testing with the things I think will most likely fit the cluster I believe the consumer fits in, I purposefully continue by presenting content or artifacts that I believe will work with other groups to see how far I can push the cluster one way or another. While making sure that I really understand my clusters and their core drivers, I am also trying to figure out if there’s a way to transition them across from one set of artifacts to another. For example, we know that Showless Joe claims to not watch television or use social media that often. By talking with him about some of the artifacts that are more appropriate to the other clusters, we started to learn about Singular Sam and understand under what conditions he would participate in these more engaging experiences.

It’s important to pay close attention to both what your consumers tell you and what they leave out. A good clue to whether or not an artifact is relevant to a given consumer is to watch for answers such a, “I might do that one day” or “I have thought about doing that.” These are dead giveaways that an artifact isn’t for that person and doesn’t fit within his or her current or even future behavior. Make sure you are really listening to what the consumer is telling you beyond the spoken answers to your questions. A good follow-up is, “Have you ever done this before?” or “Under what circumstances would you do this?”

Recall the earlier example in Chapter 3 about extreme couponing. A response of “I am thinking about doing it” clearly indicated a lack of sincerity by one of our clusters to perform serious couponing—or even their likelihood to participate in a sweepstakes or giveaway. They wanted to do it, but they never really would; it was just too much trouble. Unless the coupon was in the checkout line or on the grocery store aisle, it was not something that fit within this cluster’s core behavior. But because a core component of this group’s consumer DNA was a strong desire to be liked and affirmed, it was important to them to save face with me during our conversations.

Create Targeted Questions

After undergoing the second phase, you should be able to come up with questions that will peg your clusters. This is the time to take your clusters into a controlled or lab environment and then see if you can recruit based on behavioral and motivation questions you have created.

This part of the screener usually has between three to five questions. We had one study where we only had to use one question—and the response allowed us to determine to which of four clusters a consumer belonged. You will need to ask other questions to see if they are a good candidate for the conversation, but these targeted questions could (should) really replace the standard ethnicity, age, gender, income, and life stage questions that are the cornerstone of most mass media/mass production work. I still include the standard demographic questions; however, I do so to help prove the point that these demographic markers are not important to the consumer’s decision-making process. I always love it when we have one session with a 60-year-old female followed by a session with a 25-year-old male providing the same responses and reactions because they are part of the same cluster.

Once you have your participant in the room, you want to start with the same broad conversation you used before. You should be able to predict their answers and reaction to what you are going to show them at this point—even before you show it to them. This process provides powerful confirmation that your clusters are holding true.

Often, companies see these confirmation rounds as a wasted step. However, it’s just as important to know that you have something right as it is to learn something new. You should view a clean study, in which you recruit people, predict how they will react, and send them on their way, positively, because it indicates that you are on the right track and ready to move forward with putting an artifact or experience out to a larger group. How do you know that you have learned something new? When you can do it with precision. Take advantage of the opportunity to watch consumers react to and adopt without having any issues with something you have built.

This is also a good time to consider going back to focus groups. Because you now know why you are putting a group of people in a room together, you can start using them in these defined clusters to do ideation or evaluate concepts. Make sure your recruiting questions truly address the clusters properly and form your groups around the clusters, not the demographics. A word of caution: pay attention to your clusters. Because some of them do not play nicely with one another, putting them in the same group might be a bad idea. Don’t forget that their core behaviors and drivers will carry over to any research effort or initiative you attempt with the clusters.

Quantifying the Clusters

Once you have confirmed your clusters, you can now move to the stage of quantifying them. It’s crucial to wait to take this step until you are confident that you’re using the right questions—questions that recruit people accurately and put them in the right cluster. Your questions should be based on behaviors or attitudes; don’t try to get your consumers to self-select into a cluster by defining it. Recall the cruise line example in Chapter 3. The question you would ask to put consumers into their cluster could be as simple as asking them to choose the statement that best matches them. For example:

• I primarily take a cruise to visit a new destination I have never visited before.
• I like the laid-back aspects of a cruise and enjoy spending time relaxing and being taken care of while on board.
• I cruise the same route every year with my friends because I enjoy hanging out with them and meeting new people.

Include a few more similar questions just to make sure there is no confusion. Then you can use these questions to divide and look at the sizes of your clusters.

The quantification step is great, because it’s where you start to confirm some of the things you believe about your clusters—and learn additional knowledge about their overall ecosystem.

For example, let’s say that you have a cluster that you know primarily relies on mainstream media for their news and information. You can confirm this hypothesis and start to identify their preferred mainstream channels for ad and product placement opportunities.

My best advice, however, is: don’t get too hung up on quantification. This usually becomes the biggest stumbling block for a brand or company in our work with them. Laddering starts with what you know, so your existing quantification stands true. Laddering helps you understand more clearly how to target the clusters that have a propensity to be aligned to your company already and determine how to attract new groups.

Another important point to remember here is that size really doesn’t matter. For example, you might have a small but influential cluster. In the old mass media world, it wouldn’t make sense to target a group of that size. But as evidenced by the Pinterest story I shared in Chapter 2, one person can dramatically affect your brand or brand message.

There’s a danger in ignoring some of your smaller groups, who most likely require a different level of interaction or authenticity to pique their interest. If you provide something to the masses merely because they are larger, but your brand is well aligned to this smaller group, you may completely miss out on the opportunity to reach them at all because of their refusal to participate in mass media. If this cluster sees something where everyone else sees it, then they will be unwilling to participate. It’s not that they necessarily want exclusivity; they are simply motivated by the chance to try something out before others do. The opportunity to participate first and authentically with an experience or product is what really drives them. There’s no notoriety necessary, and they will gladly spread your message for you. This cluster is just like the first domino in the series: you must knock it down first to get to the rest (Figure 5.1).

Figure 5.1 Understanding a Clusters Influence Is More Important Than Its Size

There is also the risk of performing what I call a rinse and repeat. I often talk with a marketing group, product group, or ad agency after a successful campaign and find that they’re geared up for a repeat performance. Their plans will include sending an almost identical message to a group of people who successfully picked up their message or cause before. This completely misses the point, because they haven’t taken the time to understand why it worked the first time. This is a dangerously expensive approach both in time and money, but it explains the proliferation of sequels and copycat programming we see in television, movies, advertising and other entertainment.

Listening to and Learning from the Clusters

The introduction of social media has made it easier than ever to watch your clusters in action—that is, of course, if they use social media. Social media can provide a more authentic and measurable reaction than almost any other research technique available for certain experiences; however, it has to be done correctly to reap these kinds of benefits.

You just need to reverse the way you listen. Instead of focusing on what is being said, focus on who is saying it. Again, it’s not about the what. You can tell by the tone of the message (positive/negative), the perspective (whether it’s coming from I/you/we), and the information being shared via profiles how these groups are reacting to your campaigns or experiences. You will have a special insight into why they are speaking the way they are.

The Super Bowl provides an annual opportunity for you to easily separate your different clusters by viewing how they participate in the game. For instance, Chatty Cathys talk to other Chatty Cathys throughout the game primarily about the commercials. They use this unique opportunity to promote themselves and find interesting people to follow.

During an awards show, Passionate Penny will be glued to the Twitter feed or Facebook Fan page of her favorite actors, characters, or shows to experience the award show from that perspective. She will retweet or like a comment that highlights an accomplishment or receipt of an award. She will also be actively engaged on platforms from movie and television show databases such as IMDb or any other experience that provides her with additional content or exclusive information.

Granted, there are some groups whose members don’t participate in social media at all. This is just as important; it lets you know where to put the best placement to reach them. Thanks to the research you’ve done, you know that you’ll simply have to collect data from this group in a different way. It must take place in front of them, during their experience—not by trying to modify their behavior.

View every time you talk to a consumer in the future as an opportunity to test a concept or create an experience—to mark them into their defined cluster and to learn more about them. By doing so, you will begin to learn more and more about who they are and how they are going to react. By paying careful attention, you will learn when your clusters are changing or when there is a new marker that makes it important to potentially split them more granularly.

Thanks to this approach and continually learning, your consumers become almost as predictable as an old friend or one of your kids. You can forecast what they will say or do even before they do it. Don’t make the mistake of viewing your conversations with consumers as a singular event.

Back in Chapter 3, I highlighted some work we did with the telephone company BellSouth. You might recall that we ended up with a panel for this project. Because we had recruited the panel members based on their core differences and motivations, we could predict and continue to learn from these consumers, even after that initial project was done. Without the ability to do this, the data we uncovered would have been confusing and nondirectional. Thanks to our background work and deep understanding of the different clusters, we had a relevant foundation from which we could work going forward.

The Importance of Transitional Clusters for Reach

I talked briefly about a cluster called Singular Sam in the previous chapter’s study regarding social TV. You should never underestimate the importance of transitional clusters like this. Although Sam generally considers social media and television to be a waste of his time, there is one unique period of time during the year—his favorite sport’s season—when he is not only willing but excited to participate in both. If you provide Singular Sam with something he considers valuable during this period (a Fantasy Football app, perhaps) and then add some elements that will hook him during a nontransitional time, you have the opportunity to establish a longer-term relationship with him outside of football season. You can therefore transition him from a singular user to a more permanent one.

For example, let’s say Singular Sam is an Auburn fan and Auburn is having a great season. You can take this even further during the off-season if your station replays old Auburn games. This gives you the opportunity to promote to him within the Fantasy Football construct as a way to fill his precious TV time when football isn’t on. Or perhaps you are an advertiser who knows that Singular Sam prefers in-person communication but uses a Fantasy Football application for the football season. This is a time when in-person ad placement, promotion, or partnership makes sense and achieves additional reach.

The great thing about laddering is that once you understand the factors that are important within the clusters—the DNA—you are able to find where the DNA overlaps. This knowledge allows you to create a lattice, just like the lattice you see on a trellis, that shows the overlap of groups and allows your brand, just like the branches of a rose bush growing across the trellis, to gain additional and solid reach. As we move into the next chapter, I will highlight what makes up the core consumer DNA of different clusters and discuss how to capitalize on their overlaps to really communicate with them.