11 Sep b2b mystery shopping for competitor research insights
Why market research results sometimes distort reality and what can be done about it
The iconic mirror maze scene from 1947 movie The Lady from Shanghai, where the protagonists don’t know whether they are shooting at a real person or an image, is a metaphor for a situation that many of my B2B clients have faced at one point or another.
For example, a company may find itself losing business to one or two competitors. According to their research, however, they should not be losing any business at all: customer satisfaction scores are excellent, and focus groups show that the company has a strong reputation for high quality products and competitive prices. The company should not be losing business at all according to the research, but nonetheless the company finds itself losing important customers.
What can be done?
Most market research methodologies gather information from respondents after an interaction (like a purchase) to gauge their satisfaction levels with different aspects of the sales experience, including product performance or how the sales agent looked after their interest. These methodologies depend on the respondents’ memory and willingness to be candid about their experience, exposing the research to the risk of inaccurate information.
One solution is B2B mystery shopping, a highly successful data gathering methodology often used in competitor research. It can provide real-time and real-world insights on vendor-customer interaction, with the vendor being a selected competitor and the customer being a mystery shopper. This form of primary research eliminates the need for memory because the interaction between vendor and customer is part of a live data gathering process which often includes the recording of the sales process.
Finding the blind spot
This methodology has helped many of my clients to better understand the sales and marketing tactic used by their competitors, tactics that caused the loss of new business and clients. The insights gathered are as varied as the industries I have worked with:
• A client’s policy regarding contract renewal was discovered and exploited by a competitor, leading to millions of dollars in lost sales. Customer satisfaction research completely missed identifying this problem. Once the policy was changed there was an immediate reversal of fortune, with the client winning new sales and winning back former clients.
• As part of its sales presentation, a competitor was portraying my client as falling behind technologically, even though this was not the case. Traditional research failed to identify the impact of this tactic, with the result that the client was losing bids it normally would have won. Once the problem was identified, the client was able to counter with a positive marketing message, leading to increased sales.
• A client in financial services sector required competitor pricing information for a new product they were developing. The insights gathered from this research was used to develop a pricing strategy to make the product launch a success.
Conclusion for research buyers
Traditional market research methodologies provide important insights in many circumstances. Research buyers should be aware of circumstances where such methodologies fall short, especially in the B2B arena. B2B mystery shopping is an alternative data gathering methodology that can successfully overcome information gaps left by traditional market research.
© Enrico Codogno, 11 September 2019
Enrico Codogno, Principal Consultant, Customer Foresight