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The Influential Employee
We all have the people in our life whose opinions we trust, and to whose advice we listen. These individuals are seemingly always ahead of the curve, and are tuned-in to things around them.
These people are the Influentials. Our research confirms that 1 in every 10 American is an Influential. Influential individuals have the innate ability to sway the thoughts and opinions of those around them. However to leverage the potential power of Influentials, an organization must first understand who influentials are.
This Bug Insights white paper highlights some of the key features we have confirmed about who Influentials are and how they can be your greatest advocates. Tapping into the power that Influentials possess can help organizations better serve their employees on and off the clock.
Interested in the learning more? Click here to learn more about Influentials and how utilizing their unique personalities can benefit your business.
Exit Interviews
Innovation starts at understanding.
Exit-Interviews might be common place in the HR space, but why have marketers not tapped into their explanatory power? Research suggests that poor data quality and a lack of consensus on best practices are the leading factors to why exit-interviews fail.
As markets are becoming increasingly competitive, an effective exit-interview can be extremely beneficial to understanding why customers switch products or services. We have identified three key elements to conducting a successful customer-based exit-interview, which can provide businesses with quantifiable and actionable data.
This Bug Insights white paper highlights the importance of conducting customer-based exit-interviews at the right time, and in a manner that is most beneficial to both the exiting customer and the business.
Interested in the learning more? Click here to learn more about how to better understand what your customers want, and how to better satisfy their wants and needs.
Case Study: Retail Electricity Provider Attempting to Understand Consumer Behavior
August 17, 2016
Usually, giving your consumers the power to choose is a good thing. This can only be true, however, if your organization is not loosing revenue in the meantime. In Texas, a state approved website for the sale of retail electricity has been causing headaches for both consumers and for electricity suppliers because of that particular issue. Originally designed to be an unbiased resource for customers, the PowertoChoose.org site has now become a forum for electricity suppliers to create new, unheard of brands and offer completely irrational, deceptive pricing structures. A well-known Texas electricity supplier engaged Bug Insights to help them to better understand how consumers are using the site. Using conjoint, we found how power companies can best structure their products in order to compete with the irrationally low pricing structures and minimize long-term losses. Interested in the results of our case study? Want to learn more? Click here to learn more about how to identify and meet customers' unmet needs, and capture a market.
ABOUT BUG INSIGHTS
Bug Insights is a marketing analytics company that provides prescriptive analytics to help organizations make better business decisions. Using fact-driven data, Bug Insights consults clients how to best optimize the return on their marketing investments. Bug Insights assists organizations with a range of actionable research methodologies including focus groups, conjoint, A/B testing, data mining, and trade-off analysis. The company advises organizations of all sizes across a range of industry verticals including financial services, public policy, transportation, telecommunications, hospitality, manufacturing, retail, healthcare, higher education, and energy.
Founded in 2014, Bug Insights is headquartered in Houston and Atlanta. For more information, please Contact Bug Insights at 713.425.4168, [email protected] or visit www.buginsights.com.

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The Most Influential Generation: Leveraging Eye Tracking Technology to Understand How Millennial Women Absorb Information through Advertisements.
August 2, 2016
Initially written off as children who have been given too many participation trophies – the Millennial generation (18 to 34 year- old Americans) has now come of age. According to data from the U.S. Census Bureau, Millennials make up nearly 1⁄4 of the US population, making them the largest generational demographic in America, and with nearly 80 million Millennials in the U.S. alone, this generational demographic has started to impact the economy as their buying power grows.
A Neilson study found that households in the US with at least one Millennial accounts for 37% of the total dollars spent in the U.S. and 31% of the trips taken annually. These households spend roughly 15% more than the average U.S. household. According to Accenture, Millennials in the U.S. alone spend approximately $600 billion annually. No longer teenagers living with mom and dad, many Millennials are now in their 20’s and 30’s, building careers, married, and having families of their own. Accenture reports that by 2020, annual spending for Millennials in the U.S. will grow to $1.4 trillion, making them the generation with the largest buying power.
In light of this generational shift, marketers too have shifted their focus, attempting to understand how to reach this digitally connected, easily distracted, socially minded, multi-tasking generation. However, even with this change in focus, marketers still seem to be ignoring a large and very influential demographic: Millennial women.
Women in general are responsible for creating and influencing a significant amount of wealth. Women in the U.S. with income of at least $100,000 (or investible assets of $500,000) control over $11.2 trillion – which is 39% of the nation’s total investable assets. Not only are women controlling the investible assists of their households, but they are also becoming primary breadwinners and business owners generating and controlling a growing amount of dollars.
Millennial women are the driving force of this shift; in fact, these women spend seven times more than their parents did at the same age, even adjusted for in inflation. A study conducted by FutureCast found that of the 6.2 million affluent millennials in the U.S. (those making an annual income of $100,000 or more), 64% are female. With women graduating from college at a higher rate than their male counterparts, and female hourly earnings slowly becoming more in line with the hourly earnings of men (92% - still not equal, but much closer to parity than it’s been for generations past), Millennial women have captured a significant stake in an ability to impact the economy, and should be a significant consideration – if not the primary focus – for marketers targeting the Millennial generation. Millennial women are exercising more power than ever interms of purchasing, but are not being targeted by marketers or brands for anything other than women-centric products, and even those sometimes fall short of reaching this specific demographic in a way they relate to.
“Boomers bought stuff because they needed it; Xers buy because they want it. Gen Y . . . are easier targets, because they have grown up in a culture of pure consumerism. They’re more likely to buy because they see buying as a part of life.”
-Rob Frankel, author of The Revenge of Brand X
USING EYE TRACKING TO UNDERSTAND VIEWING BEHAVIOR
These women are financially independent, driven, technologically savvy, but they are overextended and rushed for time. A study conducted by Radar Research, suggests that Millennial women live a faster pace of life and are easily distracted, which impacts the way that they consume advertisements. They've been besieged by media their entire lives, making them incredibly savvy in the way they digest all types of advertisements.
The Radar study concluded that like many consumers, Millennial women are unlikely to click on digital advertising; however, they are much more aware of these ads. When asked if they have discovered a new product via an online ad that they saw but did not actually click on nearly 40% reported that they had. Conversely, just over a quarter of Gen X women said the same. This raises a question around how these women view advertisements. What about advertisements catches their attention? How does their viewing behavior differ from women older than 35? How can marketers design ads that are more likely to get these women to take notice?
To answer these questions, Bug Insights designed and implemented an eye tracking study. 25 women from Houston Texas were included in the study. Participants were segmented into two age categories: Millennials (women age 18-35) and Non- Millennials (women over the age of 35). 13 Millennials and 12 Non-Millennials participated in the study – a total of 25 women – which was conducted in June of 2016. Each participant was asked to first self-report on a few key demographics, including age. These self-reported demographics were used to segment the data for analysis. The study included 16 print advertisements; each participant saw the same 16 ads presented in random order. To capture the Eye Tracking data, a Tobii X2-30 screen based tracker was used. This tracker is affixed to a screen, allowing participants unrestricted movement and captures data at 30Hz. Tobii Pro Study was leveraged for data analysis.
Results demonstrated that consistently Millennial women spent half as much time viewing advertisements as Non-Millennial women did. On average Millennials spent just 3.3 seconds viewing the ads; for Non-Millennials average time per ad was 6.5 seconds. Interestingly the patterns and the way the media is viewed is fairly similar; however, Millennial women just appear to be more efficient at digesting the information. This is not surprising, given their lifelong exposure to technology and their strong ability to multitask.
For example, the images below, show a heat map of the viewing patterns for Millennials vs. Non-Millennials for one of the ads tested. For this specific ad, Millennials spent on average just under 4 seconds viewing it; Non-Millennials averaged about 7.5 seconds.
Looking at the heat map view side by side, it is easy to see that viewing patterns are similar – both demographics, essentially
view the add from top to bottom and from left to right. However, one key difference exists: the Millennial segment basically skips right over the small text just below the image that says “The stylish XT5 combines effortless power and progressive technologies so that you can focus on what lies ahead”; whereas the Non-Millennial segment spends almost the same amount of time on both text sections (the “Dare to ask, where next? Introducing the first ever XT5” text above the image and “The stylish” text just below the image). This suggests that while Millennials are still able to process information more quickly, they still will not absorb everything a Non-Millennial will. In the case of this advertisement, it may be problematic, as the text that was overlooked provides most of the detail about the car being advertised, and given a Millennial’s need to make a connection with the brand and the product, this ad will miss the mark.
Another advertisement tested as a part of the study shows the same results. A Gaze Plot indicates that both segments viewed the advertisement from top to bottom; however again Millennials do not linger over the add. Their average time of viewing
for this specific test was just over 3 seconds; for Non-Millennials, average time was just over 6 seconds. And again, Millennials followed a similar gaze pattern here, however notice the time spent (indicated by the size of the dots) was shorter and they almost completely failed to notice the “Drink responsibly” text at the bottom of the advertisement. For this specific advertisement, that may be ok. While obviously this company wants its consumers to drink responsibly, that is not the key focus of this message, and likely would not be a reason that Millennials are drawn to this brand over another.
Catching the eye of Millennials is challenging; despite their ability to process information more quickly, they still get distracted more easily and move on more quickly than their older counterparts. In the Eye Tracking study that was conducted, even advertisements that had significantly more text than others, did not catch the eye of Millennials for significantly more time – for example, some ads with large blocks of text prompted non-Millennials to take nearly a full second longer than the average length of viewing; Millennials instead took just an additional two tenths of a second. The car ad pictured to the left was one of the ads tested that included a significant block of text. For this ad, Non-Millennials averaged 8.6 seconds to view the ad; Millennials took just 3.75 seconds
What does this mean for marketers today?
Millennial women are the first generation to grow up in a truly digital age. They have been inundated with technology and advertisements since they can remember, and as a result they have developed an ability to quickly digest information and a very low tolerance for stagnation.
This female demographic needs constant entertainment and engagement, and has developed an incredible ability to sort through chaos and overwhelming amounts of information. Busy schedules, constant activity and significant drive means that women demand that information is disseminated quickly and efficiently. It is imperative that marketers use this information to their advantage. When designing advertisements, keep this demographic and the following behaviors observed in this study in mind: 1) a rapid assessment of advertisements, 2) the tendency to ignore multiple text blocks, and 3) the propensity to move on quickly no matter the amount of text. These insights should inform advertisement design and should result in creatives that are engaging but succinct. Calls to action must be clear, uncluttered and communicated efficiently, and important information should never be communicated with small fonts, long paragraphs, or at the foot of ads. Millennial women present a huge opportunity for marketers today, and with their growing ability to influence purchase decisions and impact the economy, marketers cannot afford to ignore this demographic in advertisement and creative design.
ABOUT BUG INSIGHTS
Bug Insights is a marketing analytics company that provides prescriptive analytics to help organizations make better business decisions. Using fact-driven data, Bug Insights consults clients how to best optimize the return on their marketing investments. Bug Insights assists organizations with a range of actionable research methodologies including focus groups, conjoint, A/B testing, data mining, and trade-off analysis. The company advises organizations of all sizes across a range of industry verticals including financial services, public policy, transportation, telecommunications, hospitality, manufacturing, retail, healthcare, higher education, and energy.
Founded in 2014, Bug Insights is headquartered in Houston and Atlanta. For more information, please Contact Bug Insights
at 713.425.4168, [email protected] or visit www.buginsights.com.
New Study by Bug Insights!
February 18, 2016
3 Misconceptions of Customer Loyalty
April 16, 2015
Conventional wisdom suggests that the best customers are loyal ones. It is widely believed that loyal customers cost less to serve, are willing to pay more than other customers, and act as word-of-mouth advocates for firms they like. For instance Kahn (2000) suggests:
By learning customer preferences and focusing on long-term relationships, managers can provide products and services that fit customer’s needs. They can also do this in a way that ensures loyalty… As relationships develop, customers will tend to buy more from a company. Further, the more a customer buys, the more likely he or she will be to buy from that company again. This virtuous circle is reinforced because the more a customer buys from a trusted company, the less likely he or she is to turn to another supplier. Finally, the regular customer is more likely to switch to a premium product or service.
Kahn believes that firms can develop long term relationships with its customers that produce a mutually beneficial relationship – satisfied shoppers, and retained customers – by addressing the underlying or latent needs of the customers. While it may sound like marketing Utopia, such claims are likely to be little more than smoke and mirrors, and rarely produce the results that are expected.
Reinartz and Kumar (2002) found that the relationship between loyalty and profitability is much weaker than the proponents of loyalty programs (especially the customer relationship management – CRM – software vendors themselves) claim. The authors examined the relationship between loyalty and profits from 16,000 customers in four company databases across four different sectors. Their research discovered that the link between customers and profitability is complicated, and that “not all loyal customers are profitable, and not all profitable customers are loyal.” Their results were hardly a ringing endorsement of the loyalty mantra: “The association [between profits and customer tenure] was weak to moderate in all four companies we studied, with correlations coefficients of 0.45 for the grocery retailer, 0.30 for the corporate service provider, 0.29 for the direct brokerage firm, and just 0.20 for the mail-order company.”
Specifically, they discovered little or no evidence suggesting that customers who purchase steadily from a company over time are necessarily cheaper to serve, less price sensitive, or particularly effective at bringing in new business. Each of these claims is discussed in more detail below. Claim 1 – It costs less to serve loyal customers
Advocates of the customer loyalty movement suggest that loyal customers pay their way because the costs of acquiring them are amortized over a larger number of transactions. This, by necessity, assumes that these customers were profitable in the first place. A second argument in support of this claim is that frequent customers are familiar with the transaction process; therefore, they require less hand-holding and the company should find that it is cheaper to transact with them.
Reinartz and Kumar (2002) discovered there is little empirical evidence supporting this claim. Many of the customers, especially those who do business in high volumes, know their value to the company and often exploit it to get premium service or price discounts. In one example, the authors revealed the cost-to-sales ratio for a mail order firm’s long standing clients is barely different than what it is for new customers; in both instances, it took over six cents (6.3 cents versus 6.5 cents) spent on marketing communications to generate a dollar’s worth of sales. They also concluded that customers who process their own orders through a website expect lower prices, which offset any cost savings that the company can achieve by using a cheaper channel to serve these customers.
Claim 2 – Loyal customers pay higher prices for the same products
Similarly, many supporters of loyalty initiatives believe that customers who stick to one company do so because the costs of switching to another supplier are too high, therefore they will be willing to pay higher prices (up to a point) to avoid switching.
While this argument may sound reasonable, Reinartz and Kumar (2002) suggest that the logical conclusion is less so; if loyal customers are worth pursuing because they will pay higher prices, then companies will charge higher prices. The authors argue that this is implausible in most contexts, where customers regularly guarantee greater frequency of purchases in return for lower prices. Evidence suggests, “Long term customers consistently paid lower prices than the newer customers did – between 5% and 7% lower, depending on the product category.” They concluded that, like corporate clients, consumers also expect – and get – some tangible benefit for their loyalty. In general, it appears in some instances that a loyal customer is actually more cost sensitive than an occasional one.
Claim 3 – Loyal customers tell their friends
The belief that loyal, satisfied customers are the strongest advocates for a company holds a great deal of attraction for marketers. Reinartz and Kumar (2002) discovered that the link between customer longevity and the propensity to market by word of mouth was not strong. This suggests that loyal customers are less likely than expected to be positive brand ambassadors, and that firms cannot rely solely on customers’ word-of-mouth advertising to support the brand message.
Reichheld (1996, and see also Finnie and Randall 2002) is one of the first practitioners to suggest that loyalty is more important than customer satisfaction. Reichheld argues that loyalty is the fuel that drives financial success, and that, “The only way a company can grow a loyal customer base it by building committed relationships with the employees responsible for serving those customers.” Firms identified by Reichheld as having a loyal customer base out-performed their competitors in the stock market by a factor of 2.2 on average during the 1990s. Bain & Company research (incidentally where Reichheld is a Director Emeritus) concluded that for some industries, a mere 5 percent increase in customer retention generates 30 to 40 percent increase in lifetime profitability, and by as much as 90 percent in industries like financial services and advertising (Finnie and Randall 2002).
Reichheld (1996) noted a gap between reported satisfaction and future purchase behavior. He suggests that among those customers reporting to be “satisfied or very satisfied”, between 65% and 85% will defect. In the automobile industry, where 85% to 95% of customers report being satisfied, only 30% to 40% return to purchase the same make or model again. His findings suggest the relationship between customer satisfaction and true customer behavior may not be nearly as strong as many managers believe. This finding underlines the need to go beyond looking just at satisfaction rates, and to develop an understanding of the measures connecting customer satisfaction with customer behavior, specifically retention.
The main arguments supporting existing models of customer satisfaction measurement are based on the premise that satisfaction equates to loyalty, and if we conclude that loyalty does not necessarily equal true marketplace behavior, then clearly a fresh approach to measuring customer satisfaction is necessary. Fortunately, a new model exists as explained by Tim Glowa, co-founder of Bug Insights in the e-book: Measuring Customer Satisfaction: Exploring Customer Satisfaction’s Relationship With Customer Behavior.
About Bug Insights
Bug Insights is a human capital and marketing analytics company that provides prescriptive analytics to help organizations make better business decisions. Using fact-driven data, Bug Insights consults clients how to best optimize the return on their investments. The company assists organizations with a range of actionable research methodologies including focus groups, conjoint, A/B testing, data mining, and trade-off analysis. Bug Insights advises organizations of all sizes across a range of industry verticals.
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