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7/31/2008 - Pushing the Boundaries of Research

A 'disruptive' company is changing the way marketers understand the consumer-brand relationship

TORONTO - July 31, 2008 - How do you get consumers to express their true feelings about brands? How do you use this information to predict consumer behavior and ultimately a brand’s market share? These are just some of the questions Ted Langschmidt, Executive VP of Innovation and his team at Hotspex, were addressing in an exclusive conference call with more than a few of the company’s key clients, in July 2008.

In late 2005, after extensive secondary research, Langschmidt’s team embarked on a quest to break away from the confines of conventional marketing research. This July, Langschmidt presented the highlights of Hotspex’s research program involving seven pilot studies - spanning the past two years - with over 28,000 interviews in the development and validation of the MarketSpex brand positioning and equity measurement technique. “Traditional marketing research has been notoriously bad at predicting customer and consumer behavior, because people cannot tell us what they really want, or even what they think or feel,” says Langschmidt.

Although our conscious, rational minds exert a powerful influence on our behavior, it is little more than the power of veto. “We don’t have free will, but we do have free won't,” Langschmidt quotes psychologist, Richard Gregory. The first pilot focused on identifying the lexicon of emotions as the unconscious or soft drivers of human behavior. One of the findings from this stage of the research was that “while happiness was the top-mentioned emotion, tiredness was the emotion (respondents) experienced at the highest level,” observed Langschmidt. He went on to show how gender differences in the ability to recognize emotions appear to be small.

“You can expect people to react, but not to articulate,” said Langschmidt, who has contributed his lifelong learning to the MarketSpex development process. While other companies in the marketing research industry are busy leveraging hardware - electroencephalograms, fMRI scans, and facial coding - Hotspex is leveraging the internet to help consumers identify their true feelings using ‘identikits’ of emotion and projected brand personality in their surveys. Research results become much more powerful and predictive when you factor in the subconscious drivers of decision-making, regardless of whether you are speaking to consumers, customers or any other stakeholder groups.

Later-stage pilot studies explored: 1) using multi-dimensional scaling to map the intra-relationship within the lexicon of emotions as well as the inter-relationship between brand personality attributes and emotional states – emotional and personality attributes are analogues of each other; 2) linking life goals to individual consumer needs and in-turn product benefits; 3) laddering product benefits to emotional states; and 4) mapping the non-verbal dimension, i.e. images, shapes, colors and patterns.

The proof, however, is almost always in the pudding. In this case, the ‘pudding’ was the learning from the latest pilot that measured the impact of emotions, brand personality, rational attributes and product benefits (individual goals) on consumer behavior with over 100 brands across 34 categories. The results of this study showed that emotions have as great an impact on behavior as rational brand attributes. “We can calculate the actual impact of all emotional and rational attributes on behavior, by comparing their claimed importance and deduced importance,” said Langschmidt.

Emotions indeed have a powerful impact on our ability to predict behavior. “By measuring emotions, brand personality and rational attributes, we can improve the accuracy of existing models to explain or predict behavior from 65% (as it has been traditionally) to 85%,” said Langschmidt. In fact, results showed that functional benefits alone are 60-70% predictive of brand usage, but do not predict brand loyalty. Emotion is a far better predictor of brand loyalty and usage.

Creating value for their clients, through continuous improvement and discovery, is a key business objective for Hotspex. Roughly a third of the company’s staff is dedicated to internal innovation and new product development. “We have invested more capital, pro rata, than any other marketing research company in advancing our capabilities,” said Shane Skillen, Founder and President of Hotspex. “The development program for our flagship research technique (MarketSpex) has been a critical in the development of our company.”

For additional information on Pushing the Boundaries of Research, please contact Gera Nevolovich at Hotspex, +1.416.487.5439, ext.227.

About Hotspex Inc.
Hotspex constantly pushes the boundaries of what marketing research can do and how it can be done, by engaging consumers and clients to uncover the emotional and rational drivers of behavior and by delivering business insights that empower the world's leading companies to develop winning brands, strategies and innovations. For more information, please visit: www.hotspex.biz

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