Category Archives: Commercial Banking

QR Codes: Don’t Hesitate, But Do Think

No one who sends out any significant quantity of response-driven direct mail should neglect to test the use of QR codes. Period. Given the continuing growth of the use of smartphones, it’s a strategically sound opportunity to improve response rates by facilitating the connection between a mailed piece and an electronic response. Recent data from comScore MobiLens highlights the opportunity: 14 million mobile users in the US scanned a QR code on their mobile device in June 2011 alone.

That being said, the devil, as always, is in the details. Just sticking a square filled with dots on a DM piece is a waste of effort if you don’t think through what the objective of including the QR code should be and your expectations for the entire user experience that will be activated through the code. For example:

  • Are there certain segments of your audience that are more likely to respond to QR codes and how and when are they likely to scan the codes? To answer this, you’ll need to assess what percentage of these segments own smart phones. Then you’ll need to determine the likely scenarios in which they might use those phones in response to the presentation of a QR code?
  • If the code will be used as mechanism for increasing awareness of a product or service, are you sending the QR code user to a mobile friendly website? Is the information easily and comfortably accessible on a mobile device (e.g., web pages as opposed to pdfs, which are still often hard to view on mobile phones)?
  • Will you be using the code for lead generation? If so, is your lead capture form built to be completed on a mobile device?

Working through these kinds of questions should not dissuade you from using QR codes, and it’s important to remember that the process won’t guarantee that a QR code will provide significant lift to your DM efforts. But by investing the time in planning, you will ensure that your test of integrating the QR codes will be an accurate read of their current potential impact for your audience.

Treat growth projections with caution

Recently, there has been a lot of coverage on the emerging mobile commerce sector, with various stakeholders launching trials and developing initiatives to develop a strong market position. In addition, there have also been numerous projections on the expected growth of this market in the coming years. Some of these projections are quite reasoned, but others are more outlandish, and appear to expect that in a few short years, mobile commerce will displace cash, checks and plastic.

These exaggerated growth projections garner headlines for the research firms as well as companies sponsoring the research.  However, in many cases, the reality tends to fall short of the projection.  For example, future projections of card spending made in 2005-2006 were not realized, as the industry was hit by a largely unanticipated financial crisis and economic recession in 2008-2009.

Growth projections typically suffer from a number of deficiencies.  One of the main problems is that researchers start their research by thinking of themselves as the average consumer, which then leads to biases in the research process. In addition, researchers often tend to take an overly-optimistic “blue sky” view, which does not factor in forces that can compromise the growth trajectory. One of the most powerful of these factors is inertia. Consumers typically need to have a compelling reason/motivation to change behavior, and will not automatically adapt behavior just because a new technology hits the market.

It should also be noted that the industry and general business press tend to use these projections from these research firms/analysts/sponsoring firms to fill column inches, without checking back to see if previous projections by those same firms were actually accurate predictors.

Getting back to mobile commerce, there is indeed reason to believe that the rapid penetration of the smartphone and consumers’ increased comfort with mobile apps augur well for strong growth in the mobile commerce market. However, we also need a sober assessment of some of the factors that may impact that growth; in addition to inertia, these include security and privacy concerns, regulatory developments, merchant acceptance, general economic growth, emergence/evolution of competing payments methods, and the need to develop a business model that will satisfy all stakeholders.

Market Research Pitfalls, Part 2: Avoiding the “now what do we do with this information” problem

How often have you been presented with market research that, even if well executed, leaves you saying “that’s great, now what do we do with this information?” In our experience, this happens with remarkable frequency and stems from the fact that those responsible for commissioning and even conducting the research fail to keep in mind the most fundamental tenet of any research initiative: you have to be able to articulate how the insights gained will affect future strategy decisions.

Like any investment, research should be justified through its impact on the top and bottom lines. The exercise of building the case for strategically important research should lead to the development of valuable insights because building the case requires defining exactly how the research will impact strategy. Thinking through and committing to a set of strategic insights enables the design of more efficient research because it forces the definition of what should—and shouldn’t be—included in the research objectives. If you can’t articulate how an element of the research will deliver insights that can lead to meaningful, strategic decisions, you shouldn’t include it.

Developing a strategic justification for each question pushes aside superfluous questions and forces the research instrument to be lean. In this regard, the exercise serves as a powerful tool for beating back the almost inevitable requests for additional questions that don’t deliver on the strategic objectives. As with the overall research objectives, any additional question that fails this “describe the strategic insight” test should be targeted for elimination.

Defining the strategic justification for every research initiative and all its components may seem to be too significant an effort, but the investment will deliver multi-faceted benefits in both the short and long terms. Articulating the strategic value and impact of the research and questions reduces waste in the research design phase by pushing aside extraneous elements and questions. This, in turn increases the efficiency of the research as it leads to more precise surveys and interviews that enjoy a better completion rate and more reliable data. Finally, this exercise ensures that when it comes time to report out on the research findings, the link between the insights and strategic issues is easily and powerfully expressed—which strengthens the organization’s confidence in the value of the research and ability to apply it.