How to Learn from Customers via Consumer Panels
In this article, we show effective ways to learn from customers via consumer panels by 1) giving you an overview on consumer panels, 2) describing the different types of consumer panels, 3) explaining how consumer panels can increase sales, 4) the pro’s and con’s of using consumer panels, 5) how to conduct consumer panels, and 6) examples of industries that use consumer panels.
CONSUMER PANELS: AN OVERVIEW
A Consumer Panel is a term used to refer to a group of customers or consumers in specific areas or sectors, hired by businesses and research companies to answer research questions. These groups of consumers are recruited in order to know or take their opinion on ads, products and services provided by the business. These groups work like specialized panels that are part of many types of projects and research works. Consumer panels prove to be of great use for answering surveys, questionnaires, discussions and brainstorming thoughts.
A consumer panel can be considered as a common data collection technique that is used as a part of market research. Most of these panels work as groups of 10-20 people who are brought together in a same room for discussions, etc. these groups are thus sometimes mistaken as focus groups. The main reason consumer panels are used instead of taking general representatives to understand consumer feedback is that they offer specialized knowledge and feedback. A consumer panel thus proves to be a good cross-section of the entire population and consists of people from all demographics but of the target audience.
TYPES OF CONSUMER PANELS
We start with general types of consumer panel:
- Trendsetter consumer panel: These panels consist of the individuals who are trendsetters or are the first ones to adopt ideas and products. They help to gauge what is next and how customers are going to accept or reject future products.
- Brand loving consumer panel: These panels are made up of those who love certain brands so much that they will answer questions and surveys without any incentive being given. They love trying new products of the same brand and hence have the most honest replies.
- General consumer panel: General or generic consumer panel is a consumer panel that is organized by a company and functions similar to market research. It consists of random individuals who are recruited to answer a variety of questions in a variety of projects. The consumers are selected on the basis of their usage of products or services.
- Creatively inclined consumer panel: This is a kind of a panel which consists of individuals that are headed for the process of innovation. These are the general or regular consumers of a business or brand and are trained so that they can use their problem-solving skills to the best of their abilities.
Here are the types of consumer panels derived from the length of a panel:
- Transitory Consumer Panel: This is a kind of a consumer panel that is set up with the aim to comprehend the effect of a certain activity or phenomenon. This kind of a panel is conducted both after the phenomenon has occurred and also before it. In order to tap the attitude of the customer, initial interviews may be held whereas to comprehend the changes in these attitudes, post phenomenon interviews are conducted.
- Continuing Consumer Panel: This is another kind of a consumer panel based on the length and in this type; the panel is set up for an indefinite length of time. The main aim of such a consumer panel is to gather information on a certain aspect of customer behavior for an extended period of time.
Below is the list of the types of consumer panels based on their purpose:
- Usage panels: These panels are set up to understand or fathom why and how are the products being used. This tells businesses the types of opportunities present in the market and also the threats.
- Purchase panels: These are the panels that help to get an idea of the products bought and not bought, etc.
WHY CONSUMER PANELS HELP BOOSTING SALES?
Consumer Panels all across the world are helping in boosting sales, and the main reason behind this is the Hawthorne effect. Consumer panels are a scalable answer to utilizing this powerful effect. The Hawthorne effect was discovered in the 1920s by accident and was hence named after the Hawthorne production plant in Chicago. In this effect, the researchers from Harvard and MIT came to know that by asking employees to give their feedback on new working conditions at the workplace, they produced positive feedback and when the workplace was finally ready, the overall productivity came out to be a lot better. As an example, when the workers were asked to give the opinion on the option of better lighting conditions in the factory, they gave their position opinion. When the factory started, and lighting conditions were better, they were motivated to perform better. But the same occurred when employees were tested for dimmer working conditions.
Another study was conducted at the Hawthorne power plant in which researchers deduced that involving employees in research to evaluate lesser work timings resulted in better productivity. But the same happened when employees were engaged in evaluating longer work timings. The researchers came to an interesting conclusion that all that mattered to employees was their involvement and not what was being tested. This is where the definition of Hawthorne effect came into being-engaging people in marketing research leaded to loyalty and advocacy as they tend to feel more privileged, valued and important. For marketers these days, this effect is a superb chance of engaging consumers in research and getting their loyalty as a bonus. Of course, increased sales automatically follow.
These days, online consumer panels are a new way to practice and utilize the Hawthorne effect in order to create customer loyalty and prove as a win-win for both the buyers and seller.
THE PROS AND CONS OF CONSUMER PANELS
Consumer panels are an effective way to gather data and collect information from specialized consumers. These groups of people prove to be very useful for market research, but there can be certain disadvantages of hiring them. The following are the advantages and disadvantages of consumer panels.
General Advantages of consumer panels
- Help in identification of changing consumer behavior: One of the main or most important benefits of consumer panel is that it helps in tracking and identification of changing consumer trends, preferences, and behavior. These panels may go on for extended periods of time and hence help to evaluate the change seen in the way consumers behave in general. Researchers may make use of trials and experiments to find the change in customers’ likings towards certain brands.
- Create a loyal effect and boost your sales: Another benefit of consumer panels is that such groups or panels help to create a trust and loyal effect among the customers as they feel that they opinion is valued, and their choices matter to the business or brand. This in turn leads to an increase in the sales and thus increases overall profits.
- Being closer to customers when developing a new product and getting high level of specific information from customers: It is a fact that the businesses that stay closer to customers and include them throughout the process of product development are more at a chance of obtaining more information and data from them. The impact of engaging people in marketing research makes them feel welcomed and hence help to extract honest opinions from them.
- Accurate data: Another major benefit or advantage of consumer panel is that this method of research helps to obtain accurate data since these panels are comprised of people covering the cross section or various demographics.
- Distribution information: Researchers and business owner make use of consumer panels to evaluate the effectiveness and availability of the main outlets or distribution. One can easily collect several random samples, and this helps the business to make the right decisions. Businesses can also thus analyze the contribution from different outlets.
General Disadvantages of consumer panels
- Biased responses: One of the major disadvantages of using the method of consumer panels is that the participants or consumers may not always give an honest and true feedback. This could be either that they wish to help you or just don’t want to divulge correct information. Some of them may provide opinions that they think they should rather than what they truly think so that they are asked to be panelists the next time as well.
- High expenditure: As compared to other methods of research, consumer panels can prove to be expensive. There goes a lot of time and money to organize such panels and then conduct them.
- Participant loss: Some consumer panels go on for long periods of time and sometimes even a span of months. In such a case, some participants or consumers may choose to drop out. This loss of participants is yet another disadvantage.
- Difficulty in sample collection: In some cases, it may become very difficult to get a random sample because the consumers chosen as panelists may not always think like your target audience, and there may be variations in their feedback.
Advantages & Disadvantages by type of consumer panel
- Trendsetter consumer panel – One of the advantages of this type of consumer panel is that the panelists in it are usually a lot more forward thinking as compared to regular customers. But, on the other hand, their feedback may not reflect the thinking of the regular customer base, and this may push a business in the wrong direction.
- Brand loving consumer panel – It is easier to engage and involve this type of a consumer panel but, on the other hand, the disadvantage is the fact that their opinions may not match with that of the general public.
- General consumer panel – Generic consumer panelists can be used efficiently and quickly, but the negative associated with this type of panel is that do not provide quality higher than a focus group.
- Creatively inclined consumer panel – As far as the innovative process is concerned, one can get customer-centric solutions but it takes a lot of effort and commitment to conduct and use these types of panels.
HOW TO CONDUCT A CONSUMER PANEL?
In order to conduct and organize a consumer panel, a business or research agency needs to follow some steps, and they are given as follows:
Step #1: Define a problem you would like to analyze with your consumer panel
The first step is to define a problem that you wish to address or analyze with the help of a consumer panel. If you do not have an objective to reach or a problem to solve, then you will be lost during the process of organizing consumer panel. You must be very clear about the reason for the research or study and only then move forward.
Step #2: Define the format and the required size for the consumer panel
The next step is to chart out a format or method to conduct the panel and determine how many participants you would need; how long the consumer panel will go on and how will you acquire the participants. You must have a clear idea of these things and also about the main researchers that you would involve from your side.
Step #3: Recruit & Select consumers representing your target group
The next step is to select and recruit those consumers who can easily represent your target audience or market. The participants chosen must satisfy a certain demographic condition that is closer to your potential consumer base.
Step #4: Collect information and analyze the data
Now that participants or consumers have been gathered, the next step is to collect suitable information through methods like surveys, interviews, questionnaires, discussions, etc. and then analyze the collected data. The data must be evaluated, common and reoccurring feedbacks must be clubbed together and the most popular answers must be recorded.
Step #5: Interpretation of results and thinking of how you can make improvements to your business based on the learning from the consumer panel
After analyzing the data, the next step is to interpret it and find out ways that can help the business to improve through the end result of the findings. This can involve making product changes, service improvements, marketing changes and others.
USES OF CONSUMER PANELS BY INDUSTRY
There is no denying of the fact that consumer panels are extremely beneficial and useful. There are plenty of uses for such panels, and their uses can also be divided industry wise. The following are some uses of consumer panel by industry:
In the telecom industry, there are many benefits of employing consumer panels and most companies may utilize huge consumer panels to gain a detailed and actionable feedback and results. Such panels may help businesses to answer the following questions:
- Who can be the potential consumers and where can I find them?
- Will new customers have any impact on the business and if yes, then what kind of impact?
- How likely are existing customers to use new products and services offered?
Consumer panels are also capable of providing many insights and throw light on several important areas and aspects of a telecom business, and some of these aspects are given as follows:
- Customer experience and journey
- Data sent, calls made, SMS allowance
- Customer loyalty and switching rate
- Installed base
- Sales and promotions
- Customer demographics
- Amount spent on bills, apps, and phone handsets
- Net promoter score
All consumers around the world spend considerable amounts in fashion, and the apparel and fashion industry is one of the most preferred areas of expenditure for a lot of people. This industry religiously uses the method of consumer panels to gain insight into the minds of the target population. Consumer panels help fulfill several purposes and can answer some important questions as far as consumer liking, taste, budget bracket, dislikes and shift in mood is concerned. These panels can monitor the shopper’s behavior, the industry dynamics as well as the market trends.
In the world of fashion, consumer panels can also help gain an understanding of the following:
- Shopping behavior and trends in different demographics
- Brand profit and performance
- Price changes and evolution
- Popularity of brands
- Popularity of styles
- Benefits of promotions and marketing
- Market shares
- The importance and growth of online fashion retail and mobile fashion retail
3. P&G Case Study
Procter&Gamble or P&G consists of over 75,000 members in its two consumer panels that are named Vocalpoint and Tremor. The panelists of these groups are recruited or found through word of mouth and banner ads. They are given the task of commenting or giving their feedback on promotional material, logos, pack design and new flavors etc. this movement of the company not only creates a loyalty effect but is also simple and scalable. Some of the activities that the consumer panels of this company have been involved in and still are include:
- Picking model for the Pantene commercial and body spray calendar.
- Voting on product designs
- Choosing the logo for teen movies like Win a Date with Tad Hamilton.
- Selecting backing music for ads and videos like the Pringles commercial.
- Helping develop billboard campaigns
- Helping in promotional tactics
- Naming movies, for example, the panelists helped name the movie ‘Eurotrip’.