The Indisputable Value of an Effective Qualitative Data Practice
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Qualitative data is perhaps one of the most critical parts of modern organizational strategies today, yet many enterprises don’t know where to start collecting it or how to collect it properly. Even more of a struggle is analyzing the qualitative data available to extract insights that can shape the trajectory of the business as a whole. With emerging technologies, such as Large Language Models and Generative AI breaking onto the enterprise scene with force, organizations today want to dive in and leverage these tools for maximum growth. There are more opportunities than ever to take data and speed the time to insights, but it all starts with having the right data to train these models on and the right strategic framework to extract the best insights to deliver higher ROI on your marketing campaigns, higher ROAS, lower CAC, higher LTV, and lower churn rates.
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The Indisputable Value of an Effective Qualitative Data Practice
- 1. The Indisputable Value of an Effective Qualitative Data Practice Identify Values & Beliefs Values & Beliefs Values & Beliefs Values & Beliefs Affirming Statement Core Trait Affirming Statement Affirming Statement Core Trait Core Trait Core Trait Identify Core Why Business Why
- 2. The Importance of a Sound Qualitative Data Practice Qualitative data is the color that gets added to the black-and-white findings of quantitative data. Adding nuance, context, and emotion changes the story being told and the strategy that stems as a result of those richer insights. Qualitative data equips companies to marry experience and technology seamlessly with invisible marketing. HUMAN BEHAVIOR IS MESSY
- 3. Qualitative Data Prioritizes Experience Over Attribution. “Some people say give the customers what they want, but that's not my approach. Our job is to figure out what they will want before they do. - Steve Jobs, Former CEO of Apple
- 4. Qualitative Data for Modern Organizations Qualitative data offer detailed insights into a buyer or employee’s emotional triggers, delivering an unparalleled depth and understanding of why someone behaves the way they do. Rich Data Personal Directional Information Purchase Triggers Easier to Discover, Analyze, etc. Expensive Difficult to Interpret Difficult to Make Comparisons Great Hires Costly & Difficult to Recruit Less Costly Easier to Validate Easier to Collect Statistically Robust Data is Limited/Missing Lacks Depth & Can Be Misunderstood Needs > Sample Size Different to Sheer Size of Data QUANTITATIVE QUALITATIVE QUANTITATIVE
- 5. Adding Context With Qualitative Data Going deeper requires a more mature approach to uncovering why someone acts the way they do and leveraging those insights to make critical business decisions about your organization’s next steps. Mature organizations recognize that more depth is required beyond analyzing the marketplace and gathering a few answers to survey questions. What Happened Why It’s Happening Where is the Attention Going What Will Happen Quantitative Data Enters the Picture Level 1 Level 2 Level 3 Level 4 Level 5 What’s Happening
- 6. Adding Context With Qualitative Data Leveraging insights from qualitative and quantitative data looping allows organizations to reduce customer acquisition costs, increase lifetime value, and operate more efficiently. Pinpointing why someone behaves, makes decisions, or has the mindset they do, you can better understand where to focus your attention. QUANTITATIVE DATA VISUALIZATION DASHBOARD QUALITATIVE DATA VISUALIZATION DASHBOARD
- 7. At the start of 2020, Netflix saw tremendous growth and positive sentiment as viewers binge watched trending series, such as Tiger King. Customer Sentiment is in the Driver’s Seat Customer sentiment drives both acquisition and retention, but outside business forces directly impact how customers think, feel, and buy today. No matter how strong a company might seem, ignoring outside business forces could spell steep and swift declines. In 2020, Netflix went from riding a fan favorite win to quickly getting canceled due to a release of certain content that many saw as inappropriate. IMAGE: NETFLIX 20M 15M 10M 5M 0M 2019 2020 2021 2022 2023 As Netflix partnered with outside publishers and adjusted pricing tiers, sentiment improved and allowed their growth to bounce back. Sentiment and subscription numbers dropped quickly after the release of Cuties, a series that viewers felt was inappropriately portraying children on screen. This series led to many calling for Netflix to be canceled.
- 8. How the Pizza Industry Was Impacted by Pandemic Behaviors Pandemic or not, when consumers hear the word pizza, they typically think of delivery. When the shutdown happened in early 2020, many people turned to pizza delivery services to put food on their tables because that was the only type of food they felt they could have brought safely to their homes. The pizza industry skyrocketed during the pandemic because people's cognitive associations with pizza and delivery were Papa John’s Sales Increase During the Pandemic Domino’s Pizza Sales Increase During the Pandemic Pizza was the most resilient during the pandemic because customers associate the term “pizza” with “delivery.” Pizza Chicken Fast Casual Burgers & Others Coffee/ Bakery Casual Family Gained Market Share Neutral Lost Market Share 17.6% 11.5%
- 9. Marketing Through Osmosis Simply Does Not Work No amount of guesswork will ever replace the profitability of a strategic framework. Flashing your product at the market won’t work. It’s flashing a benefit that triggers your customers to take action that will skyrocket the ROI of your campaigns. 1986 1987 1990 2001 Texas spent $20 Million in litter clean up. Led to a 29% decrease in litter 70% reduction in litter on roadways 52% Litter decrease between 1995 - 2001
- 10. Pains Motivations Solutions Measurements Cognitive Associations Pains Motivations Solutions Measurements Cognitive Associations Cohort First-Time Buyer Employee Customer EX / CX EMPATHY MAP Extracting Action-Inspiring Insights via Qualitative Data Marketers won’t understand consumer pain points until they’ve taken the time to walk a mile in the user’s shoes and empathize with them. Going deeper into user behaviors allows teams to infuse qualitative data rooted in behavioral insights into the organization’s messaging, sales strategies, and more. Cohort Employee Customer
- 11. Empathy Mapping Builds Campaign ROI Understanding how to compete for mindshare when you need their attention the most means capturing attention when your customer’s distracted by dozens of other thoughts, feelings, and noise, pulling their mind away from your brand or offer.
- 12. Of purchases are planned Where Attention Goes, Money Follows Qualitative data isn’t exclusively about the digital experience. Ikea designed their brick-and-mortar experience to give customers ample room to explore and find their needs. Adding a food court to satisfy shopper hunger determined that shoppers who ate inside of Ikea’s food court were twice as likely to spend money on home furnishings than those who did not. How Qualitative Analytics Influences Ikea’s Store Layout ~40 % ~60% Of purchases are impulsive Fixed path store layouts ensure customers see more products. Customers who eat in the food court spend 2x more on Ikea’s products Customers don’t know if they’ll have access to a product again, so the principle of scarcity makes them more likely to buy. U-turns every 50-feet cause the customer to anticipate what’s waiting behind the next corner. Mirrors are strategically placed to allow shoppers to see themselves in each room. Versus Traditional Layouts FreeForm Spine Racetrack Grid Ikea Layout ~6 out of 10 Ikea purchases are unplanned
- 13. Becoming Insights-Centric Requires Quantitative and Qualitative Data Practices The assumption that dips in growth are guaranteed to turn around and trend upward again causes many organizations to lose sight of critical data points. Critical data points, including quantitative and qualitative data, signal whether the organization is going through a seasonal dip in sales or is on the brink of a major trend that could have a long-term impact. The S Curve of Business Growth Start Strategic Inflection Point Inflection Points Vary If You’re Growing You’re Shifting Sustain Forward Momentum Scale Growth Start TIME GROWTH
- 14. Quantitative Data Warning Signs Quantitative data alone cannot put color into the picture to tell us why something is happening. Answering the question of why something happened is paramount when diagnosing growth concerns. New Laws Enacted Following Event Major World Event $600 $500 $400 $300 $200 $100 Spike in Trending Keyword Spike in Trending Keyword Spike in Trending Keyword Spike in Trending Keyword $100,000 $90,000 $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 6/22 7/22 8/1/22 8/22 9/22 10/22 11/22 12/22 1/23 2/23 3/23 4/23 5/23 6/23 7/23 8/23 9/23 10/23 P.A.
- 15. Shifting Focus Can Shift Your Growth Trajectory How do you attach black-and-white numbers to nuanced emotions, situational context, and cognitive associations? Getting to this depth of insight goes well beyond attaching a number to verbal responses. You have to understand why loyal customers choose to stay versus switch to a competitor. That analysis is faster and more accurate when it’s categorized correctly. Launched Swagger campaign following qualitative data insights and saw a rise in brand sentiment. Quantitative Data Warning Sign: Dip in brand sentiment among males 18-34 Buzz: Males 18-34 Swagger Deodorant Sales Old Spice Swagger Launch +400% Sales Growth
- 16. Categorizing Qualitative Data By graduating away from generic assumptions and stereotypical personas, teams can leverage qualitative data to unite around a handful of central ideas spanning various personas. Binary Data Some data has two mutually exclusive parameters. ● Republican vs. Democrat ● Truck vs. Sedan vs. Cyber Truck ● Apple vs. Orange ● Pregnant vs. Non Pregnant ● Round vs. Square ● Big vs. Small ● Red vs. Blue Ordinal Data Data that can be organized in a specific order. ● Satisfaction Preference ● Age Groups ● Best, Middle, Worst ● Largest to Smallest ● Five Star to One Star Reviews Nominal Data Data you can classify and label into multiple categories without numbers. Minivan driver who: ● Prefers to drive a Ferrari ● Loves being a mom ● Transports bikes, skis, or equipment Gun owner who is a: ● Bank runner at GameStop ● Mother picking up her kids late from soccer practice ● Business owner in a rough part of town ● Right wing political pundit ● Left wing political pundit
- 17. Purchase Intent is Driven by Behavioral Economics The Hawthorne effect occurs when people behave differently under observation than they do behind closed doors. The way a user portrays themself to the world is often different from how they act when they think no one is watching. When analyzing the intent behind a purchase, it’s important that behaviors and qualitative data are not taken at the surface level. Emotional Drivers of Impulse Spending on Candy at Checkout: ● Shopper decision- fatigue ● Reward for well- behaved children ● Suggestive reward for the shopper $6 Billion Impulse spending on candy in checkout aisles
- 18. Context Matters When Gathering Qualitative Data Trigger Reactive Proactive What/Where When/How Why Will Automation: Activities and systems are automated invisibly to improve performance to reduce human error and improve reliability. We want to evaluate performance within our marketing mix, sales ops, and operations. We want to evaluate a change in performance over time and apparent correlations. We want to understand the external and internal key drivers of consumer behavior in the decisions to buy and stay. We want to product how emerging trends will impact business financial health if they continue. We want to understand how micro events within our organization and workforce can be optimized. Metrics are pulled manually either within a single channel or into spreadsheets for analysis. Additional charts and decks are built to illustrate metrics in motion to relevant teams. One-off studies or activities are run to answer why, usually only following an abnormal spike, crisis, or issue. Mean-based data is pulled together from various sources to inform action for a fixed window of time. Ad hoc engagement data is captured and observed to inform the integration of business units to drive growth and reduce costs. Data points are joined into an automated system to report for specific analyses. Dashboards are standardized to inform teams of their historical performance in the organization. Insights are democratized at a regular cadence to evaluate product-market fit, anticipating market forces. Several distance measures and data arrays are measured with ML to proact known trends and optimize performance. Automated systems leveraging AI/ML ensure alignment in people, processes and platforms to efficiently execute the business model. HINDSIGHT INSIGHT FORESIGHT
- 19. Surveys Alone Aren’t Enough for Qualitative Data Analysis Surveys are undoubtedly one of the more biased forms of qualitative data collection. This tendency for respondents to bend their answers, leading to inaccurate insights, often stems from something called Target chuting. Target chuting occurs when a surveyor asks an open-ended question, driving respondents to be less decisive and closed off to what they’re feeling in their subconscious. Target Chuting “ARE YOU HAPPY OR UNHAPPY?” Offering options allows the respondent to make a decision rooted in their own emotions and lived experiences. “ARE YOU UNHAPPY WITH YOUR LIFE?” When we ask a respondent to look for something, they’ll often see it. Phrasing the question in this way increased the number of respondents declaring themselves unhappy by 375%. Offering Options Survey Approach
- 20. Surveys Can Send Teams in the Wrong Direction — and Fast Sifting through lengthy, dense responses takes a lot of work. It also requires human interpretation, which has the potential to go wrong and go wrong fast. That incorrect analysis on an ad hoc basis sends teams chasing inaccurate responses and trying to figure out why the data doesn’t add up. Something that happened today isn’t the same reason that it will happen tomorrow, next month, or next year. It’s not the same reason it could happen in one part of the store versus across the parking lot.
- 21. Qualitative Data Steers Your Marketing and Sales Messaging Instead of tapping into poignant messaging that addresses all potential customers in one fell swoop, organizations limit their approach to person-based marketing. To get in front of a wider group of people without diluting the messaging means we need to know which messages resonate rather than which channels bring in new leads.
- 22. Qualitative Data Lets You Discover Your Total Addressable Market Your total addressable market consists of every area where there’s possible revenue. Total number of people in every area where there’s possible revenue. The total number of people in your target market. The people you reach with your sales and marketing channels. The share of customers you win out of your serviceable available market. Total Addressable Market Total Available Market Serviceable Available Market Serviceable & Obtainable Market
- 23. Think Cohorts Over Personas Buyer personas present an inherent challenge. Teams often approach these exercises through a self-reflecting lens, focusing more on attribution than contribution. Singular focuses keep organizations from tapping into emerging markets, markets with unmet needs, and fresh new customer potential. We opt for a cohort- based approach to break free from that relentless focus on singular personas. Cohorts Behavior of the segments Personas Group of customers Segment s Attributes of the group
- 24. You Don’t Have to be Everything to Everyone. Qualitative data can uncover what ties your people into one cohort. Rather than fragmenting the brand through persona-based silos, you can empower others through a common thread that brings people together. “People don’t buy what you do; they buy why you do it.” ~ Simon Sinek And from that point on, there is no finish line. You run for your life. You begin to be addicted to what running gives you. We at Nike understand that feeling. There is no finish line for us either. We will never stop trying to excel, to produce running shoes that are better and better every year. Beating the competition is relatively easy. But beating yourself is a never ending commitment.
- 25. Uncovering Shared Criteria Buyers themselves don’t recognize the stream of thoughts in their subconscious. Through qualitative data analysis of cohorts, enterprises can unpack what inspires a person to take action versus what gets ignored in marketing. To paint a picture of how assumptions can vary wildly from what’s really happening inside of a buyer’s heart and mind, consider the study of why images of clouds get people to buy more expensive couches instead of images of coins.
- 26. What Happens When a Company Stops Resonating Purple’s Goldilocks ad proved powerful because it was different from the other ads on the market. While Purple did an excellent job aligning consumer expectations with their product initially, they failed to spot cues they would have seen from proper qualitative data analysis.. Goldilocks Ad Product Expansion Entered Retail Human Egg Test Continued Expansion McDonough Manufacturing Continued Product Evolution 2016 2017 2018 2019 2020 2011 2022 2ND YEAR DECLINING EBITDA
- 27. Getting to the Primal Drivers of Your Total Addressable Market Maslow’s pyramid defines humans' core needs to live healthy lives. The biological and safety levels are important, but they do not inspire someone to take action. As you move up the pyramid, once the foundational and logical needs are met, you’ll notice that people need much more. It’s those needs that drive modern users to buy. SELF-FULFILLMENT NEEDS PSYCHOLOGICAL NEEDS BASIC NEEDS Meeting one’s full potential in life, different for every person. Respect, status, recognition, strength, self-esteem Friendship, intimacy, family, connections Security, health, finances Food, sleep, water BIOLOGICAL & PHYSIOLOGICAL SAFETY LOVE & BELONGING ESTEEM SELF- ACTUALIZATION
- 28. Of respondents agree watching horror movies together is a great date activity. Qualitative Data Analysis Gets to the Core of the Consumer Why Together, Tinder and Peacock brought their Total Addressable Market together via a common core why to what they wanted the most — connection. They then broke out one cohort, people in the dating pool, to identify new ways these people sought connection. Their study determined that horror movies were the new dating trend — not RomComs as had been believed for years. 51% Creates an opportunity to get physically close 3rd Date Is the most common for watching a horror movie together 46% Share a thrilling experience Of dates agree a shared interest in horror can signal compatibility
- 29. Tapping Into Qualitative Data to Find Your Core Why Determining how to drive the brand and customer experiences closer together is best done by leveraging a framework called StoryVesting™. Business Why Core Why Identify Identify Values & Beliefs Values & Beliefs Values & Beliefs Values & Beliefs Affirming Statement Core Trait Affirming Statement Affirming Statement Core Trait Core Trait Core Trait
- 30. Understanding Decision- Making Behaviors By understanding how organic and synthetic stimuli impact decision-making, enterprises can adjust how they create and market their products. Understanding a desire for any product requires understanding the core why behind what’s really being purchased. Emotional Triggers Relevancy Time vs. Effort Expectations Brand Trust Experience
- 31. Spotting Precise Moments of Conversion and Churn Cohort analytics is an analytical method that pinpoints the exact moment customers experience the emotional and logical triggers that move them through the customer journey. Knowing these moments can help you widen your TAM by understanding what’s really happening between the ears of potential buyers. Not only do you see when the consumer takes action, but you also see when a customer stops taking action. Retention Over Product Lifetime Retention Over User Lifetime
- 32. Qualitative Data Requires Looking Beyond Rational Thought. “The only test of rationality is not whether a person's beliefs and preferences are reasonable, but whether they are internally consistent - Daniel Kahneman, Nobel Prize Winner
- 33. Equipping Your Team to Achieve Higher ROI Modern businesses must look at a constellation of North Star metrics to truly understand which factors impact cost of acquisition (CAC) and lifetime value (LTV). Without having a variety of data sources to pull from, both quantitative and qualitative, you won’t be able to see the volatility across those numbers and understand how outside sources could impact your organization. Problem Analysis EX 2 to CX6 = competitive experience issue. Problem Analysis EX 3 to CX 5 = comparative review. Figure 1 Figure 2 1 2 3 4 5 6 6 5 4 3 2 1 1 2 3 4 5 6 1 2 3 4 5 6
- 34. Tapping Into Qualitative Data to Find Your Next Steps The North Star Metric helps teams navigate the right next steps for your goals. Employee experience (EX) improves because teams see how they contribute to the organization’s success. By not having employees who are excited about their jobs and connecting with customers across all layers of their organization, the customer’s experience will suffer. Overall Rating Overall Rating Culture & Values Diversity & Inclusion Work/Life Balance Senior Management Compensation & Benefits Career Opportunities Culture & Values Diversity & Inclusion Work/Life Balance Senior Management Compensation & Benefits Career Opportunities Employee Sentiment Employee Sentiment CEO Approval CEO Approval Recommend to a Friend Recommend to a Friend Positive Business Outlook Positive Business Outlook 63% 60% 47% 57% 54% 46%
- 35. How Quiet Quitting Impacts Qualitative Data Analysis Ongoing and intentional conversations with employees, starting with management and moving throughout the organizational chart, allow the C-Suite and Directors to gather valuable qualitative data in more of a real-time capacity. To what extent are you currently looking for a different job? Employees who are looking for a job or watching for opportunities. Actively Disengaged Not Engaged Engaged Tota l September 2019 % March 2021 % 69 74 51 55 29 30 48 46 % Engaged % Actively Disengaged 2000 2002 2004 2006 2008 2010 2012 2016 2018 2014 2020 The dip in employee engagement directly correlates with an increase in employees seeking new jobs
- 36. Generative AI and Qualitative Data Speed Up the Time to Insights and ROI Tapping into AI to start and enhance your qualitative data practice requires you to know proper qualitative data collection, your TAM, and how to properly categorize the responses. Better inputs give better outputs. With that foundation laid, you can feed what you’ve collected more accurately into a private LLM, fine-tuning the data via chain learning. Generative AI Has a Steeper Initial Adoption Curve Than Other Recent Technologies Millions of US users Generative AI 2022 - 2025 Smartphones 2007 - 2010 Tablets 2010- - 2013
- 37. Activating Your Qualitative Data for Faster Business Impact Once you’ve established a strong qualitative data practice, fed that data accurately into a private LLM, and tapped into emerging technologies like generative AI, you can expand your awareness about what the market needs. Alignment between the brand and customer experience builds long-lasting ROI, more impactful campaigns, and lower churn rates. Identify & remove roadblocks. Take actionable steps to achieve alignment
- 38. The Law of Exposure The law of exposure states that what people think about and expose themselves to, they become. For marketers, the messages and promises you expose your audience to matter; however, if they don’t align with the experience they receive, you’ll erode the experience and lose the customer’s trust. It takes time to build trust and even longer to repair trust, so when your qualitative data analysis sends you down the wrong path, you could lose market share and fast. Emotional Exposure Experience Exploration Evaluation Purchas e Triggers
- 39. Rising Above the Noise with Qualitative Data Analysis Gathering qualitative data is only the first step. Gaining access to your insights quickly isn’t even a silver bullet to growth. Without a proper framework to infuse your findings with every layer of your business, you’ll be challenged to create a loyal base of buyers to build retention and continue moving up the S Curve of Growth. Brand Experience: ● Getting employees and customers to buy into the organization’s “why.” ● Building a business model around the core “why” to support the passion of employees. ● Aligning the people, processes, and platforms to increase team collaboration. ● Offering products and services the customer wants. ● Placing products and services in the channels customers are most likely to access. ● Meeting experience expectations.
- 40. Growth Via an Effective Qualitative Data Practice Learn more at RocketSource.com/Blog/Qualitative-Data