Marketing Fundamentals and Cutting-Edge Research (Hold the Fads)
Wharton@Work spoke with Wes Hutchinson, Wharton marketing professor and director of the Wharton Behavioral Lab, about cutting-edge research that offers deep insights into customer behavior. But in the increasingly complex world of marketing, not all that’s new is worth paying attention to. Hutchinson offers advice on where to focus.
W@W: There seems to be a lot that’s new in marketing right now. We hear about content marketing, mobile marketing, and newer channels like Groupon and Instagram. How can you tell what’s important and what to ignore?
WH: Don’t put the emphasis on what’s new, per se. There are eternal truths in marketing that still hold and haven’t changed for decades. In our MBA program and in Executive Education’s Strategic Marketing Essentials, we bring together the fundamentals and cutting-edge strategies and research methods, and weed out the fads. It is our job as faculty to understand the landscape, make those judgment calls, and determine what is essential. By leaving out what’s irrelevant, we can focus more closely on what you need to know.
W@W: So new isn’t necessarily better?
WH: Right. If you need to understand how marketing affects your organization, and how it works in terms of your strategy, current trends aren’t where to spend your time. No matter how you reach your customer, for example, you need to know about segmenting and calculating customer lifetime value.
W@W: What cutting-edge technology and trends are important enough to be deemed “essential?”
WH: There’s a central idea that applies whether you’re in consumer package goods or B to B: “unseen is unsold.” If your potential customer doesn’t notice or consider you, you can’t make the sale. Research on consumer decision making is helping us to understand how to get noticed, and how to value your efforts to get attention for your product or service.
The fundamental problem with this research has been differentiating between two possibilities: is the customer looking at your product because your efforts to get their attention paid off, or was that customer already planning to make the purchase? There was no way to accurately tell the difference. We knew they were looking, but why? If you’re allocating marketing dollars on attention-grabbing efforts, you want to be able to measure their effectiveness.
W@W: Where does technology fit into the research?
WH: At the Wharton Behavioral Lab, we just did a study with Perception Research Services, a leading consumer research firm, that’s helping us understand consumers in a much more robust way. We used eye-tracking technology to get inside the head of the consumer and measure their behaviors more accurately than ever before. This technology has become so good that it allows you to see through the consumer’s eyes in real time, in a real-world environment.
W@W: What are you learning?
WH: We know exactly what they’re looking at. It’s much more accurate than just a certain product: we know if they’re checking nutritional information, price, or packaging. The technology allows us to better analyze the decision-making process, and it has implications for understanding and shaping web behavior, packaging, product layouts, video games, usability studies, and more.
Our study concluded that there is a real, measurable sales boost from attention. It creates a crossover to increased consideration of the product. You can convert lookers into buyers by grabbing their attention. In other words, if you’re spending money to get your product or service noticed, can that have an effect on sales? Is it money well spent, or could your marketing dollars be better allocated? We found that there is definitely a real lift in sales from the attention.
W@W: How can executives use this information?
WH: You first want to understand the fundamentals of marketing and how they play out throughout the organization. What’s new is how granular the information you can gather is. Whether you want to understand your customer or measure how effective your marketing efforts are, there are better ways of doing that. It’s what we teach in our core MBA course and in Strategic Marketing Essentials, a mix of the basics, which haven’t really changed, and the cutting edge. Marketing today involves some of both. But don’t worry about the fads. They might be getting attention, but they’re typically not worth your time.