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Sep 28, 2005
Case Study

How to Run an Online Focus Group to Discover What Business Prospects Really Want (+ Tips on Launching an Ecommerce Web Site)

SUMMARY: Online focus groups can work even better than traditional offline focus groups. Cost data and a sample transcript are included in this new Case Study. Plus, hear how a big traditional b-to-b firm (read: everything sold by reps in the field) launched a new ecommerce division selling direct to small businesses. Features inspirational tips on creating site content that prospects *adore*, plus a sample Web analytics report:
What do you do when you're the back-end supplier for one of the biggest marketers in the industry... and they tell you one day that they'll be taking their business in-house from now on thank you very much?

MOD-PAC (NASDAQ: MPAC) had a healthy 100-year old business printing packaging for accounts sold by its sales force.

Then the Internet came along. A dotcom, specializing in online direct marketing to a high volume of small business customers, asked MOD-PAC to power its backend. The dotcom would do all the marketing, and MOD-PAC would manufacture and ship the product.

Business boomed. But, in March 2004, the dotcom announced they were replacing MOD-PAC with their own plants to maximize profits.

By this time, a portion of MOD-PAC's infrastructure was devoted to servicing the dotcom. Rather than retool that part of the plant, why not try to market direct online to a similar customer base?

Could sales-rep-driven business targeting very large customers turn into a direct response marketing powerhouse targeting small businesses online?

Former plant manager Joseph Burgio was anointed Director of Business Development and given one year to launch the new division from scratch. There was no Web site, no client list ... not even a brand name or logo for the new division.

Just because MOD-PAC had been a partner to one of the top dotcom players for five years, didn't mean Burgio assumed he knew a darn thing about the marketplace. (He was too smart to make a dumb mistake like that.)

He split his budget and year into careful chunks, each focused on building knowledge and a brand from scratch. Every decision was based on detailed research and analytics.

Step #1. Spec out the competition

"First we did a competitive analysis checking out other sites," explains Burgio. He and his team analyzed competitive sites from five angles:

- target market served - products offered - offers used to compel action (discounts, free shipping, etc.) - style of site design: the visual "feel" of the brand - the 'value' of the site content (information/writing)

Burgio feared falling into either of two traps -- commoditizing printing services to compete on price alone or choosing such a broad target that it would be impossible to get a quick, firm foothold in the market.

To avoid these, the team decided they needed to build a strong brand offering value-beyond-price to a specific underserved universe. These were executives from specific niche industries such as non-profits and event planners who might prefer a more professional-feeling, information-rich site than the 'consumery' sites currently targeting small businesses.

"We wanted to offer a lot of how-to support to businesspeople versus serving people showing up to do quick business card orders."

Step #2. Virtual focus groups

Before inventing a brand name or even one single page of a Web site, Burgio invested about $75,000 in six virtual focus groups to discover precisely what these niche marketplaces really wanted from a printing company online.

"It was a validation of what we'd seen in competitive analysis," he says. "None of us had enough knowledge of what these customers wanted to build a site for them without that baseline."

Virtual focus groups are run online using a modified version of chat software (link to vendor below.) Instead of being run by region, Burgio's team ran them by marketplace niche.

The team pre-defined what types of participants they wanted in each of the 5-10 person panels -- for example, the non-profit group might have included a small non-profit, a consultant to non-profits, a large sophisticated non-profit, etc. Attendees were recruited via emailed invitation to a pre-permissioned pool of executives willing to participate in market research. Just as with offline groups, attendees received $100 for their participation and the group ran for two hours usually immediately after the business day (4-6pm Chicago time).

The moderator based discussion points on a guidebook Burgio's team put together asking every key question they could think of including these general topic areas:

- What would stop you from ordering printing online? - What types of printing do you order regularly? - How educated are you about print buying?

Next the team turned the transcript of all six focus groups into a useful matrix. You could see where answers were the same and different across the niches. You could see how terminology and verbal expressions varied between niches. (That's pure gold for copywriters and search engine marketers alike.)

From start to finish, the virtual focus group project took six weeks.

Step #3. Invent a new brand from scratch

Burgio realized the new marketplace didn't know MOD-PAC. He needed a new brand name for the division. He asked his agency to brainstorm a variety of ideas, each including a name, a graphical logo, and a tagline.

The winner came complete with a cartoon of a green gecko: PrintLizard -- Printing. Evolved.

Why? "We thought we could build on his personality. We started to think of what fun things we could do with him to show the businesses' underlying theme of flexibility."

The creative team developed a personality brief on the lizard. "He's got a bit of Kramer from Seinfeld." They went beyond sticking a logo on pages to "infusing" marketing materials with the lizard's personality. (In fact, if you call the division's main phone line, you can listen to the lizard.) Burgio, who formally added 'Lead Lizard' to his job title, launched an internal marketing campaign around the lizard "to get everyone feeling good about the new business model. Everyone on the production floor was wearing lizard t-shirts. There's a huge mural of lizards on the wall...." Step #4. Build a Web site

Next the team began designing the Web site. (Link to sample pages below.) Copy was in the "voice" of the lizard.

Instead of designing the site's main navigation around PrintLizard's offerings, the team designed around the target niche markets. Each niche had its own tab from the home page. Within that site section (known as an 'ecosystem'), everything possible was customized for that niche, including product offers and language.

The ecosystems were rich enough that they could be used as direct landing pages for campaigns instead of sending all traffic to the home page.

The team *packed* the site with offers explicitly designed for every single stage of the sales cycle, including:

- Glossary for print buying novices - Glossary for advanced print buyers - How-to white papers on aspects of print buying - Specifics on the company ranging from history to photos of the plant floor (We love these and think more site should add them to add a humanity and a "we really exist" credibility to their virtual presence.) - Client case studies, testimonials, & service references - Production capabilities, technical specs - Product offers - Technical support - hotlink to printing 'consultants' - Quote hotline - Feedback link - Email opt-in for alerts about new how-to white papers The back-end system featured an analytics system that was a heavily modified version of WebTrends. (Link to screenshot below.) Traffic was segmented so the team could see where prospects from various offers and niche markets actually surfed.

Every single hotlink on the site was pre-scored by quality, so a surfer's activities would cause the system to rank that surfer by implied value to the company. Were they just surfing for educational offers or did their clicks imply they were further down the sales cycle?

Traffic for traffic's sake alone wasn't worthwhile. The team wanted to know how close these prospects were to closing. The information could be used to evaluate media buys, plus inform sales reps. (The team assumed larger and newer accounts would still require that human touch to close them.)

Step #5. Roll out sales and marketing efforts

The sales department used the focus group matrix to create playbooks for the field sales and inside sales. Reps were trained on what objections each niche market was likely to raise, and how to counter these in language the prospect would relate to.

This also helped with conversation openers. Instead of asking, "have you heard of PrintLizard?" a rep could say, "Do you have a problem with [X]? I've heard [niche] are frustrated by that these days."

In the meantime, the marketing team rolled out a series of launch campaigns including a 10-week iPod giveaway (one iPod per week) both online and offline. (Link to samples below.) These campaigns plus the inherent seo-worthiness of the content-rich site, along with search and email marketing drove site traffic.

Last but not least, the team launched an online satisfaction survey to discover if surfers were really happy with the site.

Currently, just under 1% (.94%) of home page visitors wind up buying during the same session, plus the site's already generated hundreds of quotes for business for the sales team to follow up with directly.

Another result -- turns out virtual focus groups can be *better* than traditional groups because there's much less chance of more forceful participants skewing results.

"It's fantastic," says Burgio. "They tended to build on each other. One person would type in a response and other people would build on it. They were not swayed by others. They had their own independent reactions and thoughts. It's a really excellent way to research."

More lessons:

- Business card offers, which everyone assumed would be the hottest product due to competitive analysis, get less than 10% off the online views of the true most popular offer -- Marcom and event print products. Even greeting cards and invitations whoop business card offers.

- Product naming can make a huge difference. The team had planned to offer "kits" or "packages" bundling several products together. Focus groups hated both terms, but said they'd be likely to purchase a "collection."

- Few prospects leave their chosen 'ecosystem' (area of the site for their niche.) Only 26% of prospects who visit the 'small business' section of the site also check out other niche sections.

- Traffic analysis clearly showed the team they needed to launch another new ecosystem ASAP -- one for real estate agents. They launched it a couple of weeks ago, and it's already successful.

- You must offer multiple channels for prospects to get back to you because everyone has their own preference. 58% of leads generated from the site came in on Web forms. 30.5% came in from direct emails. 11.5% used the phone.

- You must make email opt-in an option on registration forms for white papers and other giveaway offers. You can't assume that because a prospect typed their email into a form, they are expecting (or want) to hear from you via email.

53.2% of all LizardPrint site registrants pro-actively checked the box on forms saying "yes send me email."

Useful links related to this article:

Creative samples related to this campaign, including a focus group partial transcript:

Virtual focus group vendor:

ClearGauge - the agency that MOD-PAC relied on through the entire process, from focus group to site building to marketing campaigns:


See Also:

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