4 Ways to do Cost of Living Research
The word ‘unprecedented’ is probably one we’ve all grown sick of hearing. However, it’s a word that sums up the last few years fairly succinctly. Brexit, the pandemic, rampant inflation and a looming recession – no one in the history of the world has experienced these things in combination before.
This means that when we ask consumers about their future plans or choices, they can’t base their predictions on previous experiences, we are all navigating brand-new landscapes, and consumers have to guess. The fact traditional research often asks questions based on previous choices rather than predicting future behavior is a consistent issue for research methods, but this becomes an overwhelming problem when participants face future challenges they can only imagine.
So, how can you conduct research that will get you a deeper understanding of what your customers value and predict future consumer behavior in unprecedented times? The answer can be found in behavioral science, System 3 and narrative research. Only behavioral science can accurately predict future consumer behavior, and these are the methods you can use to ensure you are collecting the key insights to help your brand thrive over the next 12 months.
As opposed to traditional conjoint, behavioral conjoint replicates real purchase environments so you can take into account context and unconscious decision-making. It can give you a much more accurate understanding of the influence of elements like packaging design, design, and price in future decision-making. If you need to increase your prices, it can be an invaluable tool in testing just how price sensitive your customers are and finding out which pricing tactics and psychological heuristics will help shoppers accept an increase.
Narrative qual provides a different structure of questioning and prompts than traditional qualitative interviews. We are not distant interviewers with a prescribed set of questions that often feel more like an in-person quant survey. We listen to consumer stories face-to-face and empathize with them by sharing our own experiences. With specially scripted prompts and experienced interviewers, we can help people realize the inconsistencies in their own story and recall aspects of their thought processes they are unaware of. This method brings out the true emotional factors that drive consumer choice. It reveals a lot about the trade-offs that are willing to make and where they are still willing to spend money.
System 3 is about harnessing the imagination of consumers and finding your place in it. Through an open-ended quantitative survey, we collect the relevant stories consumers tell themselves about your brand or product. These stories are then analyzed and we can uncover the narratives that explain how your customers navigate your category. This will tell you their perceptions about premium products, what they think is expensive, and what is not. High prices are a function of perception as much as reality. Be perceived as good value, and you’ll keep selling.
Following your customers for a week and recording how they spend money and make tradeoffs in real-time will give you an idea of how they spend in your category. What’s important is to understand their emotional reaction to these tradeoffs. Get them to rate their emotional reaction to each purchase they make. You’ll find a mine of insight into what triggers a negative reaction and what doesn’t.
…and 1 thing not to do
A deeper understanding of emotion and imagination when it comes to product and purchasing will give you a deeper understanding of perceptions of value at the heart of consumer choice. What you should avoid is prompts and participants relying on recollecting what they did the last time they might have been “less well off”, and trying to ladder up to an equivalency that just doesn’t exist. And what you certainly shouldn’t be using is the van Westendorp price sensitivity meter. Westendorp is based on two key premises, firstly that people make rational economic choices, and secondly, that everyone has a clear perception of value. Neither of these is true during a normal state of affairs, but right now, everybody’s internal “price perception” compass is completely askew.
Ready to talk about strategizing your next research project?