Where once was the costly and time-consuming customer focus group is now social media, as companies like Frito-Lay are learning.
In early October, Lay's wrapped up a summer "Do Us A Flavor" contest in which fans could submit ideas for new potato chip flavors for voting on the brand's Facebook page. Not so long ago, launching a new Lay's flavor would have involved the familiar focus group with sample chip taste testing and professional moderators interviewing clients and prospects, as The New York Times noted in a summer article, "Social Media Are Giving a Voice to Taste Buds."
During the contest, Lay's gathered consumer taste preferences from its Facebook page with simple questions like, "Would you eat this or that?" (Lay's will be announcing the winning chip flavors in February 2013, it said in an official press announcement.)
Frito-Lay, of course, is not alone in using social media for gathering the type of customer feedback traditionally analyzed via focus group. Wal-Mart, Samuel Adams, and MAC Cosmetics are using their social media presence to gather client information about products and services, too, the Times reported. MAC has used social media sites to gather client information on which of its discontinued makeup colors to bring back, for example, while Sam Adams used social media feedback to create the taste profile of a crowdsourced beer, B'austin Ale, which got rave reviews, as the Times said.
Wal-Mart, it noted, found the trend so promising it acquired social media research company Kosmix last year for an estimated $300 million. The social media researchers work as @WalmartLabs, which mines social media for trend information on a wide variety of goods, from games to new food categories. Wal-Mart uses the information to determine its product mix and product penetration in stores nationally and regionally.
In a way, you could say social media has breathed new life into the focus group, whose use has lessened with the tight economy and sparseness of funding for market research. Focus groups can yield great information, after all, but at times reaching $50,000 to $100,000 plus a pop -- what with the travel to multiple locations recruiting, vendor fees, facility rentals, and careful management -- they're simply too costly and limiting in today's business world.
Social media research, which is quick and comparatively inexpensive, has the added benefit of attracting younger users than tradional focus groups have been able to do. Companies benefit from having profile information about the people voting on their product/service questions and performing analysis based on this data. They can identify important regional trends and demographic opportunities. Some companies are even appending the social media profile data to get more comprehensive demographic data and user information to further identify opportunities.
Overall, companies now have access to a far broader base of consumers than available in traditional focus group studies, which typically comprise six to eight individuals per sitting. The cost savings and information depth available via the social media channels are undeniable, and the return on investment for companies is significantly better.
In addition, a company can improve time to market with the immediacy of social media vs. the traditional focus group, which could take several months to plan and execute.
While these variables are powerful, some marketers question the objectivity of social media participants and don't feel social media engagement can substitute for the traditional focus group. What do you think -- are social media focus groups the way of the future or are they too skewed?