How effective are focus groups when making changes like developing a new website or optimizing our digital products and product positioning?
Historically speaking, focus groups have guided the thinking of marketing teams in their decision-making processes. However, this comes from an older, more traditional way of thinking. Now, focus groups might not be the best path forward in today's digital-first shopping world.
Especially in a post-COVID world where we will likely see a lot more work done online than ever before, I’m taking a look at how effective marketing groups are, and how they need to adapt to our primarily digital environment to be useful.
The goal of any focus group is to create the most value, not just for your financial brand, but also for the people that your financial brand serves in a digital world.
But not all focus groups are entirely effective.
There are a few pitfalls that accompany these focus groups that can leave you feeling trapped when looking to gain insights into the hearts and minds of digital consumers.
At this stage, we’re concerned with a few things:
For years, I conducted dozens of digital focus groups for financial brands. In reflection on those studies now, I’ve pinpointed three problems that would always arise around gaining new insights into digital consumers' thinking:
In the real world, these people's actions don't connect with the desired future state that they're looking to achieve. It's easy for people to share what they hope to achieve. What's much harder to share in a focus group setting, are the roadblocks that stand in their way of reaching that desired future state.
Focus groups can be tricky in any industry. This is even more true in financial services because there is a tremendous amount of shame wrapped up in a person's financial roadblocks. For example, stash.com did a study and discovered that one out of three US consumers feels constant stress because of financial problems.
Put plainly? Thirty-four percent of us feel too embarrassed to discuss financial matters because we think that they're worse off than our friends. Additionally, one out of five Americans doesn't talk about money because they're ashamed of their personal financial habits—and this figure is only getting worse.
What we need to do is get people to openly and honestly discuss their financial situation, both the good and the bad: The goals of where they're looking to go, as well as, more importantly, the roadblocks of what's holding them back. This is hard to do in front of a group of strangers in a focus group setting but in reality, it's identifying and uncovering the roadblocks that provide a financial brand with the greatest opportunity for them to maximize digital products and digital product positioning.
Let’s take a look at a hypothetical example:
A focus reaches a general consensus that everyone wants to save money; their desired future state. Everyone in the group jumps on the groupthink train and enthusiastically agrees that "Yes, that's what we want."
What we don't learn in this case is why these people have a savings problem in the first place, because maybe they don't have a savings problem. In all likelihood, some of these people have a spending problem. Optimizing a savings account in this case is the incorrect solution. The missed opportunity here to optimize a spending account that includes some type of financial coaching accountability to help these consumers transform their relationship and thinking patterns surrounding money; to transform their spending behaviors. Only then will they transform their spending behaviors and work towards achieving that desired future state of saving more money.
If we're not careful, digital focus groups quickly become a fruitless exercise in wishful thinking, because focus groups require some reference points to be effective.
"It's really hard to design products by focus groups. A lot of times, people don't know what they want until you show it to them." -Steve Jobs
Think back to when the iPhone was first launched in 2007. What if Apple had focus-grouped the phone before going to market? I think at the time, people might've complained, "Well, can't you just have a physical keyboard like all the other phones?" People make decisions based upon the context of what they know today. There’s no reference point in their mind to anchor against another, better solution.
Let’s apply this thinking to banking. People don't need another checking account. So, what do people need? That's the big question. We must dive deeper.
The answers might not have anything to do directly with a product like a new checking account or debit card; this is the transaction of just dollars and cents.
Banking must become so much more than a transaction.
Financial brands need to transform their thinking, to put the transformation of people over the commoditized transaction of dollars and cents, which requires a great deal of courage.
How do we get there? How do we go deeper into the hearts and minds of digital consumers?
A great opportunity for your financial brand is to gain insights through quantitative and qualitative digital secret shopping studies.
This is how you can discover what’s truly in the minds of your consumers.
These insights can then be further amplified when compared to competitive benchmarking of other financial institutions, neo-banks, and neo-lenders.
This strategy provides a foundational relation and relativism into a consumer's mind about what's being presented in comparison to the alternative choices available to them.
Digital secret shopping studies offer tremendous competitive advantage for you.
Recently, we surveyed more than 300 financial brands and discovered that among them, 94% of bank and credit union websites have never undergone any type of digital secret shopping study.
Could you imagine if Amazon or Zappos or any major digital retailer never secret shopped their digital experiences? What would those experiences look like today?
Conversely, seventy-two percent of financial brands have been performing ongoing secret shopping studies for their physical branches. Since we also discovered that 87 percent of consumer journeys begin online, this lack of focus on digital experience is troubling.
We can think about digital secret shopping studies through two different lenses:
The most important element of these qualitative studies comes from asking the right questions and then responding to a person's unique answer with empathy.
This is why the first two questions that we ask here at the Digital Growth Institute when conducting digital secret shopping studies for financial brands are contextual and framed around a specific product. These questions are:
From these questions about trust and emotions we can dive into other questions that provide additional perspective into why a consumer thinks the way they do, why they behave the way they do, and why do they make decisions the way that they're making them when shopping for a financial product on your website.
Digital consumer research is hard, but not because it’s hard to find participants and conduct interviews. Truthfully, it's never been easier to conduct digital secret shopping studies.
Digital consumer research is hard because it forces you to consider people's true behaviors and their true motivations. These insights can challenge your own perceived bias and perspective of the world. That's sometimes very hard to intake, process, and then take action on.
Innovation and digital product optimization come from recognizing unmet needs and emotional pain points.
When we know these, we can figure out how to alleviate that pain, develop the cure or find the prescription. It's hard for focus groups to identify a person's greatest pain because:
The path forward to gaining clarity in the hearts and minds of digital consumers is through digital secret shopping studies. This is where you can yield the greatest insights for your financial brand, simply by asking good questions.
Digital growth is a journey of transformation, of guiding people in the communities that you serve beyond their financial stress, towards a bigger, better, brighter future.