The business environment calls for financial advisers to be more creative and proactive in reaching clients.
Focus groups are an increasingly popular tool that, if conducted right, can help advisers ramp up their marketing efforts and gain deeper insights into precisely what their target clients are seeking.
Many financial executives consider focus groups to be the best way to test services or concepts ahead of an official launch.
Focus groups are particularly successful because the interaction between participants creates a free flow of information and feedback.
Finding participants: Adequate preparation and forethought are crucial to executing a focus group that provides useful information. First, advisers need to identify their desired participants. To get meaningful feedback about a specific product or service, it is imperative that advisers seek out participants who fit the profile of their target market — existing or potential consumers of said product or service.
Although focus groups can be costly, it is possible to glean very solid, effective results at lower prices.
Extremely targeted and large-scale focus groups typically are reserved for companies with a product or service designed for mass audiences. Conversely, most advisers don't have or desire that kind of reach and are instead looking to grow on a smaller, more local scale.
Focus group facilitators find participants in various ways.
You can visit a public place and ask people who seem to fit the target profile to learn more about participating. You can post an advertisement on a local online community or ask friends, family members and business colleagues for recommendations.
Another tactic is to contact people from lists purchased from market research firms. Each of these options will work, depending on how much time and how many resources you want to deploy.
A focus group should be no fewer than five people and, generally, no larger than 15, since large groups can inhibit discussion. Typically, participants expect to be compensated anywhere from $20 to $100 for each session, in addition to lunch or snacks.
Some organizations offer free services or products in exchange for participants' time.
Successful execution: The session will be a waste if the moderator hasn't specifically homed in on the objectives of the exercise and the questions that he or she will pose. Researchers should create a script that will encourage discussion, keep the conversation focused and present questions in a very clear manner.
The moderator is also critically important. Typically, it isn't the business owner. In general, the moderator's standpoint will be one of a researcher, not an industry expert; the detachment of the moderator from the topic area usually is an advantage.
Your moderator should demonstrate comfort with public speaking, the capacity to gain rapport with a group of people and put them at ease, and the ability to follow a script.
Again, the crux of a focus group's success is interaction. The moderator should encourage constructive tangents but tactfully steer unproductive discussions back to the key questions.
Evaluation: After the gathering, researchers immediately should evaluate the results while the information is fresh but should be careful to remain objective, and not just find answers for which they are looking.
It is important to note that information gleaned from focus groups does have limitations. For instance, this type of qualitative research can't accurately measure the frequency with which the responses occur in a given population.
In quantitative research, the emphasis is on the common perspective; in focus group research, it is just as important to highlight and understand the unique and atypical. Although some sense of frequency can be extrapolated from focus groups, they generally don't seek to measure; they uncover issues, scrutinize processes and gauge reactions and perceptions.
Generally, there is a considerable output from focus group research, and it is the job of the researchers to bring meaning to the data. Advisers should then develop a strategy for incorporating the findings into their organization's marketing plan.
A focus group is a lost opportunity if researchers and advisers don't take what they have learned and put it to constructive use. However, for the willing and able, a smartly conducted focus group can provide that critical edge in the increasingly competitive landscape.
Todd Clarke (a href="mailto:toddc@clsinvest .com">toddc@clsinvest .com) is president of CLS Investments LLC, an independent third-party money manager.
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