Using Consumer Data for Marketing Decisions; “Yeah, We Ought to do More of That.”

It’s a bad idea to write something requiring you to talk to the marketing people at snowboard companies during the selling/tradeshow season. But the topic is a critical one. Most companies in this industry don’t do a good a job collecting and utilizing consumer information as they should. They understand that success in a tough market requires it, but don’t do it in a systematic way.   Why?

What are the barriers to doing it? Why is it important? What are some of the possible benefits in the snowboard industry? Let’s find out.

Why Do It?

Slower growth, margin pressures, a difficulty differentiating between product lines, and the resulting need for higher advertising and promotion budgets means it’s harder to make money in the snowboard b. Knowing your consumer keeps you focused and helps you run your business efficiently.
Think about the demographics. The average snowboarder is getting older. The female market, at least in soft goods, is taking off. Your distribution has changed and expanded. A growing percentage of young people are non-white. The SIA Customer Retention Survey shows that only ten percent of people who try snowboarding go back for a second shot- just like in the ski industry. 
 Are your customers the same they were three years ago? How do you know?    Has their motivation for buying and participating changed? How?
“Danger Will Robinson!” These are fundamental strategic issues that will affect everything about how you run your business. How can you even begin to make good tactical decisions unless you know your customer? What decisions might you make differently, and what would the benefit be?
 Dennis Jenson at Burton discovered through the brand’s consumer demographic data that more snowboarders were mountain biking. That research made him look at Burton’s advertising mix and think about what part mountain biking magazines should play. If a company stops advertising where it isn’t reaching its target customers and started advertising where it does, it saves money and reaches more buyers. That kind of focus is critical in this competitive environment.
  When you internalize the knowledge of who your customer is in your organization, you create a focus and a decision-making filter that
improves and simplifies much of your decision-making. For example, it should be easier to form a consensus on which retailers you should be in or not be in Around the turn of the twentieth century some mogul said, "I know half my advertising budget is wasted-I just don’t know which half." Knowing whom your customer is not only positions you to sell better-it saves you money.
But this isn’t just about your advertising and promotion budget. It’s about how you make decisions on product line breadth, pricing, staffing. To use an obvious example, how many race boards do you need in your product line when you sell very few? Are the people designing your graphics representative of your customer?    
Arbor Snowboards knows who their consumer is. It’s the older snowboarder. They figured that out before they started the company. They have never wavered from it. It’s the focus of the decisions they make every day.
That focus probably helps to explain why Arbor could start a new snowboard brand at the height of the consolidation and still survive. In
fact, while it’s a smaller brand, Arbor has continued to grow. "We’re focusing on who our customers are-not what our competitors are doing," says Carlson. "We’ve done that since the day we started the company."  Focus on the customer seems to be something of a mantra at Arbor. As they found out, the need for survival is a good reason to make sure you know who your customer is and what they want.
Standard Industry Practices
The marketing people I reached were generally consistent in their descriptions of how they collected consumer information and what they did-or didn’t do-with it. Here’s what I heard. Bare in mind that this is an amalgamation of what a "typical" company does. Some do it better, and some do it worse.
Companies check out some of the industry studies available (for example from SIA or BoardTrac). The information isn’t always brand specific. They tend to have looked at, or are at least aware of, general demographic data and trends.
They collect information from consumers who are interested in their products from warranty return cards, and from internet and telephone catalog requests. Consumer or retailer focus groups are pretty common and they seek out the opinions of their team riders-especially in product development. They further rely on the usual anecdotal evidence and their own experience as snowboarders.
In most cases, the information collected from consumers is limited to name, address, phone number, and age. In other instances, such as on warranty cards or on some internet surveys, different questions are asked.
The process of deciding what information to gather seems to be a little informal. That is, there isn’t typically a process by which questions relevant to the company’s strategy are discussed and selected. It’s more like the guy designing the warranty card has room for another question and asks the sales manager what they should ask.
Once the data is collected, most companies don’t think they make the effort they should to systematize and utilize it. It’s a lot of work to
create and maintain a database. So, the typical company collects some data, but doesn’t put all that much thought into what data they should collect, or what the goal is in collecting it. It isn’t collected consistently. Once collected, it’s often not analyzed or even systemized. Completed warranty cards can gather dust in a desk drawer.
I don’t think that snowboard companies are worse than companies in other industries of similar size in collecting and utilizing consumer information. But we could sure be better.

Why is This So Hard?

Given the almost universal consensus that market research is a good idea, why hasn’t it happened more? I can think of five reasons in
First, in spite of the consolidation, snowboarding is still an industry with a lot of snowboarders in management positions. We believe-and correctly I think-that we’re pretty close to our customers and see that as a substitute for market data. But we’re all getting older. Our continued ability to be close to the market has to become more of a concern.
Second, collecting and utilizing consumer data is a pain in the ass. It takes a lot of time and costs money. When you’re done, you may have more questions than you started with. The costs are always hard costs that you see on the expense side of the income statement. The benefits are more touchy feely, and don’t show up immediately unlike the invoice for the data collection and computers to analyze it in.
Third, we’re a small industry, and, until recently, the costs may not have been seen as justifiable given the potential financial benefit.
Fourth, somebody has to have the responsibility and the authority to make it happen. It’s a full-time job. Getting the data from the catalog requests into the database can’t be seventh priority on the list of things the receptionist has to do. Burton’s Dennis Jenson put it this way, "Data is like produce-it tends to rot." So if you don’t use it in a reasonable amount of time, the cost and effort of collecting it is
Fifth, the technology to make it easy and cost affective wasn’t around until pretty recently. That’s changing, but it’s usually a while after
the technology works that the benefit is realized. It was about 1982, for example, that the "experts" started prognosticating on the
improvement in productivity that would result from computers. It seems to have started to happen within the last couple of years, and only recently is it being generally recognized.

The Times, They Are A Changing

The computer, scanning, and database technology needed to actually make sense of consumer information is readily available and getting cheaper all the time. The process of consolidation also means that most of the surviving companies are larger and more sophisticated. They are more likely to have the resources and the awareness to collect and utilize the data. Finally, the new financial model I outlined above almost requires better consumer knowledge.
Mark Bujold at Rossignol sees consumer research as an important issue. He acknowledges that with budgets tighter across the industry, it could be hard to justify the hard costs by the longer-term soft benefit. However, "Rossignol is stepping up the effort [to collect and utilize consumer data] company wide," he says.
Hayley Martin at K2 Snowboards described her company’s efforts at consumer market research as progressing. This is the second year for the brand’s revamped consumer data collection program, which includes a survey attached to every product they ship, offering the consumer the opportunity to receive regular product information from K2 in return for completing the form. K2 has contracted with an outside agency to maintain and build the database, and expects to start making more regular use of it to reach consumers. "The dealers can utilize the same database," she says. "They can call us and get mailing labels for people in their area who are interested in K2 Snowboard product."
Recently, I heard about a conversation somebody who has been in snowboarding a long time had with a friend about his kids. “Are your kids snowboarding yet?” the friend asked. “Are you kidding?” he answered. “They’re skiing. Snowboarding’s what dad does.”
It would be dangerous to draw any conclusions from a single anecdote. But we all have some tendency to internalize as “the truth” things we hear often enough if they fit our mindset. Lacking good information, what else are we going to do?
Our winter sports cousin, the ski industry is a case in point. We’re damn close to being married to our cousin, and incest can produce some dangerous genetic conditions. Skiing has been in decline for many years. Aside from jumping on the snowboarding bandwagon, the ski brands have been slow to change their market positioning. I don’t know if the information wasn’t there, or they just didn’t want to look at it because of the inevitably unpleasant reality it represented.
Snowboarding has the chance to make the same mistake. Or not. Work hard to figure out who your customer is and how that is changing. Save money. Sell more. Have fun.