Scenario Analysis – a way out of the COVID-19 crisis?
Uncertainty due to the COVID-19 crisis is having a big impact on consumers’ lives. So how do brands continue to learn and understand consumers, and find a way to identify opportunities for now and the future post-corona world?
Many predict a “back to new normal” situation followed by a recession, so it is highly likely that the impact on consumer sentiment will take anything between six to 18 months to stabilize. Understanding how to bridge this period and come out the other side with stronger brands, more relevant product offers, and more engaging communication is one of the key challenges to address in this time of crisis.
In response, we have been refining one of our key analysis tools. By applying a few guiding principles to help us navigate decision-making processes, we believe that Scenario Analysis can be one of the best ways to provide strong and robust insights to understand the now and prepare for the future.
How does it work?
When we talk to consumers, we first need to ‘label’ or segment them in terms of their sentiments – are they (A) very worried, (B) concerned or (C) little or not worried. The split-scenario approach enables us to analyse each group separately and form conclusions for each group. We do this by adding a sentiment-based split.
Most probably, a part of the population will go back to normal again, and some people will stay anxious for a while – so we will end up with a “new normal” consumer sentiment somewhere between groups B and C in the next 12-18 months.
Nevertheless, group A can provide us with interesting information as well (not necessary for decision-making), as they are representing a special cautious mindset. If findings from all three groups align in the end, then decision making becomes easy.
Here’s an example
The table below shows an example of three new product tests –
In Scenario 1, the winning product in all three targets is Product 1, so whatever happens, Products 1 is a good choice.
In Scenario 2, the winning product is Product 1 for target B and C, but Product 2 for target A. If we presume targets B or C are our future consumers, Product 1 is still a good choice. Here, it might be interesting to check insights from target A and see whether the data sparks some new ideas or space for improvement.
In Scenario 3, the winning product is Product 1 for target A and B, but Product 3 for target C. If we assume targets A and B represent a large part of the population, Product 1 might be a good choice, if it can be offered at a good value in these uncertain times. Here, it might be interesting to check insights from target C and see whether a limited edition Product 3 can be launched for the early buyers of target C.
In Scenario 4, there are three different winners. This suggests you should rethink the product or strategy as neither solution is able to keep up performance in a changing environment – and the only sure thing about the future is a lot of change. Our solutions need to be robust enough to survive in such circumstances.
Collecting reliable and trustworthy insights
The good news during the current climate is that recruiting high quality respondents has never been easier and respondents are willing to take the time to talk to brands, in fact many even enjoying the opportunity to have a conversation and share their opinions.
Over recent weeks, we have found many research discussions to be more focused, informative and relaxed (particularly among professional targets in managerial positions) compared to other in-depth interviews and focus groups conducted before corona.
We are definitely aware that consumer sentiment can influence decisions and options, and different people are bound to react differently in the crisis. A daily study into consumer sentiment about the impact of COVID-19 on the economy and their personal financial outlook would get different numbers every single day. These numbers undoubtedly change over time as the situation develops.
The big question is what sentiment will be in six, nine, or twelve months when the crisis wears off. For that – we can distinguish a different sentiment in three points in time: now, before and after the crisis.
How can we help?
ADK Insights combines both qualitative exploration of the rational and emotional factors that better identifies the needs of consumers during the COVID-19 period, along with the quantitative scale and full global SNS coverage to validate their ideas, habits and wishes.
To find out more about our dialogue with consumers worldwide, please contact Rob, Dam or Nimrod.