Gift of Spiegel Research Center celebrated

1/30/2014

Students, faculty, staff, donors and university leaders were on hand Wednesday afternoon to celebrate the launch of Medill’s first research center: the Medill IMC Spiegel Digital & Database Research Center.

The event was a chance to thank the center’s namesakes and donors, Audrey Spiegel and her husband, the late Professor Emeritus Ted Spiegel. It was also an opportunity for the center’s researchers to share research findings on how mobile and social media engagement affect purchase behavior.

Northwestern University President Morton Schapiro spoke at the event, noting that the Spiegels were some of the first friends he made upon arriving at Northwestern.

“I came here not just as president of Northwestern and proud of IMC and proud of the Spiegel Research Center, but because I really admire and love you guys,” Schapiro said. “You are very, very special people. Having your name on something so important is going to bring credit to your great legacy as well as to the school that you guys love so much. Not just Northwestern, but specifically Medill.”

Medill Dean Brad Hamm thanked Audrey and commended her and Ted’s vision for the center.

“It is an important day for Medill,” Hamm said. “We can't thank you enough.”

Center Executive Director Tom Collinger traced the Spiegel family legacy of marketing innovation to Ted’s grandfather, Joseph Spiegel, who started the Spiegel company in 1865. The company pioneered the mail order business, created the famous Spiegel Catalog and offered credit plans before the advent of credit cards. Spiegel tied together their records of product purchase and payment history, which allowed the Spiegel company to provide more relevant offers to consumers.

With the advent of the internet and “big data,” Ted was eager to use Medill’s research talents to understand how various types of brand engagement affect subsequent purchase behaviors, Collinger said.

Center researchers have completed four studies – two of them link customer behavior in social media to purchase behavior and two examine links between mobile engagement to purchase behavior. The findings are unique because the data sets provided by the center’s sponsor companies show direct correlation between engagement with a brand and actual purchase behavior, something that is notoriously difficult to do.

Collinger explained that a key Spiegel sponsor has been Air Miles, a Canadian loyalty program that allows members to earn points at various retailers. About 67 percent of households in Canada participate, Collinger said. The Air Miles points can be redeemed for various rewards including travel, gifts cards, merchandise and other items.

The first data set included point accumulation and point redemption behaviors by Air Miles customers who participated in contests on the company’s social media site.

The Spiegel research team found that those who posted online increased their spending immediately and over time. They also found that the contests could stimulate the interest, engagement and spending of disengaged consumers. In analyzing the posts of one contest, the researchers found that the more a poster wrote, the more they increased their spending. Among low-spending customers, some increased their purchase behavior by 80 percent if they wrote a lengthy post describing how they wanted to use their Air Miles.

The second Spiegel study involved looking at online word-of-mouth about Air Miles on its social media site following a policy change that negatively affected its members. Unsurprisingly, viewing negative word-of-mouth decreased purchase behavior, but purchase behavior increased for those who posted negative word-of-mouth and then experienced the value of the brand through redeeming points.

Spiegel researchers analyzed the posts and discovered customers who posted angry emotions decreased spending and those who posted less intense expressions of concern increased spending and point redemption behavior.

Center Research Director and IMC Professor Ed Malthouse explained the third and fourth studies, which looked at the impact of mobile technologies. Spiegel researchers analyzed a data set from Peapod online grocer and found that its app boosted sales by increasing the number of orders per month and increasing order sizes. It also lifted sales among the best customers (13 percent) and among the lower spenders (81 percent).

Researchers also found that the more devices a customer used to interact with the brand, the better the customer. They also found that customers buy different items on mobile devices than they buy on a computer. “Habitual” purchases, such as toilet paper and coffee creamer, are easy to buy on mobile devices, but if you want to differentiate between several options or review detailed product descriptions, consumers tend to use computers for these “considered” purchases, Malthouse said.

The Spiegel team also researched the effectiveness of the Air Miles app, which corroborated many of the Peapod findings. For Air Miles they found that those who adopt the app increase purchases 15 percent in the next moth. They also found that

a customer who stops using a mobile app decreases their future purchases with the brand by a small but significant margin. This finding could affect how brands think about investing in new technologies, Malthouse said.

The conventional wisdom is getting a new technology out in front of the consumer as soon as possible and fix it later, Malthouse said.

“Is that the right strategy if you are disengaging certain customers?” Malthouse said.

Watch video from the Spiegel Research Center celebration