Doing Market Research Right

Doing Market Research Right

The annual expenditure for market research is $11 billion or more in the U.S. alone and upwards of 85% of newly introduced products fail or dramatically under-perform expectations.

 

Consequently, one could understand why just 31% of market research companies feel market research is reliable. And it’s fair to assume that just about every new product has gone through some form of vetting prior to release.

 

“You’d think it is better to have tried and failed than to have failed to try. But what is the difference if you end up in the same place?”

 

How about $60 billion (or more) – the amount Fortune 1000 companies spend each year on failed products?

 

Scrapping market research is certainly not the solution. Rather, here are three ideas to help you fail fast…and maybe even succeed.

 

It’s Just An Idea

 

Have you considered the emotional difference between an idea and a good idea… specifically the process of proving a good idea versus proving an idea good?

 

When you start with a good idea, your research — consciously or sub-consciously — is likely structured to support or validate the claim of good. This is fundamentally different than starting with an idea and attempting to determine the viability (good) of the idea itself.

 

Take, for example, a spirits company planning to launch its next good idea — a new premium mixer. The company believes it has a winner and therefore conducts its initial research to understand consumers’ preferred packaging. And, more specifically, which packaging this consumer sample deems the most premium.

 

What if the company instead queries these consumers to gauge their overall interest in a new premium mixer?

 

Answer The Right Question

 

Just because I like it doesn’t mean I’ll buy it. How often have you heard of a failed product that received overwhelming positive reception during the research and development process?

 

Is it possible that we’re asking the wrong questions from the onset?

 

Using the above example – a new premium mixer from an established spirits company – let’s assume the initial research was actually intended to gauge consumers’ interest in a new premium mixer. The company conducted a focus group, providing these consumers the opportunity to taste the mixer and share their genuine thoughts and feedback.

 

Ninety percent of participants said they love the premium mixer and would absolutely purchase it. Success is ensured, right?

 

Likely not. The key is not what consumers tell you they would do, rather to understand their willingness to part with hard-earned money.

 

Here’s another example. Imagine you were handed a pen and told to write your name, then asked for your thoughts about the pen. Assuming you were able to write your name, you are likely to respond favorably.

 

What if you were first asked to pay $5 for the pen, might you respond differently? Would you even be willing to pay for the pen?

 

Consistently Relative

 

Consider again the spirits company research. On a scale of 1-5, how interested are you in a new premium mixer from an established spirits company? Okay, maybe it’s clear that ‘1’ correlates to “I have absolutely no interest.” But aren’t the four remaining choices relative?

 

Too often, research questions provide relative answer choices. That could lead to potentially misleading results. If the stated description of ‘5’ is “I am extremely interested,” how does the meaning of ‘extremely” differ between an individual that regularly hosts parties and small gatherings and another who infrequently mixes a cocktail at home?

 

Contrary to popular belief, 4.5 out of 5 is best left for teachers grading assignments. And maybe movie reviews. To better understand your customers’ needs, wants and desires… just ask.

 

Easier said than done, as eighty-two percent of companies say they neither can identify their customers’ most important value drivers nor have access to in-depth and accurate consumer intelligence.

 

Conventional wisdom, intuition or a boss might lead you to believe in a good idea. Next time, though, consider starting with just an idea. Then let your research and your customers, without room for interpretation, determine whether it is a good one based on willingness to part with their hard-earned money.

 

Quite possibly, the end result will be the same, but wouldn’t it be best (and less costly) to fail fast, or base moving forward on a well-informed decision? After all, customers are more likely to make a purchase if first asked of their opinion.

Zachary Schwitzky

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