Listening to Your Customers In the Digital Age

“You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new” – Steve Jobs

What do customers want?

Let’s do a focus group and find out. This tried-and-true approach to innovation leading to brand extensions, new product categories, and new marketing approaches has and continues to be used as a cornerstone of market research efforts.

In an interesting BusinessWeek article dating back to 2005, titled “Shoot the Focus Group”, the author states that although there are plenty of examples and ample evidence that Focus Groups fail time and again, companies keep using them.

“The old-fashioned focus group still has its believers even with fiascoes like Pepsi Edge and a decades-long new-product failure rate of about 90%.” – BusinessWeek

You probably know the famous examples of the failure of Chrysler’s Aztek car and the surprising success of PT Cruiser, Coca Cola’s “New Coke”, Ford Edsel, and plenty of others horror stories of focus groups gone wrong.

And why is that? I like Gerald Zaltman’s explanation that “The correlation between stated intent and actual behavior is usually low and negative” which also reminds me of an episode of Mad Men where Don Draper chastises a hired researcher to do a focus group for one of their clients, see below.

Excerpt from Mad Men, Season 4. “The Rejected”.

Faye: Well, I’ve done everything but finish the report.

Don: How’d we do?

Faye: Well, it turns out the hypothesis was rejected. I’d recommend a strategy that links pond’s cold cream to matrimony– a veiled promise.

Don: Hello, 1925. I’m not gonna do that, so what are we gonna tell the client?

Faye: I can’t change the truth.

Don: How do you know that’s the truth? A new idea is something they don’t know yet, so of course it’s not gonna come up as an option. Put my campaign on tv for a year, then hold your group again, maybe it’ll show up.

Faye: Well, I tried everything. I said “routine”, I tried “ritual”… all they care about is a husband. You were there. I’ll show you the transcripts.

Don: You can’t tell how people are going to behave based on how they have behaved.

So, what’s the problem with focus groups?

In a Harvard Business Review article, Turn Customer Input into Innovation, Anthony Ulwick says “companies go about listening to customers all wrong”. Customers are asked to offer a solution to a problem but they aren’t informed enough, aren’t experts in the field and have a limited frame of reference.

“The problem, when there is one, is simple: Companies ask their customers what they want.” – Anthony Ulwick

The solution, according to Ulwick, is to focus on outcomes. This means that instead of asking for customers to submit solutions to a particular problem, they should focus on understanding what customers value most.

Leveraging Social Media for Market Research

But how about using social media? I strongly believe that traditional marketing tactics can be greatly enhanced by using digital tools and when it comes to market research, social media channels should be top of mind. That includes paying attention to comments on your blog, using your Facebook Fan Base to test new ideas, monitoring Twitter feeds, and more.

“I’ll take the status update that someone wrote from the couch in the comfort of their own home as more accurate than the comment they made in a focus group room when they are given a $100 gift card to show up.” – Mike Volpe, CMO at HubSpot

Whether social media will replace traditional market research is up to debate, the active use of social media to complement market research can dramatically improve a company’s success ratio for new product launches and maybe take away some of that bad rap focus groups have.

Additional Reading

Here are some interesting articles if you’d like to dig deeper into this topic:

Note: Mad Men is Copyright of American Movie Classics Company LLC.

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One Response to Listening to Your Customers In the Digital Age

  1. […] Listening to Your Customers In the Digital Age THE EFFECTIVE MARKETER | THURSDAY, JANUARY 19, 2012 […]

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