Summing Up
Customer inputs to the product development process count, but in different ways and at different times, according to many responding to this month's column.
As Alexander Gat put it, competing and pioneering products "should take significantly different PD (product development) paths." Jacoline Loewen pointed out that "Asking the customer's opinion is great for quality control check(s), but for creative strategy get beyond the client." Gerald Nanninga commented that "consumers are very good at explaining frustrations and problems, … (but their) opinions about hypotheticals (and) … something new and different is worthless." Ron Kurtz noted that (customers) "are better at reacting to things and defining their 'problems' that they would like to see resolved or alleviated."
Some commented on the limits of formalized marketing research. As Robert Vitkine said, "Good ideas and great products arise from strong insight, gut feel and imagination. Bad ideas, lousy products or services can be avoided by serious market research." Andy Robin pointed out that in the semiconductor business "one still had to spend a lot of time with customers to get a good feel for what things seemed more or less important … (because) customers … had no sense when it came to entertaining tradeoffs (between features and cost)." Phil Clark commented that, regardless of method or purpose, "It is important to know your customers … better than they know themselves… They will tell you through behavior what they really want … not necessarily by answering marketing questions." Maree Conway said, "Ask customers what they think about the future rather than the present, and we might get some very useful ideas." Chintamani Rao said, "That does not mean you should not ask consumers: the question is what to ask them and how. It's about understanding consumer needs, not asking them what they want."
Several questioned the way some think about the development of products of any type in a rapidly changing business environment. As V. P. Kochikar put it, "Rather than saying, 'You throw me your need over the wall, and I'll throw the finished product back over the wall,' dissolving the wall and finding the best product collaboratively is the way to innovation." Naveen Kashyap commented, "In a business world where the paradigm is collaborative innovation with customers, with the amount of personalization expected in every offering, the customer's opinion is in fact more important than ever." Gaurav Bhalla said "Creating the future … is about understanding customers' value trajectories and determining what innovations will better fit these yet-to-occur realities."
Does this provide us with a set of criteria for determining how and when to weight the importance of customer inputs? Jonathan Hinkle believes it does. As he put it, "… the question may really be, 'Will this product be marketed as a disruptive product or fit with customers' paradigms?' Customer feedback is always important, but the weighting of that voice should vary greatly." How can we know when customer inputs to product development count most? What do you think?
Original Article
Is it my imagination, or is marketing research and interest in customer views on anything of importance on the wane? The thought was triggered by Steve Jobs' initial response to reports that customers were having trouble with the antennae on Apple's iPhone 4, its latest "superproduct." It was reported that he commented that iPhone 4 users would have to learn not to hold the phone by its lower left-hand corner, precisely the way many of us seem to grasp it naturally. Remember, this is a company that has been described by a number of its chroniclers, rightly or wrongly, as being somewhat averse to the use of marketing research as opposed to following the dreams and preferences of its product developers. Apple is perhaps the latest incarnation of SONY, which is said to have avoided such research in favor of its designers' opinions in coming up with products such as the Walkman. Apparently, the thinking is: Who needs customers' opinions or reactions when you can come with ideas and products like these?
It prompted me to go back to a very popular book of five years ago, Blue Ocean Strategy, to check my recollection of what the authors had to say about the role of the customer in fashioning a strategy that would enable an enterprise to escape from red, blood-strewn, competitive waters and fashion a course into the open, blue waters of market dominance, mainly through the design of new businesses and products before the competition might get to them. They wrote, "To set a company on a strong, profitable growth trajectory … it won't work to benchmark competitors … Nor is conducting extensive customer research the path to blue oceans [italics mine]. Our research found that customers can scarcely imagine how to create uncontested market space. Their insight also tends toward the familiar 'offer me more for less.' And what customers typically want 'more' of are those product and service features that the industry currently offers."
That brings me to a new book, Different, by Youngme Moon, a member of the marketing faculty at the Harvard Business School. She reacts to the proliferation of products and advertising that are so much alike that they create a blur in consumers' minds. Her call is for methods that will lead to counter-intuitive product development and marketing efforts—products, for example, that provide breakthroughs by offering less for much less or even more for much less, but products that meet needs that most of us can't even imagine. She describes how, by testing various product attributes through marketing research and shoring up the weakest, all competitors' products take on the same characteristics. As she puts it, "Meanwhile, the very instruments that these managers are relying on to establish and reinforce differentiation—competitive metrics, positioning maps, and customer surveys—have devolved into their obverse. They contribute to the herding behavior as opposed to protect against it [italics mine]. It's as if the entire community has been betrayed by the tools of their trade."
I have no particular brief for traditional marketing research. But is there a pattern here? Is it possible that "asking the customer" about anything of strategic importance is on the wane? If so, what are the implications for customers as well as those selling to them? What is customer opinion good for? What do you think?
To read more:W. Chan Kim and Renée Mauborgne, Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant (Boston: Harvard Business School Press, 2005), p. 27.
Youngme Moon, Different: Escaping the Competitive Herd (New York: Crown Business, 2010), pp. 43-44.
I believe that today the need to take into account the opinion of your customer is greater than it ever was before.
Since the recession and the reduced customer spending, firms operating in markets across the world realize that customers are unwilling to pay for any feature or attribute that they think is unnecessary, and firms have to try harder to communicate to and convince customers of the value delivered for the extra price.
At the same time, the need for a firm to listen to the customer's opinion also depends on, among other things, the industry, product segment, high/low involvement product, buying patterns, level of differentiation economically feasible, scope and ability to innovate, level of saturation in the market segment, and stage of product life cycle.
Also, as a matter of personal opinion, I believe the entire issue of the fuss over the antennae of iPhone 4 was handled very poorly by the company, with new statements and new reasons coming every day or two, and it only remains a good example of "how not to handle things and what to avoid saying when there is noise being created because of a problem with your product."
Of course, nothing can beat the PR disaster at the hands of a company in the case of the now-infamous Toyota recall of millions of its cars.
Now here's my opinion regarding the use of customer opinion in product development and marketing:
Just like there is not one detailed business model that works for every business there is not one PD model that works for every product. You can put most products into two general categories of Competing Products and Pioneering Products. Each category should take significantly different PD paths.
If a company's goal is to develop a product to directly compete against another product already on the market (Competing Product) then using customer surveys, as well as Internet chatrooms and such, can put the new product into a great position, especially if the first product gets some bad press and already has some readily know faults.
In bringing this into the iPhone scenario you'll see that iPhone already had some severe negative issues prior to Steve Jobs' comment with at least its limitation to only one carrier and that carrier's historically limited wireless availability in most non-highly populated urban areas. Now iPhone has some strong competition and is no longer the top ranked.
Pioneering Products should take a different path in PD. These products do require engineering creativity because they are products that customers don't know they want, yet. In most cases these products will require creative marketing campaigns, such as long lead-time teaser advertisements, in order to spur interest. Pioneering Products are always riskier adventures because most of the successful ones, such as gasoline powered horseless carriages, started by not knowing if customers can be convinced that the new product is something they want or need.
This is a fascinating topic, at least personally for me. But more than focusing on what good has come from asking customers about strategically important things or integrating those back into the product/service system, what I find more interesting is the proliferation of opinions, by customers, more than ever, online.
The internet, as a system, has opened up opinions from customers in a far more explosive way than any other formal channel devised ever. So, now we have customers cribbing about every single issue or talking excitedly about every new small feature. For instance, take every small feature added by Google, on gmail - their announcement of multiple sign-ins in the same browser is being talked about. I agree it is a spanking new feature, but just see the amount of opinions about it, online.
I explored this further and created a 'opinion economy' that rivals the earlier 'attention economy, in a blog post of mine - http://bit.ly/opinion-economy
First examples of customer opinions are important.
a) An article on a Harvard website about Coke and how it "discovered" and created a new market. It involved appointing an African American as a sales agent/manager before the civil rights movement and then increasing company profitability. It's interesting how when profits stagnate or plateau, every customer's opinion counts.
b) Another example in the present day with Coke targeting single, affluent working women with Coke Zero. Customer surveys tend to reveal changing preferences to tailor existing products to target demographics/ diversity of opinion. Hence the need to ask for your demographic groups in survey responses.
c) Another example would be Unilever in India. In his seminal article, the late CK Prahalad alluded to the fact that fortune at the bottom of the pyramid (basically extending the credit revolution as opposed to Karnani's hypothesis of creating jobs) was awaiting company's profits which were stagnating. So new customers were "discovered" who could be accessed by creating sachets (smaller volumes) of products rather than big helpings of products.
d) In a captive customer business (company is a price taker- lifeline utility), where the customer does not have a choice, customer surveys are usually important as the level of services are agreed to with the public. And hopefully delivered on! That is where customer opinion is a useful barometer.
And examples of where customer opinions don't count:
Christensen / Schumpeter's theory of disruptive innovation would come into play. You have to disconnect with your audience. Sometimes that is the only way left to succeed especially when going for broke:
a) Hollywood /Bollywood movie studios who fund movies even if audiences do not like them. This is because in a couple of bad movies they might strike one which is pure gold.
b) maybe financial behemoth Goldman Sachs, which came out with innovative financial products (which are basically repackaging different risk profiles to reduce overall risk in one product). It might tank a financial system but then new fangdangly products with supernormal returns (more for less) with minimal risk is what irrational investors are looking for. Although market research might help here to indicate that customers look for guaranteed returns!!!
c) Apple, Cirque De Soleil, Blackberry in its heyday, Yellow Tail wines (which only the authors apparently loved)
d) Hells Pizza (extreme marketing),42 Below vodka -repackaging existing products with a good marketing facade.
e) Indian art - indications of nouveau rich embracing Western sensibilities.
f) Life saving medical products
So customers' opinions do not count in startups where a conscious decision has been made that conventional wisdom will not become part of the business model.
Simply, market research is Porter's way of looking at things, a hard economic argument for and against. Whereas Kim and Mauborgne's theory is the marketing argument that accountants should not be in charge. I guess it's just different ways of looking at the world. Company politics always dictates what takes precedence.
Context of where you are is important. But a customer's opinion "always" counts especially when things go wrong after product development and marketing is done and dusted! Whether Apple or when there is sewage overflow into a customer's backyard. When the [redacted] hits the fan, you need damage control and customer receptiveness/responsiveness to be mantras.
With regard to Market Research, its validity is highly dependent on how you use it. If, say, you are researching a possible new product related to your restaurant chain, my experience is if it is higly polarizing, chances are it has a potential following.
As the person who was responsible for bringing the Rooty Tooty Fresh and Fruity Breakfast to market when I was a young VP of Marketing at IHOP, we did absolutely NO market research on an item that has conservatively been responsible for at least 200 million in sales for that chain.
Yet when I am working with clients who are trying to build a loyal base of devoted customers, I will always monitor their satisfaction with our brand through market research.
There are several good comments related to your article, particularly Abhinav Narang's.
More than market research it seems like "Buzz Marketing" or Word of Mouth marketing is driving the blockbuster products of this decade. Customer feedback and input seems to be mostly ignored in favor of the surprise and awe (shock and awe?) a new product can bring to a market.
This 'new' marketing (little customer input) seems very similar to the cars of the late fifties, large fins and a lot of chrome. This designer driven tactic taken to an extreme can have similar results if there is not customer involvement and feedback.
I feel there should be a balance of market research and designer input. Letting the designers and engineers talk to customers and end users would be a solid step in this direction. This might help to eliminate the 'cookie cutter' approach of market research.
And yes I do remember the cars with big engines, big fins, and lots of chrome.
Charlie
Whether a product is new or an improvement of what is already in market, it would be sheer folly to gloss over how the customers would react to it.
In cases where a need for a new product has to be created, it is necessary to arouse awareness of the product and interest in its benefits in order that prospective customers accept the product and eventually purchase it. It all boils down to winning the hearts and minds and pockets of the customers.
So how can we just scoff at customer research? A company that cuts its bond with the customers will soon be gasping for breath.
Clayton Christensen has done a great job of outlining some of the factors that can help understand when to use and when to ignore customer feedback - I refer you to the series of books beginning with "The Innovator's Dilemma".
There also exists, however, the charge for the organization to lead into what may be "new" waters, that which the stakeholders might not even be aware of, and possibly even, resistant to. If the organization has done its homework (due diligence) and knows the path to be new, but ultimately more beneficial, then they would be wise to not entertain the survey/research approach and lead with conviction, sensitivity and a sense of purpose.
While it is important to understand user needs, how you meet those needs can be in ways that customers had not initially requested.
Users who want a compact mobile device that lets them type with a full keyboard are much more likely to ask for something resembling a blackberry than they are to even think that the concept of a virtual keyboard like the iphone is even possible.
The customer, client, consumer, and end user is the ultimate "boss" of a company. An enterprise exists to produce revenue for its share-holders but it can only make revenue if it has a product that is well valued by consumers in the market place. Micro Economics have for years pointed out how fickle consumers can be, and as we have recently witnessed in the cellular phones industry, the raison d'etre of all of Apple's competitors is to offer the consumer at large a worthwhile alternative to Apple's iPhone. The industrious folks at Google are giving Apple a run for their money.
The simple answer to this month's question is: Asking the consumer for his/her opinion may be on the wane but it should not be. If companies are not seeking the consumer's opinion, they are doing themselves a disservice and they are operating in a vacuum filled with avoidable risk. As "super" as Apple's iPhone is, it would be a failure if its antennae does not work for Apple's millions of consumers. The sellers of phones with Google's Android operating system would like nothing more than to welcome Apple's "ignored" customers.
Asking customers their opinions can lead to insights that produce innovative strategies. The question is "Will it?" It takes more than just looking at the current market, current products, and current processes to produce disruptive technologies that will shift the attitudes, behaviors, and opinions of consumers.
I like the quote from Henry Ford (comment 11). I think about the resistance scientists like Bohr and Einstein encountered in shifting the thoughts of the scientific community. Even facts often do not sway skeptics. And let's face it, our businesses are full of skeptics in leadership positions.
Consumers often know what they want, but often lack the imgination to produce anything beyond what is already being done. Those with imagination struggle in the business world to push against established technology, business structure, and business processes to create something "new" and "different." So, you continually get a "cheaper, faster, better" version of what is already being done.
This is why entrepreneurship is a critical building block of a capitalist society. Although innovation can (and sometimes does) happen with the "big boys," it is often in response to the competitive pressures coming from a presence of entrepreneurs in the market.
Strictly my opinion...
If a product is being positioned as evolutionary (possibly much larger value add, but same paradigm for customer) then the customers' voice should probably be weighted heavily. If it's to be a disruptive product, I'd suggest the customers' feedback should also be abstracted to a slightly higher level. For example, maybe the customer is asking for something to be 1" smaller, but what they really mean is that they'd like it to fit easier in their pocket. You could make something with a radically better design but does not directly meet their specific request. The more disruptive the technology, the more the team should discuss the customer feedback/requirements and thinking, "What are they really asking for... at a high level?"
1) Consumers are very good at explaining the frustrations and problems in their lives.
2) Customers can tell you about their lifestyle.
3) Consumers can accurately tell you about past behavior, but not future behavior.
4) Consumer opinions about hypotheticals are worthless.
5) Consumer opinions about something new and different is worthless.
6) Consumers tend to be polite and are more likely to express intention to purchase than they really will.
7) Consumer biases affect answers--they are more
forgiving of brands they love and less forgiving of brands they hate, and the halo effect taints all the ratings attributes.
Therefore , I usually stick to asking about problems, lifestyle and past behavior. If I can understand what they are doing now, and how it frustrates them, then I can use internal expertise to find a better answer to their problems that will fit into their lifestyle.
The problems with consumer research is another reason why I prefer test marketing over consumer research. Given that a lot of current innovation is digital on the internet, it is easy to do a lot of beta testing (maybe that's why consumer research is out of vogue).
One of my favorite stories about consumer research is from Bob Lutz. He said that when they did research around the Thunderbird automobile, people loved the car. When asked if they would appreciate it if they made the car a little bigger, the majority said yes. Therefore, Ford kept making the Thunderbird a little bigger, until it became so big that is was no longer a little sporty sports car and then people no longer liked it. They now hated the car because it was too big.
I spoke more about this topic in a blog way back in 2007 (http://planninga-from-nanninga.blogspot.com/2007/05/stop-listening-to-me.html).
I think you're onto something: the amount of solicited customer input is way up, but the quality of insight is way down. Renee and Chan were right in Blue Ocean, and I love your colleague Youngme Moon's formulation of the issue.
It also goes back to what Mike Porter wrote around two decades ago: that 'best practices' and 'benchmarking' are inherently anti-strategic, because they foster herd-gathering and sameness, rather than differentiation.
The dominant trend of our time seems to be the application of behavior psychology and metricization to smaller and smaller scales. Thus what passes for consumer input these days amounts to impersonal data-collection on pre-determined scales, amounting to not much more than 'in this particular instance and moment, precisely what were your emotions, on a scale of 1 to 10.'
Historically, consumer high tech succeeded by ignoring market research, simply because what was needed was radical, and consumers couldn't envision alternatives to the only reality they knew. It took, and takes, visionaries to come up with the next 'cool' product that people will stand outside stores for. They stand there because they know they will be delighted by something they can't envision.
Meanwhile, all the P&Gs and Hiltons and Verizons are digging themselves deeper and deeper into indistinguishable masses by their increasingly 'customer-focused' descent into meaningless, anonymous consumer trivia. If Steve Jobs occasionally lets his arrogance get away with him (and this was hardly the first time), I find it easy to give him a break; his average is way better than Derek Jeter's, and I for one find my iPhone4 antenna issue pretty much a non-issue.
The kind of market research that would be useful for strategies is more focus groups. But I don't hear much about that anymore, instead I get blitzed with emails and hotel cards asking me to 'please take a minute and give us feedback.' I stopped doing that a long time ago.
I propose Kim/Maubergne and your colleague Moon get together and write a new book called Blurred Herd. Just don't do any market research on the content.
The head of GM's marketing here in Canada said he felt burdened by the amount of market research done and not read but seen as a necessary hurdle to jump in the marketing process (CYA research).
Michael Porter's 5 Forces Model does not look at competitors except in a strategic manner also used by the Blue Ocean strategy - look for substitutes, etc. Porter called in competitIVE analysis, not competiTOR analysis.
In an ideal world where we have loads of time, fine, dig into your competitor. But most of us do not have the luxury. Rather spend the time exploring other industries for ideas and other countries for fresh concepts and models.
Cirque Du Soleil, described in Blue Ocean, was the number one Entrepreneur winner for Ernst & Young in their global competition. When I read Blue Ocean, it reminded me of Porter's style of Competitive analysis. I really agree with not looking at the competition when wanting to rethink the business model or big strategy.
My son's Canadian video game designer is brilliant - they give out the game free for a weekend and allow it to be open so that people can rewrite code and give feedback over two days. My son "works" at this over the weekend and is also now wanting to buy the game. Now that is good client research.
Small-scale qualitative behavioural studies can be just as illuminating (if not more so) than giant trackers.
MR is certainly not the be-all and end-all but used wisely it can help inform strategic decision making and remains, in my view, very relevant in the current climate.
Admittedly there are some limitations to consumer research. The first is the creative and analytical ability of managment to structure the proper research and then to correctly interpret it.
The second is that consumers are typically not very good at imagining something that does not exist. They are better at reacting to things and defining their "problems" that they would like to see resolved or alleviated.
Bottom line, the customers were telling them by their actions what they wanted. Was the store listening? Flowers may have been the "fashion of the year" but no one was buying. Out of curiosity I asked the younger ladies at work what guides their choices in clothes. They say they cannot afford to buy a lot of clothes that cannot be worn at work. The more solid and basic colors are easier to mix and match
and look more professional. Hmmmmm.
It is important to know your customers...better than they know themselves. The skill is developing a staff of people who can watch and evaluate customers to find what they really want and will buy.
The customers have the final choice. They will tell you through behavior what they really want...not necessarily by answering marketing questions.
Be careful that corporate blindness and processes prevent you from seeing your customer. We often shape questions from our viewpoint not the customers and that gets us in trouble. I think it was Einstein who said he wished he was smart enough to even know what question to ask. That should be on every marketer's desk.
I see small businesses fail to gain customers because of bad customer experience...customers who then tell their friends about it. I've seen people avoid buying, no matter what the need, at large companies like Sears, Qwest, Clear, Facebook, etc. because of bad experience, and I see people leaving the church because of bad experiences.
The number and variety of bad experiences may be with the product, with support, or just rude behavior by someone representing the company.
The opinions of the customers regarding experience is paramount and I find companies seem to be doing less and less research in this area. There are a few who ask customers to take a survey about their experiences, but all of the ones I've seen seem to be like filling out a political questionnaire...not relating to a person's individual and particular issue.
To imply that Apple doesn't slavishly and momentarily access customer opinion is off. They live and breathe with their customers, and have an almost viral connection to them. Jobs isn't your average suit.
But customer research is often just plain bad stuff, motivated by executives so out of touch they have no idea who the customer is let alone what to ask. Professionals in the game can and often do offer up amazingly well crafted inaccurate market scenarios, identify absurd markets and products, and verify whatever opinion they are paid to affirm. It might be like Demming's "the existence of a quality control department is a sure sign of a sick company."
If you need to hire independent professional research to tell you about your customer, it's a sure sign you are in for a nasty market shock no matter what they tell you. Apple's customers are embedded in the company culture, flood the company with advice and ideas every microsecond, flesh and muscle. Listen to Frodo.
Research to understand the playing field beforehand is always valuable. Beyond that, in my opinion and based on my experience, there are two basic approaches. One is to address a need or desire consumers are aware of in which case testing consumer approval is valuable. The other is to create an awareness of a product or service that you feel will address a consumer need or desire they may not be aware of. Testing here is valuable too.
Key is that the research be done in a scientific way, i.e. that you not skew the research through the wording of questions or other means to "verify" a preconceived outcome.
Of course, you could forego the research if you feel you understand the market and your customers well enough already and trust your informed "gut" (an HBS tradition) and your track record. This is usually the case with small businesses where resources may not be available to do research on a scale where the sample is large enough to be meaningful.
In my career, I have used both approaches with about equal success. It all is relative, isn't it?
Perhaps it is an indication that the industry is shifting from the phase when most attention was paid to the features of the product to the phase when most attention is being paid to the conceptualizing or re-conceptualizing of the product.
If you actually asked that question in a survey - something along the lines of what do you think the next big development will be, or what trends should we be watching to develop our next product, or simply, what do you hope we develop, we might get some customer insight into where the next 'uncontested market space' will emerge.
We should never assume that because customers want 'more for less' that they cannot think about what's coming next if given the opportunity. I suspect (and happy to be corrected) that most current market research focuses on the present and that won't get you anywhere near 'uncontested market space', which is all about the future.
Ask customers what they think about the future rather than the present, and we might get some very useful ideas.
That is not to say that customers are of no value in helping shape our future direction; we are all part of the human condition after all. They are just as likely to be the catalyst for real disruptive innovation as anyone or anything else, we just have to learn how to listen to them at a level that feeds our own creative centers.
I am sensing a decline in respect towards customers' emotional appeals. Manufacturers are somewhat regressing into a very harsh 'here's my product and it has all these superior features, take it or leave it' mentality. Jobs' flippant reaction is very telling of this. While sales of the product may still reflect a robust following, I'm quite certain that Apple has ruffled many a feather along the way (unless you're a completely emotionless human being, of course). It's sheer arrogance to continue in this direction - whether or not profits project otherwise.
An organisation has a responsibility towards its customers. Towards its physical as well as its psychological needs. No amount of market research and R&D can redeem customers' trust once this responsibility is forsaken. A customer's opinion does matter and the organisation's responsibility in simply acknowledging it will inspire trust to a certain degree.
Loyalty of any kind will be impossible if opinions are ignored.
For products to sustain and grow, customer feedback is essential.
If you ask people what they want, they can only tell you within the framework of their own experience. That can only lead to a better mousetrap, not to the breakthrough thinking that led to the horseless carriage.
That is why, as Akio Morita explained: "Our plan is to lead the public with new products rather than ask them what they want. The public does not know what is possible, we do." And Apple is the new Sony.
That does not mean you should not ask consumers: the question is what to ask them and how. It's about understanding consumer needs, not asking them what they want.
Nor is new product development the only reason to seek customer opinion. You ask, 'Is it possible that "asking the customer" about anything of strategic importance is on the wane?' It seems to me that listening to the consumer at all is on the wane: when a few hundred mothers complained that new Pampers Dry Max was giving their babies a bad rash, a P&G spokesman told Bloomberg, "We're insulted that someone would imply that our products are dangerous." Yes, P&G.
Microsoft and Apple were in different phases of the company lifecycle and they had contrasting product development processes. In Microsoft, product managers have lot more decision making freedom in developing the product while Mr. Gates' role lately was more of bring in the best brains as the product mangers. In Apple, Mr. Jobs was in control of the product development process but it seems with his recent health concerns he may have relinquished some of the decision making freedom to the product mangers, like Mr. Gates, whom he expected to do as comprehensive jobs as he would do on product development. The product development decisions were decentralized in Microsoft and they were centralized in Apple.
When Microsoft releases a new product or new version of an existing product people expected glitches and patches and frequent updates because it was the culture in Microsoft. When Apple releases a new product or new version people expected perfection and something new because of the great innovator status of Mr. Steve Jobs and the culture in Apple was an overdrive to perfection. People saw Apple as a little ahead of the product development curve while others was a little behind the product development curve playing catch up. With the antenna-gate Mr. Jobs' first reaction was to minimize the severity of the issue by asking consumers to hold the phone in a different way because Apple (culture) could do nothing wrong. Then Mr. Jobs' reversed course and admitted that Apple is human (not perfect) and the phones are not perfect followed by firing the product manager of iPhone 4.
Mr. Jobs did what he did because in the high value, high end, and branded "phone" market he is the innovator who leapfrogs and people accepted his products like the future of phone technology. Mr. Jobs may read customer input on the "phones" but it may be what is possible in the near future that drives his "phone" development process. When Microsoft created Vista people complained about many aspects of Vista operating system and as you may have seen on news papers and TV, the advertisements acknowledged that Windows 7 was created to address the Vista short comings. Windows 7 product manager(s) read customer input on Vista and incorporated it in Windows 7 because Windows 7 is not leapfrog technology.
What is Mr. Jobs' thinking for iPhone 5? Can tech savvy customers give him a hand now that he is human?
Therefore, smart research, integrated intelligently with practical business tools, is definitely needed (selective, relevant, well-timed, clearly understood, properly used and correctly applied); at the discretion of the astute marketer. Research is not a matter of ticking a box in the company process; it's the way that certain things need to be done. It's arrogant to assume that even the brightest and most experienced minds have the sustained ability to bridge the knowledge gap without aid of some sort. Naturally, the identification of white spaces and new categories would adopt a different set of rules; however concept testing is never a bad idea prior to investment and company exposure.
Powerful research is as much a science as what it is an art. Creativity and customisation are critical to the outcomes. Let's not forget the wealth of knowledge that can be found in proper desk research.
The first problem in modern research is the cost-leadership approach that is adopted by most research practitioners - margin squeeze in a highly completive environment; compounded by the recessionary environment. Fine art does not come out of a factory.
The second problem is the fact that the barriers to entry are low, allowing the crafty salespeople to worm their way into the research industry with impressive multimedia pitches; overshadowing the real research scientists/artists who may appear dull and expensive upfront; price is myopically prioritised over value.
It's true that traditional marketing research misses many customer needs. But the problem perhaps lies in the way traditional marketing research frames its methodology.
Asking the customer what they want may frequently end up missing many opportunities, simply because many customers lack the imagination, sophistication or the patience to tell you what they want. Instead, working with the customer to jointly explore what may meet their need is likely to be the most productive route.
Rather than saying, "You throw me your need over the wall, and I'll throw the finished product back over the wall," dissolving the wall and finding the best product collaboratively is the way to innovation.
As far as product development is concerned, I believe more and more people are adopting the stage gate product development funnel, heavily involving inputs from customers. At the initial "fuzzy front end", the (VOC) "Voice of Customer" techniques are applied to not only understand but also prioritize customer needs. Once again, customers are involved at the concept screening and features trade-off steps.
After selecting the markets they want to play in, strategic planners increasingly use various interactions with potential customers before they recommend mid terms strategic priorities for their organizations. Customer Satisfaction surveys and Net Promoter Scores are increasingly used as an indicators to gauge future growth and companies are so convinced of this that they even tie up individual performance reviews to these ratings.
Almost all companies include "Customers are our priority" among their core values! Of course, the management will make sure that those core values are in some way gets incorporated into your day to day functioning.
Then, the relevant question to ask is whether involving the customers' opinion effective? Did it help you generate more sustainable revenues and profits? Whatever you spend on the consumer research payback better than your internal rate of return (IRR)?
Most will agree with me that answers to these questions is an overwhelming NO. To see the corroborating evidence to this thesis is to look no further than the result of most product developments projects, which have many lofty goals but end up with reverse engineering of existing competitors' products.
At the same time, you can also argue that there are good numbers of companies who have been using similar approaches (Proctor & Gamble, Johnson & Johnson, etc.) for decades and have been very successful with these.
Hence, the answer lie not so much in consumer market research itself but more on how effectively you are collecting and incorporating into your model. For example, you can ask customers, what their pain points are and arrive at the underlying needs. However, you should NOT ask, what features the products should have. It is the job of product development team to translate those needs into products.
How many companies just pay lip service to customer supremacy to whatever activities they are planning? How many of these companies really invest in training their folks so that they can use these tools effectively? How many of these initiatives are just "fade of the month"?
In view of the discussion above, it would seem logical to conclude that customers' opinion will always matter for profitable and sustainable growth, and hence some companies will continue to invest in consumer research. The key will be the people who know how to get it and the processes to incorporate it in their decision making.
Thank you!
Gerald Nanninga & #9, truly touched the core here. Because the fundamental premise of any innovation starts from the word consumption. There has to be a consumer to consume your product.
We tend to measure/debate every thing in white or black. Remember there is a gray area, too.
Read all the above comments and of course the post by Prof. James Heskett, and I am sure you will have many contradictory examples.
Because, when Henry Ford was saying, "If I had asked people what they wanted, they would have said faster horses," he himself forgot that Coke had innovated the other way round: "If Coke had not listened to the people, they would still be selling Coke in chemist shops!"
So, the moral of this debate/ discussion is: "Innovation: whether disruptive/incremental can happen with or without consumer opinion." For example, several BOP innovations are happening because they were asked by the consumer, and you bet if they are not disruptive! Similarly, several incremental innovations are happening without consulting the consumer; seems logical!
It's now more a matter of "open innovation," where everything can happen. The human mind has a great disguise power. It's the power of identifying patterns. We tend to draw patterns in the behavior of everything. And many a time, this power haunts us in the situations where we are prone to search for a pattern even when there is none!
The challenge to self-reports, and all the socio-cultural/immediate mood/temporary circumstances/social desirability limits, is also increasing as "customers" become more diverse and time-pressured, etc.
We are also realizing that buying behavior is highly immediate, episodic and often random. In addition there is increasing evidence that conscious choice-language is predictive of less and less and is largely post-hoc.
But as a producer, I think the customer is not paramount. The strategy of Sony/Apple is no different from that of any other producer in the world. "Let's produce something and then we will convince the customer it is right for you." Why else do we have to spend so much on advertising, PR and promotions?
Sadly, in this war, the producer is winning. The travesty of each of the battles in this war is that the customer is told that the 'customer is the King' at each stage, so that he never realizes he is actually the slave.
Must Ask: When the problem is clearly known
His opinion matters the most when you have an offering to satisfy his known need &/or is hitting the stands soon (few months) or when you are not the pioneer & want to avoid being a 'me-too' product. In such cases, his feedback on factors like the unsolved problems (meaning known problems), value associated with solving them, possible roadblocks to adoption, gaps in available offerings, preferred pricing levels etc directly shape the product or service. The customer in such cases has sufficient information of the problem that would not need much imagination or make it simpler for the companies to let the customer imagine. The responses would also be useful for improvisation of existing offerings.
May Ask: When the problem itself is unknown, or only partly known. They point to an underlying 'want' or an undiscovered need. Typical cases could be that a new technology is available waiting to be evangelized or applied. At this stage, the researching company should at least have a functional prototype or sufficient information to allow the customer clearly imagine the problem & solution. Information desired from the customer in such cases would be anything that would help us develop the problem, identify new applications, identifying the best fit solution to the possible problem from a basket of options or alternatives, identifying or quantifying the effectiveness of the solution etc. Such feedback provides valuable insights in offering the right solution. The customers approached for the research should normally be early adopters or at least not laggards and amongst the strategic clients of the corporation.
Do not /need not ask: Just show them the way ....
Normally applies to Blue Ocean offerings (which are sure that it is going to be the future need or an existing unknown need) as in the context of Breakthrough Technologies and hi-tech products, which involve paradigm shift in the mindsets. Early revelation of most breakthrough offerings makes it difficult for the customer to imagine the offering and its context, if it is an undiscovered need (which is mostly the case). A customer's opinion in such cases may fail to provide the required insights on account of the customer's inability to 'Imagine the Unimaginable 'or may provide wrong insights, derailing the product conception. In such cases, as Philip Kotler says ..."The most important thing is to forecast where customer is going & be in front of them". Forecasting and making informed guesses may be the best option.
are essential attribute for any product and services to enjoy competitiveness. For example, how nokia enjoys maximum market share in handset mobile segment. It keep on launching same product with additional features and new design. Desing is always designers thoughts and creativity. Addtional features, reliable functionality and differently look product design has more emotional appeal and advantage over unreliable functionality and similar look design. Newness always pays more and similarity pays less.
However, when you create new product or services that is not existing or beyond reach of people, you do not need to solicit customers opinion. But in both the cases, there should be need in the market. There are many products or services which were not imagined before it was started. Western union money trasfer, which remits money from abroad to India not only to banks but to postoffices and other small offices. It is the sole remitter today. Similarily, internet banking , core banking, mobile banking are example of designer thoughts or creativity. But they again depend on the customer needs and gap. So, designer should provide faster and ahead than customers' wants and expectations, then only he can enjoy market share and competitiveness.
As with most situations or questions in the business world, your questions seek to address the duality/ contradictions inherent in the use of customer views/ feedback in product/ service development. There are businesses that are trying to expand faster in a space that other companies are already operating in; there are businesses that want to tap into the latent needs of customers that remain to be addressed by the larger industry. And then within the same industry or a basket of products of services, there are aspects that customers want more or less of...and there are things that they have not vocally asked for, but there is a latent need.
Companies would do well to use a combination of approaches and balance the requirements of the two and come up with an offer that creates a competitive edge by providing the best in the already existing product/ service space on offer. And offer something that is substantially differentiated by tapping into those needs that customers are yet to voice. Ignore customers at your peril. But remember that while customers are kings, they may not be the wisest..
Businesses that can well-balance and tap into this dichotomous nature of the market-place are the ones that can succeed in the long term. Sadly, it is seen that companies adopt one approach or the other...the best solution would be to have two teams that work on these different aspects of product/ service development and balance the need to do both; in some situations, more of the first and less of the second; in others, more of the second and less of the first....
It is all a question of degree, and it is easier said than done to identify how far one must go in listening to or ignoring the customer's voice.
Venkatesh
Bangalore, India
I found the opening question and the entire range of thoughful responses an outstanding 'expert' forum on the entire field of opinion collecting through surveys. It has caused me to reflect on the half dozen surveys that are currently in development on my desk and will, no doubt, lead me to make some fundamental changes.
I remain convinced that collecting input from key informants is a valuable process but I most appreciate the distinction drawn by several of the respondents between input to fix something that may be broken or in need of improvement and input to create something that never was to an exploit a vague, emerging opportunity.
To use the Henry Ford example, if you asked how to improve on the horse drawn carriage, you might get the answer Ford projected. If you presented the vision of a horseless carriage with the power of a 100 horses and asked if there was any interest, the answers might be quite different.
Thank you for asking the opening question.
There are several issues at play here. First, let's not leap from Steve Jobs' comment to utility of marketing research and customer opinions. His comment is more a reflection of a product-centric mindset. Regis McKenna referred to this in his book Real Time - "companies love their factories and products more than they love their customers." Steve's statement merely indicates that he loves his product more than his customers who buy the product.
The issue however, is not Steve Jobs, it is could these same passionate customers have told Apple that they wanted the iPhone and how it should be designed? Absolutely not. That is the biggest myth propagated by MR&CO advocates. But can they respond to prototypes and concepts and say what they like and what they don't? Definitely. Can they behave in ways that can open new vistas that the company had not thought of? Absolutely. Happens every single day; "apps" were a contribution customers made to the iPhone value bundle, not Apple.
Creating the future is not about asking a question and expecting the customer to give a perfect answer. It is about understanding customers' value trajectories and determining what innovations will better fit these yet-to-occur realities. In my new book, "Collaboration and Co-Creation: New Platforms for Marketing and Innovation," (www.knowledgekinetics.com) I discuss the importance of Listening, Engaging and Responding to customers to shape both current and future value propositions. The customer is an integral part of the shaping process, but there is no attempt at asking a battery of questions in the hope of getting perfect answers.
Henry Ford was absolutely right when he remarked that if he had asked the customers they would have asked him for a faster horse. But he was also dead wrong about customer value. He was so busy telling and show casing his superior technological achievement that he became both blind and deaf to customer opinions and preferences. Henry "Buck" Weaver, GM's first director of MR, however, had no such compulsions to show and tell. So he spent most of his time listening and talking to customers, understanding their lives, their needs, drawing pictures of future cars, getting their reactions, and redrawing them. I am pretty sure that the phrase "rapid prototyping" didn't exist then. But that's exactly what he was doing. Oh yes, he used questionnaires, they were state-of-the-art then (early 1930's), but he did a lot more than just ask questions.
It is impossible to shape innovations and future offerings without a knowledge of human needs and how they are evolving. In my book, Collaboration and Co-Creation, I discuss examples of several companies and organizations, like Unilever, Hallmark, Blizzard Entertainment, Phoenix Suns, Crayola, IBM, P&G, BMW-Mini, and Nokia, that have gone beyond traditional MR, but continue to benefit from customer inputs by Listening to them in natural environments, Engaging them in meaningful conversations and events, and Responding through authentic, meaningful action.
Innovation is in three things organization, process and target. If we combine thesew then there is success.
There is, however, another major reason for listening to the customer - active listening achieves customer satisfaction. As any good salesman knows, an empathetic salesman can easily get away with selling a poor product.
is well achieved via satisfied customers who give repeat business day after day. With a lot of competition around and providers of same (or similar) products aplenty, it is a matter for indepth examination why would a customer prefer one manufacturer's product over another's. No doubt, product quality matters but we need to agree that customers, and customer opinion, hold a very important place in our lives. The faster we can adapt to accommodate customer needs, the stronger would our company's reputation be.
Discovering what constitutes good customer service does not happen by osmosis. We have to ask.We must have open ears and learn what our customers want. Yes, there could be some customers who make demands which cannot be met but experience shows such cases are few and can be tactfully ignored.
If we do not know how we are being perceived by our clients/customers, we do not know if we are truly hitting the mark we set out for ourselves. We have to ask and seek answers. Using today's technology, this can happen by using something as simple as a feedback card, or by using an online service. Plenty of options exist.
After information has been gathered, it is to be analyzed. Based on this, we can make informed decisions about how we can improve to meet customer's needs, and give them the right impression and opinion of our business.
In nutshell, customer opinion is a value-addition tool and must never be considered as an unnecessary exercise.
Customer opinion is good for understanding what they don't want/need.
Their need/want vary from one to another, but most of them have similar opinion for what they don't want. Lets take example of fashion industry, if the designer ask his customer for new killer design, they may not able to articulate what exactly they want, but they are clear about what they don't.
It also depend on what exactly you are asking to your customer/potential customer. The real depth answer come out by engaging their customer in fun and intuitive way.
Kunalkant
Companies should seek to "understand" the current/future purchasing decision making of their current/potential customers, and this should be the aim of their market research efforts.
Market Research is not only a survey of opinions or benchmarking of competitors' offerings, but an effort to inspire/tell the company of new endeavors/improvements that strategically fits its capabilities, and redefine its position in customers' mindset and lifestyle in order to acquire most possible customer value.
Now more than ever the customer has regained their buying power. The economy is not where it once was and companies can no longer have customer service restricted to a department. The whole company ought to represent the customer! One would hope that customer service is improving in order to attract business, but this may not be the case. New research shows that customer service in some industries are actually worsening. Not smart. Smart businesses know what matters most in hard times and at all times: The Customer.
Customer Service Excellence - provide it today or prepare to go out of business.
Bad ideas, lousy products or services can be avoided by serious market research.
The mixture of both is sound equilibrium : this is what management is about.
However, an important aspect to be considered is that every business has varying degree of "customer inetraction/participation/involvement" (Should coin a new term which would indicate the extent of involvement of the company with its customer i.e. getting insights etc)
This degree of involvement will be directly dependent on the type of organisation and the strategy adopted by it.
If it's a niche player, the surrvival/profitability would depend on maintaining teh niche in delevering the products or services.
If it's in the services sector, the degree of involvement with the customers would be high because the profitability and future of the business would be dependent on how successfully it meets the needs of the customer including the latent needs.
Now for the latter organisations the criticality of the MR is greater than that required for companies with lesser degree of involvement.
So a matrix can be developed on the type of industry and the extent to which MR plays a role in that specific industry.
I would like to add that the quality of market research is also important to bring out the real issues associatedw ith the product or service. Many a times the MR is administered just for having your gut feelings being supported when someting goes wrong and not necessarily with the intention of getting insights from the customers.
As anyone who has been involved in product development can tell you, there is a chasm between market research and the realized product. I would be willing to bet that in the case of Apple's 4G phone, someone well below Steve Jobs tried (and failed) to get the issue fixed before it became public.
Although Professor Heskitt's article focuses on consumer/customer market research validity, the successful product launch consists of three key elements:
1. Market research from all sources, consumers and customers included.
2. A discplined product development process.
3. Everyone, from the CEO on down needs to park their egos at the door. How many potentiallly great products have been derailed due to corporate infighting and turf wars?
If these three rules were adhered to by Apple, consumers might be able to hold their new Iphones any way they wanted.
Many customers do not know exactly what they want. It takes a good filtering system to sift customer opinion and not be misled. Yet many innovations have come through responding quickly to consumer needs. There comes a need for a balance.
My take is customer opinion when adopted through the lifetime of a product and appropriately deployed can help keep the product abreast or probably a little ahead of industry. How do you react appropriately to customer opinion?
A number of products have been developed bottom-up by looking at the trend of customer opinions and building a straight fit for their needs.
Great innovators always have dreams/brain waves which a lot of customers may not be able to take yet. Requesting opinions early on in development and using such opinions to modify and add-on while keeping the core concept may be a great way to innovate. Your product would come out to a grand reception reducing costs of initial trials and marketing.
I have spent my career in high tech where the debate is especially relevent -- how useful is customer input on something which is completely new?
I would like to propose that if the purpose of the market research is to develop a very deep understanding of the customer's desires, motivations, pain points, etc. If one can develop an imaginative understanding of the customer's needs then one can imagine how new technology can enrich the life of the customer.
This is hard, and since we are talking about insight and understanding we are talking about conclusions that are not statistically valid.
I believe that Steve Jobs is one of the most creative and exciting visionaries of our age. Although I am told that he is not an enthusiast for traditional market research, he possesses two qualities that make him truly unique. First, he is able to recognize unexpressed needs and desires -- he has a very deep understanding of how to enrich people's lives. Second, he has the self confidence to act upon his convictions. Whether it was the color iMac, the iPod, the iPhone or the iPad, no team that I have ever been associated with had the courage to act so boldly and to be so different.
Market Research as prescribed by the high priests of research just may not be the best approach for knowing one's customer well enough to anticipate and solve problems that he/she cannot even express.
However am struck by a couple of things in the general thinking around consumer behavior
i. Does individual customer "opinion" precede behavior and shape it in a causal manner? Or, does opinion come after the fact of behaviour? If the former, fine, let's ask them or find ways to understand their opinions; if the latter, let's at least take a deep breath before we ask individuals what they think?
ii. Equally, how many of the choices consumers make are actually independent individual ones based on qualities and characteristics of the product and how many are shaped by the choices of others?
If the former, then again, asking opinions of individuals could be of real help; however, if it is the latter (and at least one answer here suggests that this is much more common than we've tended to imagine or admit) then asking individuals about their opinion on a product or service is likely to be unhelpful if not downright misleading.
In thinking through such practical questions, it's always worth making sure we've got our map of human behavior correct - humans, after all, are supposed to be Marketing's specialist subject!
It would be wise to assume that customers know what they don't like about the products they use. It would also be unwise to assume that customers have the imagination to know what would be better. This echoes the Henry Ford quote from the previous commenter that if Ford had asked his customers what they wanted they would have said faster horses.
Apple engineers, and those in the mass-market retail space, have an advantage in that they happen to be users of their products and work and live around other users who would have relevant opinions on any new wiz-bang features. All they have to do is watch their fellow employees using the products in the lunchroom and at work, so it's not true to say Apple does "no market research"
For those who have to create products for a niche market the task is more challenging. In these cases, market research is critical, however, while it still takes understanding what the user wants, it requires imagining something that your customer will actually purchase that both doesn't exist, and that your customer can't imagine that they will want.
As others have pointed out, there are two important data streams when developing a product: One is customer problems for which they have no solution, and the other is whether the proposed solution is better than the alternatives.
This is why product development must involved continuous and iterative customer research -- get into the minds of the buyer, so to speak. So, prototype, test, refine, test, refine some more, test some more. Change where necessary.
1. there will be only a few person with the same exact wants/needs and agenda
2. most would hope to "win" ... that mean more value at lower price
3. most assume that they are objective and not emotionally bias
4. with information freely available and most quite well trained on dealing with companies ... most will try to "cheat" the survey
So the most important things in gathering opinion is knowing which tools and how to design/conduct the survey in each scenario ... there is no one tool to be used.
That's why some of the so call "gut feel" or "experience" are better ... which is depending on a few "experienced" person views and observations rather than the "average" customers.
I am a fan of following intuition, but intuition can be educated by research. Motorola had 90% of a winning blue water strategy with Iridium unfortunately their market research was no where near as sophisticated as their gadget.
Complex and innovative business plans call for sophisticated comprehensive research.
Even those who crate a new product have to depend on customer response to gauge its acceptability and attend to unforeseen glitches discovered in their use to modify or replace the product.
In fact in the product-profit chain the customer is the ubiquitous link no business strategist can afford to weaken.
First of all congrats for opening up such a provocative, relevant topic on the board. Being in the market research profession for last 10 years I have faced this question time and again.
Should you research your offerings, your communication, your packaging? Or should you rely on your intuitive abilities and take the plunge? Had we listened to market research, our company possibly may not have been able to bring Pulsar motorcycle to market. This is a brand that went on to become the market leader in that respective segment in a flat 3 months and almost single handedly created the category, and remains an aspiration for all average motorcycle buyers in India. Market research revealed that this would not work.
To my opinion, one should have a clarity on where to use market research and where not. Market Research can not generate a good communication story for you, it may not be able to tell you which kind of new technology to be brought into market, and it can not tell you what volumes a completely new kind of motorcycle will generate.
In short, anything which is new and generative in nature can be very well put out of purview of market research.
But than what is it that market research is good for?
Market research works best when it corroborates the situation practiced in real life. i.e. it can help you to understand the product irritants and hence product improvements. It can certainly throw the new insights on how best to sell your product. What is your customer? Where to reach your customer? What channels and means to adopt to reach him? What tonality of message works well with him? What kind of communication would alienating? etc etc..
Think of the great words by Ogilvy: "The customer is not a moron, she is your wife." Doesn't that sum it up?