• Wednesday, May 22, 2024
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The four best (and worst) uses of market research


Experience and research suggest that many CEOs look for growth in the wrong places and in the wrong ways, thereby missing opportunities and leaving them for the newbies. In a sense, though, this is good news: success lies in doing things differently, not spending more.

Specifically, there are four approaches organizations often take, none of which reliably lead to the actionable insights that business leaders need:

•Seek and profile large, growing and profitable markets

•Solicit feedback from current best customers

•Segment markets based on customer attributes, such as demographics, or based on product characteristics like “high end” vs. “low end,” “regular” vs. “light,” etc.

•Benchmark progress against competitors

In each case, it’s easy to see why an industry leader might have interest in the findings; however, these outputs speak primarily to aspects of the existing business or to the franchises of other established players. In other words, mapping current demand reveals little to nothing of the less-visible latent demand that is essential fuel for transformational innovation. As Henry Ford mused a hundred years ago: If he’d asked folks what they wanted, they would have asked for faster horses. Echoing Ford, Steve Jobs noted that consumers can’t describe what they’ve never experienced.

Making market research work harder

The first step toward actionable insights is to align market research with desired outcomes. Organizationally, a way to facilitate this is to split the research initiatives for tracking and improving business performance from the ones for transformational innovation. The next step is to give market research the right assignments. There are a number of jobs that market research can perform to advance the quest for profitable growth; let’s focus on the top four:

1. Focus on consumers’ jobs-to-be-done. Former P&G CEO A. G. Lafley spoke of consumers’ poorly addressed jobs as “nuisances” and encouraged his teams to identify and resolve them. Breakout products such as Swiffer, Febreze and Crest Whitestrips all provide elegant solutions to consumer “nuisances.” And P&G is certainly not alone in applying this successful approach. Many companies have learned that emphasis must not be placed on the attributes of the products themselves, but rather on the task the consumer must perform.

2. Identify Non-consumers. Are there pools of consumers currently unable to consume your product due to wealth, training, convenience or accessibility? Oftentimes, a reconfigured product—like 5-hour ENERGY Shots or Minute Clinic—can open entirely new markets for growth.

3. Identify “over-served” consumers. Are there people who would be thrilled with a scaled-down, less powerful, simpler-to-use product or service? As Apple has repeatedly proven, sometimes the best use of technology is to simplify and un-complicate, rather than proliferate options, features and confusion. LegalZoom sprang from the insight that many legal services—from a sublease agreement to trademark registration—were simple and formulaic. The use of high-priced specialists is unnecessary and can be replaced by an intuitive, low-cost online service.

4. Search for consumers using your product or service in unexpected ways. Fast food chains have discovered that commuters, for example, “hire” milkshakes as an ideal in-car breakfast solution. Even a single versatile product (take, for example, baking soda) can inspire decades of successful innovation and growth in multiple categories (e.g., toothpaste, deodorant, laundry detergent and cat litter).

Putting it All Together

In decades of client work and parallel research, there is no indication of one best way to organize a research function. But what is clear is that top performers—leaders of firms delivering consistent innovation successes and organic profitable growth—take great pains to align desired research outcomes with appropriate resources, methods and incentives.

Insights—especially those that result in breakthrough innovation and profitable

Growth—follow hard work, focus and clear process. Insight is the wellspring of innovation and, as such, is fundamentally concerned with identifying what isn’t—not measuring what is.

Actionable insights are much easier to find if you know where to look and how to identify them. Some of the very best ideas are simply hidden in plain sight for CEOs to find.

Source: www.nielsen.com