The Pivotal Role of Customer Research
Opening reference: Canada Firsts by Ralph Nader (1993)
Observation: Canadians excellent at generating new ideas and technologies. However, Canadians are not good at marketing our ideas.
The Customer’s needs
Some of Marketing’s greatest mistakes:
- Customers will tell us about the products they need
- Customers can help us solve our problems
However, “Customers think about their business”. It’s up to Product Managers to solve problems.
“Research doesn’t give answers. Research (only) gives insight to what’s on people’s minds.”
“Research gives insight. Research does not make decisions.”
Product: Core benefit + augmented benefit + extended benefits (services, expectations, etc.) [See slide].
Illustration: Boeing (and other companies (but not Airbus)), sell airplanes at: 50% on order, 50% on delivery.
Airbus recognized a need for customers to see an early ROI. Hence Airbus charged: 33% on order, 33% on delivery, 33% after 6 months. This gave customers added incentive to buy Airbus.
Moral: We are in the business of producing benefits, not products!
Requirement: We need to deliver relevant (for the target group) differentiation for new products.
Moral: Don’t let R&D (or Sales!) set product details.
Observation: We under-estimate competitive response.
Observation: Most (All?) organizations are really only good at one or two things (Moral: Stick to your competencies!)
Observation: 6 months window on new ideas before competition takes over (even less in High-tech)
Strong Observation: Cross-functional teams strongest in developing ideas (R&D, mktg., accounting, differing personality types, genders, etc.)
(Financial) Stamina required to get a product to market (this is an area where a smaller group has a disadvantage)
Talking to Customers
Identify what’s on their minds.
Be ordered: creative at the right time, structured at the right time: 1st stage of secondary research
- understand the problems of the customer then do the Concept Testing, and do it Simply (be able to describe the problem/solution in simple language)
- do research with cross-functional groups (often the noisy/irritating ones are the ones who ask the best questions!)
Important to identify when people feel connected to the result or the process
Trends:
Watch the trends of the world: demographics, attitudes, technology, etc. This is input into where the world will be in the future.
Analysts;
Observation: Analysts not closely connected to the reality of day-to-day activities; usually focused on the extrapolation of statistics; be cautious of forecasts.
New Product Development Overview
- need to anticipate the future
Analogy: Shooting ducks: don’t shot where the ducks are… shoot where they will be!
Mantra: Customers want to do their jobs: Faster, Cheaper, Simpler.
New product should easily map to this mantra for customers.
Take cue from customer statements beginning: “I wish…”. These are insights from the customers.
In other words, don’t ask the customers what they’re doing now, but ask them where they’re going, and work with the customers. Ask the customers what their problems are.
Look at the use of competitive products, or competitive ways of solving a problem. Watch how people do things.
However, also a good idea to watch people closely in their tasks. People like other people to have an interest in their activities, and they like to think that other people want to help.
During research, question intently to find out what is wrong, what people’s problems are.
Creative vs. Rigor
There is a time for being Creative, and for having rigor in procedures - don’t confuse them!
- Be creative at the beginning of the product cycle.
- Use rigor to get the product to market (no creeping featurism, delays, etc.)
The StageGate process helps reduce creeping commitment
Focus on convenience
Give customers the chance to rate features in order of importance, not just how much they like them. This gets a more realistic assessment.
Keep customers away from discussing an idea, instead, direct them to how they would use the idea. Therefore ask “chatty” questions: What would you like it to? What would you tell a friend about this product idea? Clarify all customer statements.
Keep the discussion positive – ask only positive questions: What’s good for you? How could this help you?
Ask: How do you do this at present? What are your costs?
Concept Testing
Will the product allow the customer to solve a problem?
Keep statement of the problem simple (real simple!); keep statement of the solution real simple too!
Be careful of “a positive response” from a customer. Beware of the person telling you what you want to hear. Don’t cheat yourself if results are not VERY enthusiastic all the way through.
Ask the customer to co-invent with you; what would the customer like to do; what factors are most important; ask the customer how they would improve the product.
Get the product into people’s hands ASAP – Pay attention to the results!
Watch how people really use the product in real life!
Pricing
Understand what people are doing now and how much they’re paying to do it. But beware of real cost vs. perceived cost or actual cost to the person/department. If the total cost of what the customer is doing is not completely in his/her budget, then you are less likely to get buy-in.
If you do need a big change to a customer’s organization to truly save enterprise-wide expenses, talk to the CEO!
Test Marketing: It’s obsolete!
Takes too long, and tells your competition what you’re doing.
