BEST OF THE BLOGS: Why market research is a waste of money

This week, sales expert Sue Barrett questioned the value of using market research as the basis of product design, especially in industries such as information technology.

Barrett argues that if you ask consumers to describe the products that they want to buy, in many cases they will describe a variation of the status quo. However, consumers won’t ask for products based on disruptive technologies they’re unfamiliar with:

Do not ask customers what they want when it comes to creating and introducing new technology and innovations.

Why? Because according to leading voice on innovation, Scott Anthony, managing director of Innosight Asia Pacific, ‘customers… cannot tell you what they want in terms of new technology, especially disruptive technology, until it is in front of them’. If you don’t know what you don’t know, how can you know what you want?

While Barrett’s view might be controversial with some, it is a view that was supported by one of the most successful technologists of all time, Apple co-founder Steve Jobs:

A great example of someone who comprehended the importance of understanding his customer was Apple co-founder Steve Jobs. He believed that market research into new innovation was a waste of time and money.

Steve Jobs famously said: ‘If you ask someone what they want, when they have no idea of new innovation, they will use their present paradigm as the benchmark. The result will be an adaptation of what already exists, rather than new concepts.’

However, if traditional market research techniques should be kicked to the kerb, what should take their place? According to Barrett, the secret is to discover what your customers’ needs are, and then design products that fulfil those needs:

Jobs preferred meeting with customers, talking to them about what they used computers for and how they spent time. The result of these discussions and observations, without any market research, was the iPod, iPhone and iPad – all innovations that have revolutionised the world and the way things are done.

The sweet taste of success

Meanwhile, branding expert Katharina Kuehn examined why chocolate advertisements are so successful in tempting us to buy ourselves a sweet treat, often against our better judgement.

According to Kuehn, chocolatiers have long ago learnt the value of tapping into the subconscious triggers of our emotional operating system:

The emotional operating system is the power centre of decision making in the human brain, through which all stimuli (advertisement, promotion, retail experience, product etc.) are filtered. It is where we determine what is noise, what is relevant and whether and how we want to react.

In the blog, Kuehn examines the subconscious stimuli used by Cadbury, Ferrero and Arnott’s, and the emotional responses that are triggered as a result.

In the case of Ferrero, for example, the subconscious hook is sophistication and luxury, which taps into an emotional desire for status:

When we look at Ferrero Rocher’s Golden Moments television commercial, it is packed with signals of status and exclusivity which originate from the dominance dimension of the brain.

The quality golden packaging of the product, the consistent tone of voice and the imagery i.e. divine festivities, heaven, golden moments, the gods, all underpin this message. Ferrero Rocher reach this emotional dimension of the brain with sophisticated ambience, highest quality product and very importantly, luxurious packaging.

When print met digital

Under pressure from the internet, the media sector has been far less successful than the chocolatiers in getting consumers to part with their cash over recent years.

Online strategy expert Richard Parker says the media sector needs a radical rethink of its strategy if it is to survive online:

[The] path to a new dawn in publishing which involves wiping the slate clean of all of the traditional publishing technologies and techniques that we are used to – forgetting everything we know. Instead, we should start from scratch based on the new reality which requires a focus on digital media and simplicity.

Parker encourages media companies to experiment with the business models used by online publications such as The Magazine:

The Magazine (which is excellent, incidentally) doesn’t try to replicate the print paradigm. Nor does it seek even compete with the existing massed ranks of technology blogs and the content that they produce.

Instead, you get four or five high quality articles every couple of weeks in return for a small subscription price.

According to Parker, part of the solution is for media companies to embrace a far more open publishing model, based on a technology known as APIs, or Application Programming Interfaces.

Unfortunately, many media firms are reluctant to embrace this technology:

An API allows publishers to open up the data behind their websites up to external resources and expertise (developers etc) tapping into digital talent lacking within their businesses, and therefore enabling them to innovate faster and distribute better, providing users with a much richer digital experience. A win win, right?

You would think so. Yet only four global news publishers (The Guardian, The New York Times, USA Today and NPR) had an API as of January 2012, and only one magazine, (Nature) seems to be embracing this opportunity.

If Parker’s argument is correct, the media will have to be far more open and innovative if it is to survive in a digital world.