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Fast Cars, Not Faster Horses: The Road to Effective Market Research

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Henry Ford once commented that had he asked customers what they wanted, they would have said “a faster horse.”  As Ford knew well, market research can have many pitfalls.

However, market research is an integral part of any business. From the conceptualization stage of a new venture, to a vast expansion effort by a Fortune 500 company, a business is always better off for adhering to the old adage “know thy customer and thy market.” For more mature companies, such research most often plays a role in the process of innovation. Gauging market sentiments helps to identify opportunities to service new customers, better serve existing ones, or revise current business strategies.

So often, though, we see huge corporations spend small fortunes on market research, only to launch new products that fail with epic proportions (remember Crystal Pepsi?). How can it be that after going through highly standardized practices for these investigations that companies come back so far from the mark?

One school of thought suggests that it is not the tools of market research, but rather their misuse, that can send a company down the wrong track. Talking to the wrong customers and asking the wrong questions can be exacerbated by having the wrong members of your team interpret the data. On top of that, there are times where even when presented with the proper research, improper decisions are made. As any or all of these factors can corrupt your research efforts, the process begins to look more and more daunting, with few reassurances that the right decisions and strategies will appear.

In order to combat the problems that result from faulty execution of market research, it is important to take a step back and examine what the goals are of traditional market research. The first, most common experience companies have with market research is typically during their initial business planning efforts. While sometimes for these young firms market research is involved with product or business conceptualization, oftentimes it is more of an after-thought, serving the purposes of a pre-existing business model. That means that many companies can become accustomed to the inappropriate practice of using market research as a justification for what they already intended to do, rather than a tool which can guide their foundational efforts. Once a company develops this bad habit of using market research to show them what they want to see, they are forever trapped in a loop of misusing market research tools, and going about the process the wrong way.

To properly execute on market research, the most important thing you can do is to open your ears. First, this means not engaging your most demanding customers in the process. Yes, you want to do your best to keep this category of client satisfied, but true innovation will result from learning more about your worst customers, or the one’s that don’t exist yet. Looking outside of the box (or in this case, past the evangelist pool) will help you to see the forest for the trees. Next, with Henry Ford's adage in mind, avoid asking questions that directly ask what your existing customers want. This might seem counter-intuitive at times.  However, focusing on creative solutions to a market need will help anchor your research, and the conclusions you will pursue.

 

 


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Dubai apartments says

hello, can i post this article on one of my cars blog please ?
Posted at 6:58 am

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