Is market research useless?
Henry Ford is famous for saying: “If I had asked people what they wanted, they would have said faster horses.”
Steve Jobs is famous for saying: “Customers don’t know what they want until we’ve shown them.”
Jeff Bezos was recently quoted saying: “Market research doesn’t help. If you had gone to a customer in 2013 and said ‘Would you like a black, always-on cylinder in your kitchen about the size of a Pringles can that you can talk to and ask questions, that also turns on your lights and plays music?’ I guarantee you they’d have looked at you strangely and said ‘No, thank you.’”
People often read these statements and conclude that “market research is dead.” Startup founders often quote these statements to explain why they don’t do market research. And even some investors rely on these statements as proof that disruptive ideas can only come from visionary founders.
In my opinion, the statements from Ford, Jobs, and Bezos are accurate. When consumers participate in research studies, they struggle with the concept of the “future.” If you ask them to come up with ideas for new products or you ask them to imagine how they will act in a hypothetical future scenario, they have difficulty with the exercise. This is understandable because most research participants are everyday people – cooks, teachers, mechanics, secretaries, gardeners, and so on. These hard-working Americans don’t spend their daily lives reading science fiction, studying business trends, building new products, and thinking about the future. That is not their job. Ask them a question about the past or the present, however, and they have a lot to say. Ask them questions about the future and hypothetical situations and they are often stumped.
So market research shouldn’t be used to generate ideas for new products. Coca-cola shouldn’t sit down with beverage drinkers and ask them: “What flavor should we create next?” And market research shouldn’t be used to predict future behaviors. Tesla shouldn’t sit down with car owners and ask them: “How often would you use a flying car if you owned one?” I think we can all agree that this type of research would be a waste of money. And besides, answering these questions is not the consumer’s job in life. Coming up with new product ideas should be relegated to engineers, product designers, and other people who have received professional training in this area. Expecting consumers to be the visionary for product ideas or future behavior is like expecting a fish to row a boat.
Market research isn’t particularly helpful in these two areas, but that doesn’t mean it is useless. Don’t throw the baby out with the bath water. Most market research is used to observe consumers and understand their current behaviors, beliefs, and pain points. According to the "design thinking" framework, research can be an important first step in the product development journey because it leads to empathy. If Henry Ford studied the daily commute of people in the early 1900’s, he would have seen a lot of frustration with the time it takes to get from A to B. This is a problem that he could solve with the automobile.
In more established categories, market research can be used during the product development process to identify the right combination of features. For example, if you are launching a luxury sedan (such as a Lexus) it is helpful to know whether or not your target audience cares more about premium sound and leather or acceleration speed. Market research can also help you identify areas of diminishing return with respect to product design. For example, consumers who are buying a Lexus may care about ultra-soft leather (which adds $500 to the cost of the car) but they may be indifferent towards luxury, Italian leather (which adds $1,500 to the cost of the car). Understanding these breaking points and pricing sensitivity is extremely valuable during the product development process.
In addition to supporting product development, market research is also used heavily for advertising. There is a science to picking the right message, the right tone, and even the right story for a television, radio, or print advertisement. Let’s say that you are selling the new iPhone X and you want to put up outdoor billboards all over the United States to promote the product. What should the billboards say? Should they talk about the storage capacity? Or the photo quality? Or the high-resolution screen? You only have enough room to talk about one feature or benefit, so what should it be? Should the message be the same nationally or should it vary by region and market? Market research can provide exceptional guidance here when choosing the right message and optimizing for each consumer segment.
Obviously, my opinion on market research is biased. I have spent the last 15 years of my life doing research for a wide range of companies. Sometimes the research was incredibly valuable and other times it was not. Research is hard because understanding consumer behavior is hard. Research rarely produces billion-dollar insights but it does help teams get outside of their own bubble and have more empathy for the customers, consumers, and users they are trying to serve. Research shortens the distance between designer and user in a way that is extremely valuable.
If someone wanted to dismiss market research using one of the quotes from Ford, Jobs, or Bezos, I would remind them with kindness that they are making a generalization and taking the comments out of context. Market research is not valuable in specific situations, but that doesn’t mean it is not valuable in all situations. If you ever want to talk shop about market research, I’m all ears. I don’t think it is perfect, so I would love to hear more about your experience with research. Drop me a line at firstname.lastname@example.org.
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