The Four Best (and Worst) Uses of Market Research
In an informal poll of top executives the single biggest obstacle to successful innovation was, “actionable insights.” Yet every year companies spend billions of dollars in search of “actionable insights” only to come up empty-handed. To add insult to injury, in many categories, breakthrough innovations are launched by unproven upstarts, begging the question: How is it that small teams with modest resources and limited industry experience are repeatedly able to win the innovation contest?
April 9 2013 by Taddy Hall
Experience and research suggest that CEOs of many companies 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 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 is 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.