Uncovering what customers really want, value and will pay for, is a big challenge. Customers are in the main, unable to correctly predict what they might actually buy. Many examples exist where companies have asked customers what they want, given it to them then regretted it when the customers failed to deliver on their predictions.
There appears to be poor alignment between what they think they might do and what they actually end up doing.
The McLean burger, low-fat KFC skinless chicken and New Coke are all examples of new products from some of the world’s biggest companies that failed commercially, in spite of testing well using traditional market research including surveys and focus groups. These are all examples that Kasocio Senior Partner, Philip Graves, uses to highlight the flaws in interpreting traditional market research where consumers are asked questions about their preferences and from this forecasts are made on future buying behaviour.
In an article published in the Financial Times on 5th June 2015, Philip suggests that the market research industry should have used “better” techniques to get past the rational conscious mind, and understand “the effect of the [Coke] logo on your emotions, the memories of summer evenings when you were a teenager, the shape of the bottle, the music from the ads.” These deeper unconsciously processed thoughts (or reactions) are largely ignored by the traditional market research methods that focus on blind taste tests.
Just before the recent UK General Election, a robustly selected sample of people, representing the population as a whole, when polled said they were going to behave and vote in a particular way. However, when voting actually occurred it was clear that the population as a whole behaved in a way that was different to that predicted. In this particular case, perhaps not enough rigour had gone into sampling. Or perhaps, the voters sampled were dishonest about their true intentions. Or, most interestingly, they might have been unaware of what their true intentions were, because, invariably, people’s true intentions exist outside of their conscious rational minds.
In his book Consumer.ology: The Truth about Consumers and the Psychology of Shopping, Philip writes: “The fundamental tenet of market research is that you can ask people questions and that what they tell you in response will be true. And yet . . . this is a largely baseless belief.” Philip suggests there is a simple, clear and obvious reason for this. “The unconscious mind is the real driver of consumer behaviour.” Put another way, there is no point in asking people what they want, or what they are going to do, because they themselves don’t know.
The above suggests that traditional market research is too inadequate and blunt a tool for predicting future buying behaviour and using this to create new product innovations. A Booz, Allen and Hamilton study on the subject of new products found that “Bad estimates of market potential (or other marketing research mistakes)” were a major cause of new product failure. Clearly, what people say they want (and do) should not be the only deciding factor in creating new product innovations. Given that companies are (presumably) only taking forward initiatives that they believe have merit based on their broader experience, the overall failure rate suggests that traditional research is no better a delineator of potential success than a coin toss. When one considers the complete disregard traditional market research techniques have for the unconscious mind, and the extent to which psychologists believe it is an important determinant of behaviour, this should not come as a surprise.
Kasocio’s opinion about traditional methods of market research is that they are often incorrectly interpreted and can frequently drive wrong decisions. We believe that asking customers what they think they will do in the future, or why they behaved as they did in the past, is a dangerously flawed way of actually predicting their behaviour, which means focus groups and surveys can be perilously misleading. With no evidence to justify basing decisions on such traditional market research methods, we believe that market research practice needs to adapt and take into account the evidence from psychology about how people think. One day in the not too distant future, we may all look in the rear view mirror at the way it used to be done and shake our heads in disbelief at how naive we once were.
But if you can’t build innovations based on what customers tell us, what can you do? You look at where advances in behavioural science, psychology and neuroscience research have taken us; Behavioural Economics.
Download the PDF here: You Can’t Build Innovations On The Back Of what Your Customers Tell You