If every entrepreneur conducted thorough market research before creating a new life-changing invention, they would have abandoned their laboratories and gone back to their boring day jobs – and we would be totally without everyday items like the car.
In a recent article by Mike Murphy, Jeff Bezos is quoted discussing the Amazon Echo. “No customer was asking for Echo,” he says. “This was definitely us wandering. Market research doesn’t help.” No one would have wanted the Echo, just based on the concept, so the whole project would have been scrapped, instead of more than 100 million Alexa-enabled devices active in today’s homes.
So that just begs the question: Is it about IF we should be doing market research, or about HOW we should be using our market research?
What Was Bezos Thinking?
Bezos actually stated that “market research doesn’t help.” That seems a bit over the top, don’t you think? Probably. Market research definitely has its place. Afterall, there’s more to market research than just figuring out if your consumers have an imagination or not. So what was Bezos actually thinking?
He continued his explanation. “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.’”
And that would have been the end of that. Instead, the Echo has become a huge hit, and it’s only getting bigger. It’s estimated that Alexa could generate between $18 billion and $19 billion in total revenue by 2021. And people are eating it up.
Can’t Trust Market Research?
It’s been pragmatically disciplined that thou shalt commit market research before committing to a new product or service. Therefore in an age of the clairvoyant entrepreneur, what could be more alluring than the idea that the consumer could not possibly know what they really want.
The argument against market research is supported by somewhat inductive logic where if you bury your nose too deeply in the data you will suppress your imagination, then ultimately you could just be missing out on the next Echo. After all, people don’t know what they need until they know they need it.
It’s been said that people are often incapable of articulating why they do things or how they predict they would behave in the future. There are just simply too many variables. Human behavior is influenced by so many factors and most of them aren’t conscious or rational. We’re often not even aware of the reasons we do things as we’re doing them. So much of our behavior is governed by non-conscious drivers – way more than we actually think.
Market Research: The Gold Standard
Market research is not a magic solution for every problem but, at a minimum, is a necessary tool for exploring consumer behavior, language, thought processes, and emotions. Traditional market research is still the best way to understand feelings and context that surrounds any purchase.
This work plays a critical role in the process of developing your products and services, bringing them into the marketplace, and marketing them to consumers. It can help you figure out just who your customers are and where they’re coming from – telling you which ones are likely to do business with you. It’ll also show you how these people view your existing business and products, and let you know if you’re meeting your customers’ needs or not.
When you have a new idea for your business (Echo), market research will tell you just how easy a sell it will be to your intended market. Does that mean that when results indicate consumers are not immediately sold, we should abandon the idea?
Nope!
To Research or Not To Research
Many businesses utilize negative results to specify the barriers consumers see in the product, and use that information as key components in developing their marketing strategy by providing a fact-based foundation for rollout, messaging, and price point.
As with most in-market decisions, we use all the information we have to weigh the odds when looking to develop new products to serve the needs of the future. Market research is not an alternative to creativity, it is a tool that helps us sharpen new ideas so they have the best chance of sticking when they hit the market. This way, when consumers just don’t know what they’re missing, we can quickly help them see what they’re missing.
If you build it, they will come . . .