Pulp Innovation Chapter LXXIV: Gaining More Customer Insight

By: Jeffrey Phillips

Marlowe and his team-mates sit down with an endless stack of customer satisfaction surveys and market research, however none of the documents paint the full picture they’re looking for. The reports explain a lot about what existing customers think about existing products, but they don’t shed much light on their unmet needs. So the team starts to draft a proposal for ethnographic or qualitative research that will help uncover beneficial insights.

It’s a point of honor with me to meet my clients, and in turn to meet my clients’ customers and prospects.  I’ve found, time and time again, if I rely on what my clients tell me about the markets they serve and the customers they have, that I’ll only get a part of the story.  Far too many product managers, line of business owners and other executives rely on industry analyst reports and sales numbers to tell them what their customers want or need.  In one recent client I discovered that none of the product managers had interacted with an actual, live customer in the wild for over a year.  They didn’t think they needed to, with all of the reports and surveys that they had.

Don’t laugh.  This problem is endemic.  As firms grow larger and more complex, and product cycles increase, it becomes more and more important to get the “right” information to understand what to design, build and deliver.  And, increasingly, that “right” information is subcontracted from any number of market research organizations, analyst reports and satisfaction surveys.  I understand why this is the case.  There are at least two good reasons to rely on this kind of information.  First, it appears valid because it is statistical.  We’ve all knelt down at the altar of statistical science.  Quantifiable numbers are meaningful, so we’ve been taught.  While we may not be sure the right questions are being asked, we can be completely confident in the results.  Second, we’re buying insight from experts!  How can that possibly be a bad thing to do?  What we’ve failed to realize, or just conveniently forgotten, is that every analyst firm has some inherent bias in its data.  The important thing to understand is where the bias lies and what that means to our interpretation of the data.

So, as any gumshoe innovation consultant can tell you, as the product development stakes increase, most firms are spending more and more dollars on more and more reports and surveys of their customers, while spending less and less time actually interacting with those customers and potential prospects.  Accipiter was no exception.

Meredith and I met with Gregg to talk about gaining more customer insight, which was a key part of our innovation methodology.  Gregg came prepared with a three inch stack of industry reports, commissioned market research, financial analyst reports and more information on dead trees than we could possibly consume in the next lifetime.  All of it statistically significant, and some of it possibly correct.  But none of it painted the full picture I thought we’d need.

Gregg pushed a large stack of customer satisfaction surveys and some market research toward us.

“Here’s the latest that we have.  I asked Sally to pull everything we have on the aerospace market and the anticipated needs in that space.  We’ve got a tremendous amount of customer satisfaction data from our existing customers, and a number of market research reports.”

I thumbed through a couple while Meredith studied one report on the needs of the aerospace industry through 2015.

“You understand” I said “ that customer surveys aren’t really insightful for an innovation effort.”

“You’ve said that before, but I need to understand why.  It will be hard to justify new market research when we have so much data here before us.  What insights do you need that we don’t have in these reports?”

Meredith spoke up, and I was happy to let her take the lead.  This was her specialty, and why we hired her.

“Customer surveys tell us a lot about what existing customers think about existing products, but they don’t shed much light on their unmet needs.  You can’t really create a good survey on unmet needs.  If you think about the insights we want for this project, we want to understand the needs that existing customers have that aren’t being met.  Additionally, we want to understand the needs of prospects that don’t currently buy from you, which also aren’t incorporated in these surveys.”

“OK, so we place far less emphasis on the surveys.  That still leaves the market research and analyst reports.”

“And I’m not suggesting that we ignore them, but that we place the proper emphasis on these reports.  I’m familiar with several of these firms, and they do good work.  It’s just that most of these reports weren’t conceived to solve the needs of Accipiter Aerospace in three to five years.  They are far too general to be relied on too heavily.”

We knew it, and deep down he knew it too.  Even Sally, who was responsible for market research for the aerospace group, knew it, and she reluctantly agreed.

“Meredith, you’re correct.  We have deep understanding about our existing customers and their satisfaction with our current products.  But that doesn’t really start to answer what they will need in the future.  We’ve suggested several times that Accipiter conduct some ethnographic or qualitative research in specific market segments, but those proposals have been shot down at corporate.”

“Why were they shot down?”

“Mostly because there’s a bias toward customer surveys and quantitative results.  You know, and I know, that qualitative research is still a relatively new technique.  So the combination of new techniques that generate information that may not be statistically significant has been viewed as suspect.”

Well, this was certainly nothing new.  Every tool or technique we’d introduced so far had been met with resistance.  But I felt we had the backing we needed to get the insights we felt were important to better innovation, so I pushed in on the conversation.

“Sally, Gregg, I know that it’s hard to argue for more research on top of what you already have, but we’re going to need to make that argument.  We can conduct a well-conceived research program” here I looked at Meredith, who nodded her agreement “ that gives us what will be the most beneficial insights for the aerospace innovation work.  I think we have the buy-in with George Brockwell that he will OK the costs, and even help us sell it to the CMO.”

Sally shifted a bit uncomfortably, but Gregg didn’t flinch.

“Meredith, can you work with Sally to document a proposal for some ethnographic or qualitative research that will help us uncover unmet needs, while Sam and I think through how to present it up the chain to ensure we can move quickly on the research?”

“Of course.”  And with that, Sally and Meredith moved off to Sally’s cube to get started.

Gregg looked at me, and I knew what was coming.

“You’ve got more credibility with George and Angus than I have at this point” he said “so it’s up to you to sell this to them.  Do you know how you are going to do it?”

“Sure.  We’ll start with my favorite Henry Ford quotation.”

“Which is?”

“Ford was asked if he had worked with his customers to design the Model T. His response was ‘if I had asked my customers what they wanted, they would have said a faster horse’.  If we rely on the research we have, we’ll devise the equivalent of an aerospace ‘faster horse’, when what they really need is the analogy of the automobile.  And to get that insight, we need to do things a little bit differently.  Just like the rest of this project.”

He seemed satisfied with that answer.  If only the executives were so easy to please.

By Jeffrey Phillips