Why Consumer Market Research is Crucial for Product Development

Tags: Research

consumer market research

Consumer market research taps into six main questions you want to ask for product development: who, what, when, where, why and how. If your company can’t answer all six critical questions pertaining to your product, how can you assume it will resonate with consumers? Making assumptions, rather than conducting consumer market research, will hinder your product development efforts. To successfully bring a product to market, you should invest in consumer market research early and because it is not a “one-and-done” business practice, continually invest in this practice and make a commitment to a larger overall consumer engagement philosophy.

Consumer Market Research Philosophy

Companies may not overtly subscribe to a consumer market research philosophy but, make no mistake, how they approach it speaks volumes about their attitude towards customers. More significantly, their revenues are likely correlated to that dedication. Specifically, companies are either working for or working with consumers. The advent of social media, Internet-enabled access to a global marketplace and disruptive innovation by startups was the trifecta that put consumers firmly in control. This was more than a trend, first recognized over a decade ago by futurist Faith Popcorn and the Brain Reserve, it was a tectonic movement that shifted how companies interact with consumers and delineated which side would be successful – the companies who worked for versus those who worked with – consumers.

Ever since Henry Ford told consumers they “could have whatever color car you want, so long as it’s black”, and up until about 2006 or so when consumers took control, companies were simply working for consumers. Times have changed, with one notable exception: Steve Jobs and Apple. Unmatched in his intellect and vision, he dictated what consumers would want and need in the future without regard for what they thought. Steve Jobs upheld the mindset that consumers wouldn’t know what they wanted until you showed it to them, and consumers couldn’t think about futuristic concepts the way that he could. Steve Jobs, however, was the genius exception, not the rule.

Many people assume that only large companies have the need (and budget to match) to pursue consumer market research. Others subscribe to the self-fulfilling prophecy that most small businesses fail so quickly anyway that they don’t have the luxury or privilege of time to conduct consumer market research and apply the insights gained to their product development efforts. Neither assumption is correct. The Small Business Association (SBA) cites that only 30% of new businesses fail within the first two years, 50% within the first five years, and 66% within the first ten years. However, the most striking finding by the SBA is the #1 reason why businesses fail is that they fail to investigate their market. This is the hallmark of consumer market research – who are your customers, what do they need, want and do, and how do they buy? It follows that, if you work with your consumers and embrace co-creation for product development, you have a high likelihood of succeeding even as a new, small business.

In this era of mobility and 24/7 on-demand access, companies need to connect with consumers the way that consumers demand. Companies that embrace a consumer-centric philosophy in their product development and consumer engagement practices, both of course informed by consumer market research, are out-pacing their competitors by every growth metric. Today’s successful companies work with their consumers. They actively solicit consumer opinions and ideas to shape everything from product and package design and development to messaging and pricing. Which philosophy does your company follow: do you work for or with consumers?

Why Consumer Market Research Matters

There has been tremendous change since the turn of the century. Whole industries, business concepts and how to compete in a global economy have been turned upside down. A few years ago, would you have ever thought that the world’s largest lodging provider would own no buildings? Or the world’s largest personal transportation service would own no cars? Of course not.

This is the power of consumer market research, all the more relevant today with the ongoing shift towards “empowered consumerism”. Consumers are and have been, firmly in control for some time now. However, today’s consumers are also now empowered like never before. In this era of digital democracy, consumers can speak with more than their wallets – they can speak with their voices, too. Negative online reviews, Twitter rants that shame companies demanding a response in real time on a global stage and smartphone video exposés are not only powerful, they don’t go away. A deleted Tweet may no longer be visible within your own account, but make no mistake, there is at least one if not hundreds of digital records that have preserved it.

Empowered consumers know what they want, how and where to look for information about your company and its products, and they are more particular than ever. Plus, they speak to each other – about you. If your philosophies and values aren’t aligned, as good as your product is, your consumers may move along to a competitor who may not offer the same quality that you do, but the consumer still feels better about purchasing that product from a company other than yours. This is increasingly apparent among today’s Millennial consumers. Purpose-driven brands and mindfulness are now critical factors driving buy decisions. Absolutely, pricing, placement, packaging and product quality are all important considerations – but only to one segment of the market – and that may not be your target market audience.

Applying Consumer Market Research to Product Development

Collect the insights from your consumers, tap into what they need and how they expect to use your product. Ask them to evaluate your product. Did you get it right? Do you need to make any adjustments? Has anything changed since you first launched that could influence future versions or adjacent offerings to your product?

Companies can’t assume, even if they got it right when they launched, that their product is still right for their original target audience after it’s been on the market for some time. Things change. People change. The world is dynamic and the people will decide who and what is right. When you incorporate consumer market research into your product development efforts, you mitigate most of the risks associated with a product launch. Not all, but most. Besides, who wants to be the one standing in front of the executives, Board of Trustees after a product fails spectacularly in the market saying, “I assumed that …”

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