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This guide shows how markets work and how prospective clients think. It delivers business wisdom aimed at keeping clients by utilising the keys to modern marketing - price, brand, packaging and relationships.
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This guide shows how markets work and how prospective clients think. It delivers business wisdom aimed at keeping clients by utilising the keys to modern marketing - price, brand, packaging and relationships.
This question is so fundamental that an entire branch of philosophy, epistemology, has evolved around it. What is knowledge? And how can you know that your plan will work?
You can't. In this time when even great physicists-indeed, especially great physicists-are wracked with doubt, total certainty signals foolishness-in fact, certainty can be fatal.
Too easily, we decide that other people are like us. We project our own desires and attitudes onto entire markets. We trust our observations. But often what we believe we see is not really there.
You can find powerful evidence of this phenomenon in courts of law. Every day, eyewitnesses to crime testify, offering their observations with assurance, and we trust them. When we read "An eyewitness identified John Doe as the assailant," then learn John Doe was found innocent, we are alarmed. We scream, "Reform the justice system." We think nothing could be more reliable than an eyewitness. What we should reform, however, is our view of eyewitnesses and our faith in human perception.
To shake your own faith in your own perception, read Jon Krakauer's best-seller Into Thin Air. (Given how many copies of the book have been sold, perhaps I should say "reread.") At one point, Krakauer interviewed three participants about a key moment in that fatal attempt to ascend Mount Everest. From those three people, you would expect that the real facts would emerge. Something else emerged instead: a reminder of our frailty. The three could not agree on the time of the event. Nor could they agree on precisely, or even approximately, what was said. And none agreed on who else was present at the time!
In the immortal words of Firesign Theater, "What is reality?" Lily Tomlin may have answered that best in her solo stage show The Search for Signs of Intelligent Life in the Universe, written by Jane Wagner. "After all," Tomlin's bag lady character muses, "what is reality anyway? Nothin' but a collective hunch."
Tomlin may have exaggerated, but the successful marketer should question virtually everything-especially her own observations. The brilliant marketer acts with humble openness. She willingly believes she may be wrong, accepts other ways of thinking, and recognizes that prospects may think much differently than she does.
Still, we cling to the faith that the answers are out there, waiting for research ingenious enough to find them.
Certainty is fatal.
The Unreliable Subject But research may be one of our weakest tools. Take two examples, one older, one recent.
One fall day in 1962, my mother received a call from Phoenix, Arizona. The world was smaller then, and a call to us in Neah-Kah-Nie, Oregon (population 123), from anyplace more distant than Portland was an event. The caller was from the A.C. Nielsen Company, the people who measure TV audiences and issue the ratings. They wanted us to be a Nielsen family.
My mother happily obliged the exotic caller. Several days later, we received a detailed pamphlet that looked like a day planner, with instructions on how to fill out the TV diary. We were asked to watch whichever shows we normally watched and record how many people were watching the show during each fifteen-minute interval.
Being a competitive and goal-oriented bunch, we Beckwiths were eager to be among the best Nielsen families ever. We painstakingly filled out each line of the diary, quarter-hour segment by quarter-hour segment, with the names of the shows that we watched. There was only one problem.
These weren't the shows we normally watched. Yes, we did watch our usual shows, like The Defenders. But if there was a time slot during which we normally watched nothing, then-anxious to be conscientious television watchers, especially of the "better" programs-we would watch whatever looked best. And so during those two weeks in the fall of 1962, the Beckwiths of Neah-Kah-Nie, Oregon, watched at least ten TV shows we'd never watched before, and never watched again. Programs, we suspect, that looked awfully good in the ratings that year.
What were we doing? We were letting the fact we were being observed influence what we did. We were not being who we were, but who we wanted to appear to be under the circumstances-which in our case was a family who watched quality television.
People who know they are being studied change what they do.
In 1999, Starbucks wanted to know what its customers thought. So the company commissioned researchers to question them in person, on the spot. Many readers have already detected the flaw in this research design. If on behalf of a host you ask party guests their opinions of the party, they will gush.
Granted, the people behind the counter at Starbucks are not party hosts. But they are hosts, and they are standing near the guests, whom they have just earnestly served a warm latte, trying their best. As a guest, will you tell the researchers that your latte is merely good, the earnest girl's service only adequate, and the store ambience acceptable but in need of work?
As the person behind the counter, you know you are being observed. How does that affect you? Do you act normally? Are you providing a truly representative experience?
These two examples illustrate a basic rule of research: Research changes its own results. Natural scientists originally observed this phenomenon, and the first discoverer gave it his name: the Heisenberg uncertainty principle. But in the realm of the natural sciences, at least some basic rules like gravity, relativity, and the laws of thermodynamics are at work; if a researcher can affect the relationships among protons and neutrons, what does this tell us about the validity of research into people's attitudes and behaviors?
It tells us that research alters those apparent attitudes and behaviors. This phenomenon explains another regularly observed occurrence. Researchers tend to find what they are looking for. Again, natural scientists have noticed this in their own research; they call this phenomenon "the participative universe." Physicist John Wheeler Archibald observed that when you look for particular information, you tend to find it. You lose your ability to see other information, or to reach other conclusions-especially contradictory information or conclusions.
We learn what we hoped to.
This has profound meaning when we think about marketing "research." It tells us that our "research," rather than illuminating new data for us, simply hardens our biases and convictions. And so with shocking frequency, this result emerges from our "research":
Research does not expose the truth; it blinds us to it. Seek understanding but beware of research.
Data Misleads An imaginary scene in Burbank, California, 1952.
Eight representatives are waiting patiently in a small room that has what they do not realize is a one-way mirror on one wall. Finally a young man arrives-the facilitator for their discussion. He engages them in some ice-breaking questions, then poses the question of that day:
"Imagine an enormous park. In the center, picture a four-story medieval castle with turrets, painted a soft blue. Leading up to the castle, imagine a wide street with stores on either side; imagine a perfect small American town in 1915-except that these stores are immaculate, freshly painted, and about two-thirds the size of a normal building.
"As you walk down the street, people in Goofy and Mickey Mouse costumes walk up to you and greet you happily. In various parts of the park, you find a ride through a jungle, a submarine trip, cars that race around a track, and other rides.
"Would you be interested in such a park? "Would you fly two thousand miles to visit it?
"Would you pay a hundred dollars a day for your family to visit it?" Almost certainly, the answers to those three questions would have been maybe, no, and absolutely not. And Disneyland and Disney World might never have been built. This kind of research-the kind that asks the questions you might well ask-is plagued by three insurmountable problems.
First, the questions it asks are hypothetical, and life is real. We spend our hypothetical time and money in a much different way than how we spend real time and money. What we actually do is often nothing like what we said we might do. The second problem with "Would you like this?" research is that what you describe and what you deliver are not the same thing. The hypothetical Disney researcher's word picture, vivid though it was, couldn't adequately capture Uncle Walt's vision.
The final problem is the one this tale of Disney suggests most vividly. The more innovative your idea, the smaller the number of people who will understand it-and people have great trouble imagining that they will buy something they cannot understand.
Another example: Picture yourself trying to explain the personal computer and then asking your listeners if they would be interested in one. Only that tiny sliver of the population known as Innovators would say yes. Everyone else would say no. (In fact, in the early stages of most innovative products and services, almost everyone does say no, making "no" a not very meaningful survey answer.) Even more important, the more innovative the idea, the more uncomfortable most people feel about it. Truly new ideas make people uneasy. When Fred Smith trotted his idea for Federal Express by his experienced and intelligent business professors, they thought it would never fly; Federal Express was too different. You can see the pattern: The more innovative the idea, the less likely it is to survive this kind of scrutiny. And yet the more innovative the idea, the greater the potential success.
Research supports mediocre ideas and kills great ones.
The Case for Soft Evidence The proposal to introduce healthy, low-calorie chicken at Kentucky Fried Chicken in the late 1990s has just been presented.
"Fine," the executive responds. "But where's the evidence?"
So the presenter offers some anecdotal-often called "soft"-evidence. First, the presenter has just returned from a trip to Miami. On the flight down, he sat beside the director of food services for one of the world's leading cruise lines. After some nice ice-breaking, the food director revealed the American attitude toward food. "In America, it's all about quantity. Forget good. Give them plenty. Is it any wonder the French look like dancers and Americans look like Jabba the Hut?"
Second, the presenter notes that virtually everyone-even among the college-educated, most health-conscious portion of America's population-in every American restaurant orders the high-calorie items.
Third, the presenter mentions the January 3 Phenomenon. This is the annual explosion of health club attendance during the first full week after the Christmas holidays. By February 1, however, attendance is back to its quiet normal. All those newly committed health fanatics have abandoned their commitment and returned to lunch-a big, fried lunch.
That summarizes just some of the anecdotal evidence that would discourage a fast-food executive from introducing low-fat, low-calorie chicken.
Here was the hard evidence. The executives at KFC, like their counterparts at Pizza Hut and McDonald's, had commissioned exhaustive focus group studies, which seemed to offer incontrovertible evidence that people loved low-fat, low-calorie, skinless chicken, just as they said they liked low-fat pizza and the McLean sandwich. This "hard" research clearly showed that people would buy those items.
As the fast-food executive, which evidence do you rely on? The hard evidence, of course. The anecdotes are mere stories. They are literature; the research is science.
As most readers have guessed, the product tanked. The executives had demonstrated an overlooked fact of marketing life: Hard evidence is actually the worst evidence.
Hard evidence is more dangerous because its apparent scientific-ness seduces people into relying on it. Executives then make decisions that common sense informed by anecdotal evidence would have talked them out of. Anecdotal evidence is reliable because it emerges from the real world. Hard evidence emerges from artificial, laboratory situations such as focus groups. The Heisenberg principle reminds us that these laboratory situations are inherently flawed because people who are being observed change their behavior-and their opinions-as the result of being observed. They do not give the answers that reflect their true opinions. They give the answers that reflect best on them-answers like "Yes, I do like healthy foods and would definitely buy these."
Ignore hard evidence. Soft evidence is much more reliable. Lessons from Politics One of the reasons "research" produces so much information of so little value can be found in the deep recesses of your own mind.
Do you know exactly who you are?
Do you know just what you would do in any given circumstance? Do you always act consistently with your beliefs?
Do you do things that surprise you? That disappoint you? That you wish you hadn't?
Are you always the person you wish you could be?
The answer to all of these questions, of course, is no. And yet most market research assumes the answer to these questions is yes.
We want people to think we are health-conscious. So we tell researchers we would buy light burgers, light pizza, and light fried chicken. Then, as McDonald's, Pizza Hut, and KFC have learned, we don't.
In 1979, most people wanted others to think they were generous, liberal, and compassionate. So they told pollsters they were voting for the liberal candidate, Jimmy Carter, rather than that old friend of the rich, Ronald Reagan. And then they voted for Reagan: The voters told researchers one thing, then did another.
We do not know ourselves. We do not act as we think we might. We are often not the person we pretend to be, or want to be. And so we are not who the researchers think we are-and we do not do what research says we will. Beware of research. People make terrible guinea pigs.
What Price Insight? Working with a large West Coast-based retailer on a new name for its in-store services, the branding and naming firm finally had it-or so it hoped. The firm's list was made up of six finalists, two semifinalists, and their winner: the name that met all their criteria for an outstanding name. Rather than merely trust their judgment, however, the branding firm's executives called on a group of consumers to affirm it. The group was not representative; the thirteen consumers lived in a large Midwestern city, and had more education and earned far more than the retailer's prospects did. Nevertheless, the branding firm believed that this group was "normal" in statistical terms. Its responses to the name were likely to be very much like the bulk of responses in a truly representative sample.
The thirteen consumers agreed with the branding firm's recommendations, and gave their reasons why, as well as their reasons for not preferring the alternative names.
The retailer, however, had one other key audience to satisfy: its board of directors. The retailer's executives could not bring themselves to tell the board that they were recommending a multimillion-dollar name change on the basis of one measly thirteen-person focus group.
So the retailer commissioned a multi-state research project. Researchers interviewed over 350 people who matched the profile of its primary customers. The researchers reached a startling conclusion:
The same conclusion that the branding firm and its thirteen-person sample reached.
This finding merely confirms what marketing information-gatherers learn-or should. Five hundred people usually will lead you to the same conclusion that fifteen do. And, as necessary as they may be to placate boards of directors or to comfort top executives, large representative groups of "average" people do not offer particularly good information, because average people are only average. You do not want average information; you want exceptional insight.
Let's take a very specific professional service as an example: a sports medicine clinic. If you wanted to expand your sports medicine practice, whom should you talk to: hundreds of representative prospects-or a few uniquely insightful and influential ones? Let's say it's 1978, perhaps the peak of the running boom in America. Who could tellyou the most that would help you the most?
It isn't the representative prospect on the street. It's the very influential top runners. They are true athletes, and therefore the most apt to use-and to need to use-sports medicine services. In addition, being committed-arguably, even fanatical-runners, they simply have thought more about the subject of their injuries and their frustrations with conventional treatments and conventional practitioners. They have studied the problem; in some cases, they have insights that the people operating the clinics do not.
Perhaps more important, these top runners are their market's Key Opinion Leaders. When these impossibly lean and improbably fast runners started wearing Casio watches and New Zealand split running shorts and rubbing Vaseline on their nipples before races longer than ten miles, the sales of all these products skyrocketed. The bulk of the market simply watched and followed the Key Opinion Leaders-as many markets do.
So at least two key principles emerge from the retailer's testing: (1) A little information-gathering will usually produce the same insights much faster and cheaper than an exhaustive study will. (2) Before you try to survey a representative sample, ask yourself: Just how valuable is representative information-isn't what you really need uniquely insightful information, from the people who lead the markets and influence them? Beware who you survey-and how many.
The Second Twenty Minutes A Fortune 500 company's CEO and I are chatting in a bar in Snowmass, Colorado. Our first twenty minutes proceed the way most ice-breakers proceed. We dance around some pleasantries, get comfortable, decide whether we should pursue a real conversation. Two glasses of scotch enter the frame, and are soon replaced by two more.
After about twenty minutes, the conversation changes. It deepens. And the depths it is heading for are the depths of real truth. At the outset, his sounded like just another successful and well-run company, growing nicely and pleasing its shareholders. But in time, we get to his reservations, his fears, his real view of his company and the market. We have moved beyond the press releases and the bluster, and have arrived, slowly and awkwardly, at the truth. This exchange has significant implications for anyone who markets a service. This experience explains the best response to the question, "Where can we find the insights into this market that will help us make the best possible decisions?"
The best answer is, "In the second twenty minutes." You find the key insights you need-after your own, which are the most critical-in the mind of your market's key observers and prospects. But they do not readily volunteer those insights. Often, they do not even arrive at them until they have entered a discussion in which they say one thing, then another, then piece the two together into something new. And they do not offer these easily-indeed, they rarely offer them at all-to someone they don't feel comfortable with.
During the first twenty minutes, these people have their guard and inhibitions up. Perhaps their biggest inhibition can be explained by a variation on the Heisenberg principle, the principle that says the mere fact of being observed changes behavior. A person being interviewed or sounded out feels exposed. The environment feels unnatural, the circumstances unusual; he feels pressured to perform, to sound intelligent, which in turn often creates the pressure to not say what he really thinks. But people with some success in this kind of discussion notice a transformation over time. The subject gradually forgets the setting and her initial inhibitions, becomes more comfortable with her inquisitor and the topic. As ideas begin to form, she grows more interested in the ideas and more oblivious to the setting. And so, with time there is truth.
Organized research, or certainly formal research, will not help you arrive at these insights. You need conversations in which your subjects feel comfortable, in which they lose sight of the fact that this might be research. Don't research; listen.
On the Outside Looking In Professional outsiders offer at least one indispensable asset: their ignorance. They haven't yet learned what works in your business and what doesn't; why your business uses one set of processes and not another; or why you view turnover as good, for example, when someone with less information might think it's bad. The contrast between the outsider and the insider, and the value of the outsider, reflects a basic truth: The closer we get to something, the less clearly we can see it.
An outsider holds the page at arm's length, and sees it as the market will see it. The letters get clearer. And the reader knows what he's reading, rather than what the author intended to convey.
We run our businesses as a succession of follies interrupted, we hope, by moments of brilliance or at least long stretches of competence. But in varying degrees, we do commit follies. We fail to see them because no one tells us, because we don't want to see them, and because business seems to be perking along.
Our greatest leverage lies not in polishing the areas where we shine most, but in addressing our areas of folly.
The story of the emperor's new clothes seems apt here. The emperor paraded naked through the streets, believing himself to be dressed in magical new finery, and no one said a thing. The town elders, experienced in these things and familiar with the ways of emperors, proclaimed the nonexistent clothes beautiful. Enter the most naive of them all, a young boy who had never observed emperors before. He saw no clothes at all-and said so. He reacted honestly because only he was uninhibited by experience and familiarity.
You need to take not just a wise look at your business, but a naive one. You want someone who will clearly see the folly that you and others too close to the business are missing. You need someone who sees what they truly see, instead of what they think you want them to see. You need to stop, pull back, look, and have an outsider help you look.
Find a boy to tell you what your emperor is wearing.
(c) 2000 by Harry Beckwith"
Posted September 19, 2009
Would not recommend. Some of the concepts were engaging, but nothing was new and they were presented randomly. I have read many other books on the subject that were more compelling.Was this review helpful? Yes NoThank you for your feedback. Report this reviewThank you, this review has been flagged.