A Product Development Expert Explains How to Avoid Pitfalls of Market Research
Published by Catalant at gocatalant.com
Most people in the product development and marketing world aim to do the right thing by their customers. They want to create the best product for the right customer, then watch as the product adoption or share gains materialize.
Before a business can realize these gains, however, teams must define the right product for the right set of customers’ needs and have a clear focus to address these needs. Historically, one of the top R&D and product development challenges is prioritizing innovative ideas and products. The root cause of this particular challenge is lack of strategic alignment and common objectives.
Aligning your team around a common understanding and driving clear priorities to achieve that end is key. While it's not unusual to use market research to achieve this understanding, it's important to avoid common pitfalls along the way to maximize your investment in your product. Talking to the right set of customers will provide you with a broad perspective of your customers’ needs. Listening to shifting customer needs will help you move in the right direction. Using the results of research, your development team can challenge previous assumptions about your product use, focus on the real issues at hand and evolve the product design to address the real-world needs.
Too often product development leaders and marketers get pulled into the notion that key opinion leaders (KOLs) have the best perspective on the products and trends in their target market. Reflecting on the following questions can help your business circumvent a major pitfall of market research and identify the focus you need to align your team’s objectives.
How many potential customers do you have?
What percent of them are current customers?
What percent of them are KOLs or drive real change in your industry?
Of all the customers you have spoken to, how many are KOLs?
While it may be difficult to count the number of KOLs in your industry — definitions vary from sector to sector — your KOLs should represent the top echelon of customers. These are the super users that use your products and maybe also competitive products who publish in journals or talk about their experiences with your products at national and international conferences and, therefore, influence the behaviors of others in the field. Looking across your sector, are 5 percent of your total customers KOLs? 10 percent? maybe 15 percent?
Using KOLs for product feedback and perspective on trends is important, however, relying solely on KOLs is a market research miss. Be sure you balance those perspectives with the mainstream user in order to avoid alienating 90 percent of your customers. Use this balanced perspective obtained through research to target development or marketing efforts and align your team around a common goal.
Real-World Example: KOL Feedback
An international medical products manufacturer wanted to obtain feedback on a new product concept with clinicians experienced in treating a certain medical condition. After performing 30 interviews with a mix of KOLs and mainstream users, a distinct pattern in usage emerged. The expert user (Nurse Manager KOLs) needed tools to evaluate the patient and the effectiveness of the product as well as allow clinical troubleshooting. The mainstream user (Floor RNs) needed the product to deliver the treatment without complications and allow easy usage tracking.
The development team was creating a product with too many features that most users would not use. The product design needed to evolve to address the complex bigger-picture concerns of the Nurse Manager KOLs, but at the same time be straightforward enough for Floor RNs to provide the treatment with little to no hassle. Leaving the mainstream users out of the picture would have complicated the final design resulting in a mismatch with the treatment work streams, confounded administration of the product and ultimately cause the mainstream users to shift to a less complex product.
Marketing and Development Focus
If you asked every member of your product team what your development or marketing was, would they give you the same answer? Having a clear, team-wide understanding of your customer needs, developed through market research allows you to focus your efforts in the right direction. Teams that are not aligned may be spinning their wheels operating in a way that is inefficient, dysfunctional and less innovative than teams with clear objectives and direction.
Real-World Example: Competitive Pricing
An international manufacturer was experiencing a decline in their product usage. Their initial hypothesis was that the lower price of a new competitive offering was driving the share drop. The team believed their product, which was more robust and feature-rich, justified a higher price. With that belief, it would make sense to develop a series of marketing efforts focusing on the features and benefits of the product to justify the higher price. However, this likely would have been a waste of time and resources leading to additional share decline. Through market research it was determined that while the product did outperform the competition on several aspects, customers were only looking for two basic things:
It needed to be good enough to cover a specific clinical need: Just do one job, not two, not three. And in doing that job, be cost effective enough for either the patient to pay out of pocket or for the insurance company to reimburse.
It had to be easy to use. The competition had provided a user-friendly interface and a way to track the product usage which, in effect, had lowered the clinic office “cost” of providing the product to patients. Reducing staff time and effort created more incentive for the customer to use the competitive product. With a new pragmatic focus, the team recommended a simplification in product use to meet these two needs and a robust plan for addressing the out of pocket cost and reimbursement hurdle.
Using the results of well designed and robust market research, your development team can challenge previous assumptions about your product use, focus on the real issues at hand and evolve the product design and offering to address real-world needs. This, in turn, will focus your team on the real drivers of growth and success in your space.