By David Schneer
7-Minute Read
Astute Marketers Set Aside 1-5% for Research—The Rest Just Watch Their Money Burn.
I’ve often been asked what benefits product managers can derive before launching a new product. That’s a good question.
In my new book, “BACKBONE: Surviving the Road Less Quantified; Toward a Deeper Understanding of Qualitative Research,” I showcase how market research, and particularly, qualitative research provides solid market feedback. In this blog, I will recount these benefits. But who else besides product managers should be interested in research? We’ll get to that shortly.
Meanwhile, here are the advantages of conducting market research prior to new product (prototypes, products, communications, etc.) launches:
- Helps Assess Feasibility: That is, does this dog hunt? Avoid costly mistakes by validating demand before development. Identify potential landmines early in the process. Avoid launching a product that doesn’t resonate with the target audience. If not, they will grow wooden ears quickly.
- Ensures Product-Market Fit: Like a bad pair of shoes, market misfits can be painful. By understanding customers’ needs, pain points, and expectations, you can better match product features with real user demand. Moreover, once you accomplish that, you can develop a compelling value proposition that differentiates your product. You need to break through the clutter.
- Identifies the Right Target Audience: Avoid bad blind dates. Define, identify, and reach out to primary and secondary customer targets. By understanding customer demographics, behaviors, and purchasing habits, you can tailor messaging and positioning that will matter.
- Drives Competitive Analysis/Differentiation: Whenever someone says they have no competition, they may be fooling themselves. Competition doesn’t have to be a company; it can be a process or a habit. Identify competitor gaps in the market and areas for product innovation. Learn from competitor strengths and weaknesses what the best market is for you to attack—and let them pay the bill for this education. Find out what differentiates you from your competitors and exploit that.
- Optimizes Pricing Strategy: So that you neither underprice (leave dollars on the table) nor overprice (drive cost-sensitive customers away), research can help determine optimal price points and willingness to pay. It is far better than a dart board.
- Shapes Marketing and Go-to-Market Strategy: Not only do you need to know what to say to customers, you also need to know where to say it. Research can help you Identify and prioritize the best customer channels. This will allow you to fine-tune your messaging, branding, and positioning.
- Research Guides Product Development Priorities: Consider the typical remote control and especially those from some Japanese brands. They are crammed with numerous buttons that no user would ever need. Why? Just in case. Now consider the Apple Remote. See my point?
- Research will help you focus on must-have vs. nice-to-have features. In addition, you can assess the feasibility of prototypes and early concepts before costly full-scale development. This can help ensure the product development roadmap aligns with customer needs.
- Strengthens Stakeholder Buy-In: Like RAID on a bug, Lack of stakeholder input can kill good research dead right in its tracks. Reduce internal resistance by giving stakeholders a chance to weigh in. Their input can help secure executive and investor support to help justify resource allocation against clear market demand.
- Enhances Post-Launch Performance: Once your product is released, how do you know your marketing efforts to drive sales are on target? Research can be used to establish benchmarks for tracking product awareness, adoption, engagement, and retention. Prepare for agile adjustments based on customer feedback.
In his seminal marketing book, the Regis Touch, Regis McKenna compares marketing to a moon launch. It’s not a straight shot, but the rocket must keep moving in synch with the moon’s orbital arc. Such is marketing; it is not static but dynamic.
- Builds Brand Trust and Customer Loyalty: Bring the voice of the customer into the boardroom. Show customers they are being heard and understood with research.
Product Managers will appreciate these benefits to increase the chances of product market success. But who else would find market research valuable?
- Executives & Leadership Teams (CEOs, Founders, COOs, CFOs): The “C” Suites. They need to understand market viability and long-term strategy before allocating needed budgets and resources.
And speaking of budgets, we recommend to our clients that they earmark 1%-5% of their overall product introduction budget for research.
- Marketing & Brand Managers: They shape the messaging, positioning, and go-to-market strategy. Customer insights, competitive positioning, and campaign effectiveness are all important to this group.
- Sales Leaders & Business Development Teams: A wise man once told me that a wiser man told him: marketing holds the customer down long enough for sales to pick their pockets. Thus, understanding customer needs and objections must be addressed.
- UX & Product Designers: They rely on user research to create products that are intuitive and desirable. Customer usability feedback helps to drive product-market fit.
- Research & Insights Teams: They are responsible for gathering and interpreting market data either directly or with partners like us. They are concerned about best practices, methodologies, and case studies demonstrating research impact.
- Investors & Venture Capitalists: It has been said that it is hard to give advice to a billionaire. Nevertheless, they need to fund market-validated ideas that demonstrate strong commercial potential. Research can assess market demand validation and hence mitigate risk. We do due diligence.
- Engineering & Development Teams: These technical professionals need clear priorities for product features and functionality. Research can help them build products that align with customer needs rather than management assumptions.
- Startups & Entrepreneurs Research can help fledgling companies avoid common pitfalls by using cost-effective research methods. Often operating on tight budgets, this group needs to maximize every decision.
- Retailers & Distributors Consumer preferences, sales forecasting, and the competitive landscape all help the channel stock products based on demand.
As you can see, there are many advantages to market research that numerous professionals can rely upon.
Reach out to us for your next product introduction or campaign launch.