Another popular set of questions coming out of my time with Dr. Barnes’ class of Masters of Engineering students at Pratt asked about how entrepreneurs use market research. It’s a topic I have thought a fair amount about–one of my ventures, FGI, was an innovative marketing services company with a market research division.
There are of course two types of market research, Quantitative Research, and Qualitative Research.
Quantitative Research, when properly done–a large enough sample size of qualified participants–can result in a statistically reliable finding. Back in the FGI pre-Internet days a survey would be carefully crafted by a trained professional, representatives of the audience or market were identified, and the survey would be administered, usually over the phone. These days it’s less likely a skilled pro is creating the survey, and much more likely it is being administered on-line.
Qualitative Research, when properly done–again, the key is qualified participants–won’t result in a finding that is statistically reliable. Focus groups were a common qualitative research tool then as now, and the strategy was to carefully introduce the idea or proposition being considered, and listen to how participants talk about it, what excites them, what confuses them.
My view, as both a user of research and a seller of it, was that the more innovative the idea being tested the less useful Quantitative Research will be. The classic example of this occurred when Xerox was developing its first copier. It conducted Quantitative Research with likely customers who were asked to imagine a new piece of technology that could easily produce dozens and dozens of copies of a single document. The research revealed that they saw no need for it.
You see, before the Xerox machine it was the typewriter and it’s limited capabilities that shaped the document management strategies for most offices. A typewriter can easily provide three copies of the document–the original being typed, and the two copies made from the sheets of carbon paper placed behind the original and before two blank sheets of paper (the stroke of a manual typewriter had just enough force to create two more copies).
So, the participants in the research responded by wondering why anyone would ever need more than three copies, since three copies were all they could imagine and had long been enough.
When developing an idea that is innovative, where the audience isn’t familiar with the new benefit being offered, I have found Qualitative Research by far the most useful. Working with Xerox, for instance, I could have explained in a focus group setting how the new technology will work, I could prompt them to get them thinking about all their various document needs and all their constituents’ needs, and then I could carefully lead them to a thoughtful consideration of a series of ‘what if’s’ that allows them to begin to imagine what this technology can do for them. I am not looking for an outcome that 7 out of 10 dig the idea; instead I am listening for the words they use to describe its value, to describe their confusion, that points to their interest, and I hope to come away with a much more useful understanding of how I should develop the product.
Another way of stating this comes from an old Japanese proverb–It you want to learn about something don’t study it, get used to it. Qualitative research helps me get used to it, to develop a feel for it, based on the participants reactions and language.