FT : Customers Are Overrated

Thursday, March 25, 2010

I recently commissioned some market research and, as is too often the case, it told me what I already knew or was obvious.  I paid the bill of several tens of thousands of pounds, consoling myself with the fact that the work at least confirmed my prejudices – always a satisfying sensation.  But I also sensed I had received very poor value; and in talking to other clients of research companies, I realise quite a few feel the same way.  As Michael Skapinker wrote yesterday , the idea that the customer is always right has become an accepted truth in business. Unfortunately, customer desires are often wholly unrealistic – because of cost, technology or legislation.  As Henry Ford said at the launch of the Model T: “If I’d asked the customer, he’d have asked for a faster horse.”  I remember Peter Boizot, founder of PizzaExpress and my predecessor as chairman, telling me how, in 1965, customers in his Soho pizzeria felt uncomfortable with authentic Italian pizza – and demanded chips.  But he stuck to his vision and guided their tastes to the genuine product.  I have also experienced data blindness over research studies.  Consultancies supply blizzards of material – far more than could ever be useful. Wordy, sprawling PowerPoint presentations compensate for a lack of incisive thinking.  One can end up paralysed with indecision, buried in e-mails too large to even download.

Great breakthroughs in fields such as new product development are frequently achieved by avoiding surveys and committees altogether.  Constant testing can lead to blandness and safety-first choices.  In creative affairs, corporate brainstorming sessions usually end up with groupthink dullness, all originality squeezed out because of the fear of failure or through the influence of office politics.  As Steve Jobs said: “It’s really hard to design products by focus groups.  A lot of times, people don’t know what they want until you show it to them.”  At Channel 4, many of the most brilliant and distinctive programme ideas during my time as chairman were pioneered by eccentric independent producers who were championed by renegade commissioners.  Meanwhile expensive, mainstream concepts often flopped.  Over the decades since I worked in advertising, I have sat in many focus groups and wondered about the quality and effectiveness of such qualitative research.  After all, who submits to a two-hour discussion about brands of washing-up liquid?  All too often, the answer is the lonely, the old, the unemployed, students and, most worrying of all, serial participants in search of the small stipend and free tea and biscuits.  It is very hard to persuade a normal working person to attend such panels, but they are usually the target subjects.  I worry that researchers who appear to succeed are too often the snazzy firms who trade in sexy stereotyping.  They use phrases like “Inner City Adversity” and “Twilight Subsistence” to categorise and supposedly understand various imagined socioeconomic and demographic groups.  I am unconvinced that this terminology and philosophy is especially practical and relevant for many companies.  In my restaurants, the people who know our customers are not researchers but branch managers, who serve the public all day, every week.  Our staff may not have the slick patter, but they have the frontline, first-hand knowledge.

Another unfortunate byproduct of the growth of research has been the increasing use of surveys by political and charitable organisations in their campaigns.  Almost every day a pressure group gets publicity by publishing selective and scary conclusions about poverty, health, discrimination or other controversial issues.  Journalists rarely question the study methods or validity of the results.  Even if there were no errors in the sampling techniques, questionnaires or systems used, the media often over-simplify and exaggerate outcomes.  Over-reliance on researchers means owners and managers are separated from the consumer.  Successful entrepreneurs I know put more effort in talking to customers themselves, than they do working with costly experts who tell them what they should have learned long before.

Reference : http://www.ft.com/cms/s/0/b36f6642-36e5-11df-bc0f-00144feabdc0.html

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