In almost all companies, market research is a critical part of the innovation process. Market research helps companies identify attractive opportunity areas, compare innovation initiatives, and fine-tune their strategic approach. It’s a pity then that companies frequently stumble when using market research to guide innovation decisions.
It’s not that market researchers are bad people. Almost all the market researchers I have met are good, thoughtful people. The tools of market research are—when used properly—good, useful tools. But something comes off the rails when innovation-seeking companies organize, execute, and use market research.
The four biggest flaws I see with traditional market research approaches are:
1. Talking to the wrong customers. It’s been more than a decade since Clayton Christensen described how the root of the innovator’s dilemma is a myopic focus on the most demanding customers in the market. Yet, many companies still spend a disproportionate amount of their time trying to understand the wants and needs of existing, demanding customers. Innovation opportunities almost always come from understanding a company’s worst customers or customers it doesn’t serve.
2. Asking the wrong questions. Many companies will ask customers, in essence, “What do you want?” Academics and practitioners more eloquent than I have described how customers can’t reliably answer that question. The focus has to be on the problem the customer is facing—and even that can be tricky because customers can’t always articulate problems that aren’t directly targeted by existing solutions. ...
Read the rest at Scott's Harvard Management blog, Innovation Insights.