New Study: You Don’t Know What Your Customers Want

What if your R&D was guessing at customer needs—and guessing badly? A new study by The AIM Institute shows this is exactly the case for most B2B companies.

Cuyahoga Falls, OH (November 13, 2016) – for immediate release

Cuyahoga Falls, OH (November, 2016)—Experts have bemoaned the low success rates of new products for years. One highly-respected researcher, Dr. Robert Cooper, puts the success rate at one-in-four, when measured from the beginning of the development stage.

What’s the cause? Since the early 1970’s, research has shown the main problem isn’t with scientists and engineers failing to come up with the right answers. Rather, they are working on the wrong questions. For more than four decades, research and experience have pointed to this simple truth: Suppliers lack proper insight into customers’ needs.

New research by The AIM Institute now reveals just how poor this customer insight actually is for B2B suppliers. The AIM researchers took an interesting approach: Historically, the fact of poor customer insight was established by investigating why new products failed. But in this new research, in-depth interviews were conducted to understand customers’ real needs… and compared to what new-product teams had thought those needs were before the interviews.

Image depicting the 2 types of New Product Blueprinting interviews

The in-depth interviews were conducted in two phases: First, qualitative, divergent Discovery interviews uncovered a full range of customers’ outcomes (desired end-results). Then quantitative Preference interviews converged on just those important, unsatisfied needs that customers wanted “fixed.” The first round of interviews minimized errors of omission, and the second minimized errors of commission. (An outcome with a “Market Satisfaction Gap” in excess of 30% gave unbiased, unfiltered evidence that the market was eager to see it improved.)

So how many teams changed their new product design as a result of these interviews? Remarkably, 86% of the project teams said their interviews had a “great” or “significant” impact on their new product design. Clearly, these teams would have developed different products without these in-depth interviews.

A total of 675 interviews were represented in the study, conducted by 35 project teams from 14 different companies. The project teams in the study were not from “slacker” companies: Over two-thirds of these project teams were from Fortune 500 companies (or similar size, if headquartered outside the US). Also, over half of the businesses studied already had a “leading” or “strong” position in the markets they were interviewing, so one would have expected reasonably good pre-existing customer insight.

According to Dan Adams (AIM’s Dan Adams), founder of The AIM Institute and innovation blogger at Awkward Realities (The AIM Institute), these results were unexpected: “For years, we’ve worked with clients as they implemented our New Product Blueprinting methods… and we’ve heard a recurring theme that suppliers were surprised by customers’ real needs. But to learn that 86% of teams had to change their design this significantly? We didn’t see that coming.”

The study also revealed some other surprises:

  • Many teams not only changed their product design as a result of the interviews: About half also changed their project scope—the topic area they were pursuing—either “greatly” or “significantly.
  • Among the 35 market segments pursued, customer eagerness for improvement varied greatly. Some markets were uninterested in suppliers innovating for them; they were “over-served.” But nearly half of the markets showed great eagerness, with Market Satisfaction Gaps over 50%: At least one outcome was critically important and below the “barely acceptable” satisfaction level.
  • Most teams became skilled at these in-depth interviewing methods quickly. Nearly 90% of respondent reported they were able to both listen and probe more effectively during their interviews.
  • The mere act of closely engaging a customer in these types of interviews raised the customer’s estimation of the supplier. More than 90% of teams reported that their interviews led to “increased customer interest” in the supplier.

These results are described more fully in two recently published reports from The AIM Institute: Discovery Interview Research Report and Preference Interview Research Report, both downloadable at AIM Whitepapers.

Adams suggests the key is ensuring your R&D works only on that which customers care about… while competitors’ R&D keeps guessing. He concludes, “In 20 or 30 years, I believe most B2B suppliers will be fully tapping the incredible knowledge of their customers. But I can assure you this is still rare today. B2B-optimized customer insight is an enormous source of competitive advantage for those pursuing it now.” So perhaps the bad news of poor customer insight could become good news for your company.

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