Focus groups provide valuable insights that can ensure success before the launch of a new business, product or service

I had an interesting conversation with an aviation entrepreneur, who has a great idea for an onboard combination flight system and entertainment center for small GA aircraft. He wanted to get an idea of how much he should allocate to marketing in the business plan he was developing. As we discussed the various marketing tools he could use to promote his product and budget he would need, it became clear that he did not have a clear idea who his prime target market was, how many units he thought he could sell, or how much to price the product.

I suggested that before he spent any more time and effort building the prototype, developing a business plan and trying to raise investor money, he should do some market research to confirm he had a viable product that would sell at a price that would deliver a profit.

I cautioned that, making too many assumptions in the product launch without validating them can be fatal mistake. The fact is, almost all failures, business or personal, can be directly attributed to making too many false assumptions.

Has this ever happened to you? It has with me! I’ve become so enthralled with a business idea that I am positively convinced is going to be an enormously success – I spend a lot of time and money in its development, only to have in crash and burn. In hindsight, I realized that I got so excited with the potential success of my idea that I was blind to obvious warning signs, which I blissfully ignored.

Remember that old saying: when you assume things, you make an “ass” out of “u” and “me.”

Larger corporations invest heavily in market research before launching a new product or service. They test everything from the color scheme of the package to the taste of their products. Yet, even with all their money and resources, they still manage to make some huge boo boos, remember New Coke, Crystal Pepsi, and Apple’s Newton.

Still, don’t dismiss the value research can have in the process of developing your product or service. Customer insights can be extremely helpful in identifying your real niche or core competency of your product/service from your customer’s perspective. You might assume one thing, but your customers might surprise you with answers that point to something completely different.

There are two basic types of market research: quantitative research and qualitative research.

Quantitative research – involves the analysis of existing data to help validate decisions about your product/service, which can help you determine the size of your market from a demographic or geographic perspective. For example, if you wanted to know how many pilots there are in New York State with an instrument rating and third class medical, you can get that “quantitative” information from the FAA.

Qualitative research – delves into understanding your customers needs, buying habits and motivations and is usually done by conducting one-on-one interviews or focus group sessions.
This approach can provide important insight into what your customers think about your product or service. Some questions qualitative research can answer are:

1. Would customers consider buying your product or service?
2. How much do they think it should cost?
3. How do they envision using it?
4. What features would improve it, and what features are not very important?
5. How easily do they understand the product or service?
6. Are there obstacles to communicating its benefits?

Research costs money, but saves in the long run

If you’re tempted to fore-go any pre-launch marketing research, I would argue that it almost always pays for itself in the end. At a minimum, it may provide suggestions on ways to improve the product/service, or ideas in how it should be marketing. Or, it may convince you that your business/product/service is not viable because the market is not there, or the price/cost ratio is impractical. Though this outcome may be disappointing, trust me, this is a far better outcome than having first wasted a lot of time and money and disillusioned of failure.