R[E]D – Research : Emotion : Design

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The Essential Marketing Insight That Ford Completely Missed In The 1970s

Today, it seems obvious that business owners should seek input from their customers. But when global marketing and research firm J.D. Power was making a name for itself, that wasn’t always or even frequently the case.

ford-jd-power-cars-auto-industry

In “Power: How J.D. Power III Became the Auto Industry’s Adviser, Confessor, and Eyewitness to History,” authors Sarah Morgans and Bill Thorness revisit how the research firm rose to prominence by sticking to a very simple idea: listen to your customers.

J.D. Power discovered exactly what happens when you act on or ignore customer insights with two separate auto companies in 1975.

Ford Motor Company had just decided to try marketing a new type of vehicle — a minivan. The entirely new design would bridge the gap between the station wagon and the passenger van. To test customer reception in Los Angeles (one of three sample cities), Ford contracted J.D. Power.

Tension erupted when Ford outlined how it wanted the study conducted. The auto company planned to recruit drivers who owned large vans, large pickup trucks, or large station wagons to test the minivan. They assumed these were likely buyers of the new product — essentially defining their target market before they’d researched who that might be.

Unless you’re the actual customer, you can’t sit
around a table and come up with what they
want, think, or feel. Avoid groupthink!   – R[E]D – Research : Emotion : Design

J.D. Power founder Dave Power III disagreed. He argued that owners of large vehicles were unlikely to elect to downsize. Ford would be better served by testing its product on the general car-buying public. “I tried to object to interviewing these people,” he recalls in the book, “because we said they aren’t the ones who will be in the market for it, and never will be.”

Despite their disagreement, J.D. Power went ahead with the study Ford requested and found themselves vindicated: the car flopped with Ford’s selected demographic. Had the auto maker listened to Power, who was basing his ideas on customer research, it could have averted such a failure and executed a far more effective study.

The second moment of truth came when Subaru consulted J.D. Power about a four-wheel-drive vehicle. The model hadn’t been introduced to passenger vehicles, and Subaru’s parent company thought a four-wheel-drive station wagon wouldn’t sell in the U.S.

Subaru’s U.S. chief consulted J.D. Power, which concluded from research that the car would sell a then massive 30,000 to 40,000 units a year. Subaru took the report to their parent company and, this time, the industry listened to J.D. Power’s customer-based research. The car was given the go-ahead, and sales met J.D. Power’s forecasts in the first year.

The simple principle of listening to the customer and weighing consumer research made a significant difference for these auto companies. That principle certainly holds true today as well. Overlooking the “voice of the customer” — “VOC” as the authors term it — can be hugely problematic for any company.

“Ford missed the opportunity to be the trailblazer in a lucrative new market segment because it did not heed Dave’s call for listening to the voice of the customer (VOC) in the most effective way,” the authors write. “Subaru’s success, on the other hand, was utterly defined by acting on Dave’s insights into VOC.”

By Alison Griswold

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Five Reasons to Avoid “Group Think”

First, what is Group Think?

Group Think is the process of gathering your marketing team, designers or executives around a table to discuss what the customer thinks and what they will like.

Here are five reasons to avoid Group Think:

1. If the group around the table isn’t the current customer using the product, it is the wrong group making the decisions. It is the customer who uses and believes in the product. The customer’s perception is vital.

2. With today’s technology, it is easy to gain insight from customers. There is no excuse to exclude them from design decisions.

3. Group Think doesn’t allow you to get into the mind of the consumer. It won’t give you the key insight into what they are thinking. Gathering information from the mind of the consumer is so revealing.

4. Within the trap of Group Think, an individual or the group as a whole might say, “It’s our job to tell the consumer what they think and like.” This thinking trap compares to telling a significant other what is best for them without letting them speak for themselves. This doesn’t work in life and it doesn’t work in business either.

5. In the end, it’s your consumer that is going to see the campaign and decide what works for them, not just the individuals around the table. Why not find out what they think before pushing the product out to them? Doing so is less expensive and success rates are higher. It’s all about ROI and it’s worth the investment.

Jason Budge is one of the founders of Thrive Life. Thrive is the 14th fastest growing company in Utah. Find out what Jason thinks:

Success is all about Customer Clarity and knowing how to get it. 

 


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The Key To Avoiding “GroupThink”

 Deseret Book, “Bringing Values Home”deseretbook.jpg

History plays an important role in our society. Upholding a history, like that of Deseret Book takes great care. They trusted us with developing a new look for their entire brand. Deseret Book, as a company, reflects family values and moral standards. It was imperative that the design transformation continued to reflect these values to their current customers as well as a new generation of largely female purchasers.

 From the first round of research RED developed three great concepts for Deseret Book. Then we took those three concepts out to the exact Deseret Book demographics that we wanted the brand to appeal to. As a group of men on both sides of the project we felt like a specific concept was the best one. But, were we the right group to make that decision? When we asked the exact age and female demographic what they liked this concept failed and another had a strong emotional following, disaster was avoided by making sure that we where listening to the right demographic group. Avoid Groupthink if that group is not the correct demographic for the product.

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