We've changed the name and look of the blog to better integrate with my consulting practice.  The new name for the practice is Synaptics Group, Inc., and the blog will now be called the Synaptics Blog.   These changes should better reflect the focus of the work, which is on Market Relevant Innovation. 

What's Market Relevant Innovation?  Think of it this way.  Apple didn't invent the MP3 player, nor did they invent e-commerce.  But they did develop the most market relevant way to access media, through the development of the iPod, iTunes, and the business model that connects them.

This is just the first step in connecting the two sites.  The design will probably go through another iteration or two in the next few months, and I'll continue to post the latest thinking on Market Relevant Innovation!

I have repeatedly heard the word insight as something to be observed, as in "We observed several insights on that consumer interview."

There are several entries in dictionary.com for the word insight.  In different ways, they all describe insight as an understanding of the true motivational forces that drive actions, define underlying truths, shed light on, or help to solve a problem.  Assuming that is true, insights cannot be observed directly; they need to be inferred or derived by thinking critically about the observations we make.

The word insight, as it is applied to consumer research, is increasingly misrepresented.  Observing behaviors and describing them is a fairly straightforward exercise, and many people can easily do this.  Deriving insights requires the ability to observe, infer why the observation occurred, formulate a theory, test the hypothesis against multiple data sources, and construct an argument that will prove that the conclusion is valid. A smaller subset of people who possess a specific aptitude and attitude are best suited to do this.

Almost everyone, however, has the ability to understand the difference between an observation and an insight. Mistaking them is understandable for most, but if you use consumer insights to inform your work, please make sure you know the difference.

I talk a lot about learning from your market and applying that insight to grow your business. However, yesterday I realized that it's just as important to be aware of what you are teaching your market.

In a recent post on Jeff Jarvis' blog, he referenced a reader who talked about the ways the news industry needs to evolve its thinking to survive in the new economy. The new thinking is comprised of "Google'esque" ideas that focus on the value of journalism as a service rather than the paper as a product.  I left a comment that I think is worth exploring more thoroughly.

While I think the ideas presented are good, they do not address what I feel is a more fundamental issue in the news industry.  They have taught the market that the newspaper has value, and the content should be free.  While I'm sure they didn't do it on purpose, they lost sight of why people bought newspapers in the first place.  When they made the move to the web, they missed the opportunity to capture this value in a new way.  Instead they gave it away, and going forward it will be difficult to capture value for what consumers now expect to be free.

I do believe there is great value in good journalism.  Before the industry can pursue radically different business models to capture this value, they must first do whatever is necessary to decouple the journalism industry from the newspaper industry in the hearts and minds of consumers.  The market will never value journalism if the industry cannot demonstrate this value clearly, consistently, and separately from newspapers.

Are you aware of what your company's behavior is teaching your market?

The other day I was having a chat with some colleagues about authenticity. Current wisdom suggests that brands and companies that are perceived to be less than authentic are doomed to fail. However, we know that brands, companies, and even people will behave differently in different situations. We even expect that they should. To lack the flexibility to do so would be socially disrespectful. So what is authenticity, and how to we ensure that others will perceive our work as authentic?

"To thine own self be true." That's the standard answer. If you are true to yourself, then you (meaning your brand, service, company, etc) will be perceived as authentic. However, I think that's only part of the answer. People can't judge how true you are to yourself. They judge how true you are to them, based on what they perceive. If you know what cues your market will respond to, then you can manage their perception consistently. This requires the ability to suspend what it means to be true to yourself, in order to fully immerse yourself in what it means to be true to someone else.

A few years ago, I was mentoring a person just starting out in his career. I imparted the standard guidance as he was doing his first solo project, and I asked him to periodically let me know what he thought was "cool", and why.  He did well on his project, and I learned a lot about how his social group thought about the world. One day, we were talking about why he shunned big, corporate brands, and he used me as an example.  "The coolest thing about you Ellen, is that you know how uncool you really are. Some big brands get that right, but most don't." 

Hmmm...who said authenticity was a good thing?

People often ask me how they can improve their consumer interviewing skills.  The thought being that if they can perfect the art of the one-on-one interview that they will have the key to understanding their markets.

I applaud the intention, and people who try to stick to a script rather than have a conversation with a consumer can surely improve their skills.  But it's important to remember that one-on-one interviews are only one tool in your toolbox.  Full understanding of what will drive consumer behavior in a given market requires a combination of qualitative and quantitative, primary and secondary, and generative and evaluative research tools.

How do you know which ones to use?  The answer to that question requires a clear understanding of the business decisions that need to be made.  Research should never be expected to give you an answer.  It is a tool to give you information that will help you to derive the right answer.  And the best way to ensure that you've arrived at the right answer is to collect information that will expose all sides of the issue you are dealing with, covering the proverbial blind spots.

Which leads me to the blind men and the elephant metaphor.  In the story, six blind men are asked to describe an elephant, yet each only touches one part of the elephant.  The man who touches the tusk thinks the elephant is like a spear, the man who touches the side things the elephant is like a wall, and so on.  They end up arguing that the elephant is most like whichever part they had experienced, without realizing that the elephant is made up of all of the elements, and is not at all like any single one. 

My advice is that the best way to improve consumer understanding skills is to figure out which perspectives and information will be necessary to paint the whole elephant. This can only be done by reconciling the results of all the tools used, rather than relying on any one to deliver the answer.  Which then means that the best skill to hone is critical thinking.

There's a multimedia presentation in the online Harvard Business Review about how to get a better understanding of what customers may truly want. 

I think this research method is a small step in the right direction.  It shows how most quantitative evaluations that ask consumer to rate the importance of different features can lead to average ratings of each feature against the others.  The new method they propose forces trade-offs of one feature over others in a variety of groupings.  This results in a better understanding of what the consumer truly would prefer.

While this method is an improvement, I can't help feeling a bit uncomfortable with the process of having consumers choose discrete features from a list that was created based on aggregated focus group input.  What's uncomfortable is that a consumer's ultimate opinion is the result of how they perceive experiences holistically. In the presentation the example was from a restaurant chain.  The features were things like "food served hot and on time", or "updated decor".  What this does is force consumers to decide which single attributes are most responsible for creating the experience they would like to have. 

Asking consumers to do this is unfair. They are not restaurant space designers, and they are not chefs. It takes a lot of work to understand what experience the consumer would like to have, and then even more work to figure out how to combine the design and food elements to holistically deliver this experience.  It also leaves designers and chefs with ambiguous instructions for how to proceed.  Should the chefs deliver hot hamburgers quickly while the designers put white linen on the tables? Yes, this is an extreme, but we've all seen it happen.

Next time you're evaluating features in your next product, think about what you're really asking consumers to do.  Are you evaluating products holistically, or are you shirking your responsibility and asking consumers to translate features to experiences for you?

Mike Arauz posted an interesting metaphor connecting brands to desire paths.  Here's how he describes it:

This is a desire path (lots more here). Desire paths are the walking paths that get traced across the ground when groups of people, over time, leave the sidewalk and find their own more convenient routes from one place to another... We have many places to go and experiences to choose from; and our decisions are guided by our personal interests and the groups of people we want to join.

What I love about this metaphor is that it brings home the point that consumers will always find the most direct route to satisfy their motivations. Yet, if you ask them for directions, they will probably not describe the desire path.  Why? Because desire paths are personal. People don't assume that you would desire the same path, so they will most likely talk about the "accepted" path.

You can only learn about the desire path by connecting with the consumer. Successful products, brands, and services convey that they follow the same desire path. How do they do that? This is the fundamental skill that separates good consumer insight from superficial consumer insight.  It also separates good design and development execution from rote design and development execution.

How well do you understand your consumer's desire path? How well is this knowledge translated into other areas of your business? If you're not doing both of these things well you will be wondering why, after you've done everything "right", your consumers are no longer walking by your side. They have left you to follow a path you couldn't see.

Several weeks ago, my friend and excellent Salon participant Sean was inspired by Saul Kaplan's article about The Passion Economy. Sean decided to put forth a challenge to several of us to write a short article on what the idea of the passion economy meant, and its potential as an opportunity or fad.  All of the articles were written independently, and we did not see the other contributors or the whole document until it was finished. Feel free to download and share the finished e-Book, and join the conversation!

I find that people who use consumer research tend to fall into one of two camps.  Those who look to the consumer for answers, and those who look to the consumer for problems.

People who look to the consumer for answers will spend a lot of time setting up research so that it will yield explicit recommendations for what your offering should be.  I find that this can be useful if you are looking to incrementally improve your existing offering. Consumers can be reasonably explicit in telling you what they like or don't like about your current offering, and many can offer suggestions for improvements.  Does it mean that you should take their suggestions literally?  Not usually, but it is fairly easy to understand where they are coming from.  The potential pitfall is that you could end up missing an opportunity to do something radically different, because the focus on what the consumer wants, rather than why they want it.

People who look to the consumer for problems will spend a lot of time trying to discern the motivations and values of the consumer that are driving their decision-making process.  I find that this is useful if you are looking for opportunities for disruptive innovation.  In this case, the consumer cannot explicitely tell you what to do, but in understanding how they make decisions, you can develop criteria for the success of a new offering. This focus can also help you to develop incremental improvements as well, because the way they make decisions doesn't change.  The potential pitfall is that many people have a difficult time translating the decision process into a successful offering.  It requires that the people doing the research can balance and connect linear and non-linear thinking, and they are more difficult to find.

I'm curious to know how others use consumer research, because I feel that there is a disconnect between what great research can yield, and what most companies are getting from it.  Regardless of how you use research, it is a tool to help you to make decisions.  If it is a stand-alone discipline it is probably too isolated to help to define either problems or solutions. What practices have you seen, and how well do they work?

As long ago as 2003, when Michael Silverstein's book Trading Up was published, we've been acknowledging a shift in consumer spending.  Wealthy consumers will trade down to less expensive items when it makes sense, and the middle class will trade up to more expensive items if the benefits justify the expense.

With the current economic crisis well underway, it's interesting to see that this behavior is still playing out, but in a slightly different way.  When the economy was strong, consumers acknowledged trading up to higher priced products.  They justified their purchases by citing the additional benefits, or by trading down in other areas that were less important to them.  Now, it appears that the consumers' rationale has changed.  People are only spending extra money on necessities, but looking closely, one consumer's necessity is another consumer's luxury. 

This presents an interesting opportunity for innovation and product development.  Many companies are responding to economic conditions by defeaturing products and cutting any costs possible to better appeal to the masses.  I would argue that companies that serve the needs of their consumer groups in better - which may not always be cheaper - ways, will be better off in the long run.  The other day, the Financial Times reported that BMW may actually post a profit for 2008.  BMW does not appeal to the masses and consumers who appreciate the features and attributes of the brand do not have common income levels.  What they do have in common, however, is that they consider the features and benefits of their BMW to be a necessity and will either pay a premium price, or would rather buy a used BMW over any other new car.  This tells me that BMW has taken the time to find out what their consumers consider necessary, and they deliver it in their products.  They aren't trying to find ways to make their cars have universal appeal, and it appears to be paying off.

What do your company's consumers consider to be a necessity in their lives?  Do your products and services deliver on the qualities that your consumer would deem a necessity?  If your consumers have less disposable income than they had before, the answer to these questions becomes even more important.  If you won't give your consumer what they need, surely someone else will.