One of the reasons why you might be here reading our words is that you doubt investing in empathetic design would yield an attractive return. Thank you then for giving us a chance for convincing you of importance of properly designed research.
First, we will see how costly launching an innovation without proper research can be. Second, we will provide you with a great story about how beneficial empathizing with a user could be when it brings a game-changing insight into a business.
Empathizing with your customer has an enormous impact on your business.
95% of new products introduced each year fail. A McKinsey & Company study from a couple of years ago has shown that 80% of top performers did their research, while only 40% of the bottom performers did. To frame it more precisely, McKinsey found that "more than 80 per cent of the top performers said they periodically tested and validated customer preferences during the development process, compared with just 43 per cent of bottom performers.” Those numbers imply that motivation and capability to listen to consumers’ voice is one of the key predictors of a company’s success and may even be crucial for that company’s survival.
Well-designed research can save you money
It is not too hard to find examples of great failures caused by lack of proper customer research. A classic example I remember from my university marketing course is Betty Crocker’s case. General Mills was very excited to launch a new brand offering an innovative instant cake formula - something completely new for American housewives. All what they had to do was to mix the powder with water, pour it to the pan and bake in the oven. Yet, for some reason, and to the producer’s great surprise, commercially it was a total disaster. Even though Betty Crocker gained a lot of attention at first, it was not repurchased by the housewives.
General Mills decided to find out the source of its failure and asked the customers. It appeared that women felt bad using the product despite its convenience. It saved so much time and effort that they felt they were deceiving their husbands and guests (or even felt guilty about not putting enough of an effort into the cake’s preparation). Therefore, against all the conventional wisdom, but in line with its customers’ pains and gains, General Mills revised the product to make it less convenient. With the new product the user needed to add water and a real egg to the ingredients. And this was enough to come back on track to success. Why? Firstly, doing a little more work made women feel less guilty while still saving time. Secondly, the extra work meant that women had invested time and effort in the process, creating a sense of ownership (and thus a more positive bias toward the product). Betty Crocker cake mixes became a hit!
Despite the final success, something initially did not work. Maybe nobody asked about the product soon enough to pivot its initial formula. Maybe there was no exploration research before the design phase. Or there was, but it was not deep enough to reveal some basic truth about being a mom and a wife in the 1950s. Whichever scenario had actually happened, there is no place for such mistakes in today’s highly competitive and fast changing business reality.
A research insight can turn out to be a game changer
A story of Joe Gebbia and Brian Chesky, Airbnb cofounders, is a great example of that, as well. In 2009 Airbnb had no investors and lot of debt. Judging by the metrics, which indicated poor rental numbers, the business was close to collapse. But the founders decided to take a step back from a numbers only approach to focus on their users. They started to work hand in hand with property owners including early adopters in the business and gained priceless on-the-ground insights. Some of them turned out to be a game changer for their business.
The most important barrier which they found, was the lack of trust between the property owners and the renters - people who had never met each other. Owners were struggling to entrust their precious properties to a stranger and renters were uncomfortable to live in a stranger’s house. Joe and Brian found that trust was what should be at the heart of the matter at Airbnb and the company has put a lot of effort in this quality since then. Now the company uses machine learning to assess the risk of any reservation evaluating many factors to increase users’ safety. As an example they do background checks on every host and guest in the US. Furthermore, each and every person on Airbnb has a detailed profile page with comprehensive information about themselves and their home and all reviews abut property owners and renters are public to the users of the service. On top of that, service’s messaging tools successfully encourage and enable communication between users.
For Airbnb, focus on addressing the lack of trust – an important user’s barrier- resulted in skyrocketing rentals. And that might have not happened had not they switched their attention from WHAT their users were doing or not doing (reflected in numbers) – to WHY they were behaving this way (reflected in barriers and drivers). Even though their research approach was quite limited, they developed an informed intuition about a barrier, which was a game changer for their business.
Proper research design is context specific
We cannot say that one research approach is always better than the other. The approach should depend on what we want to achieve and what are our research goals. Steve Jobs said ‘It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.’ So how to get from your current or potential users the answers you are looking for? It is a whole different story which you will hear from us next time, or you can get in touch so we can help you decide.
Marta Wawrzyniak + the rest of the KBA team