Updated: Mar 4, 2020
There have been some recent news articles about the role of marketing insights and research, most notably Jeff Bezos of Amazon, who in his 2018 letter to shareholders said: "No customer was asking for Echo. This was definitely us wandering. Market research doesn’t help. If you had gone to a customer in 2013 and said “Would you like a black, always-on cylinder in your kitchen about the size of a Pringles can that you can talk to and ask questions, that also turns on your lights and plays music?” I guarantee you they’d have looked at you strangely and said “No, thank you.” Really? Give me a break.
Over the years, we have heard similar things from other executives. In a blog post covered by Bob Lederer, he relayed the reaction of Robert Granader who blogged about the reaction of several analysts at his firm, which included this gem: “Amazon surely had market research indicating that customers wanted hands-free music, home connectivity, multi-functional devices, and faster/easier searching for information. It was then Amazon’s job to develop a product to serve all of those needs. Market research tells you what you need to know, but the company has to decide how to act on it. Without market research, you’re flying blind. If Amazon didn’t know that customers wanted all of these things, there’s no way the development of the Echo would have been as successful as it was.”
He goes on to say “Most companies don’t have the time to “wander” through their next market, acquisition, or fundraising, so they rely on market research — because sometimes you need to get it right the first time.” [my emphasis]
I find the hubris of charismatic types like Bezos annoying and amusing at the same time, if that’s possible. The problem that comments like these pose is that they are being made by people with the power to persuade, which morphs into denigration. So, unfortunately, these individuals are uninformed and lack understanding about what research is and how it can be used.
If research is not adding value, then you’re not doing the right type of research, or you’re not asking the right kinds of questions. It’s really that simple.
We tend to think of research as a series of steps that must be conducted in sequence before an insight or an “aha” moment occurs. Wrong – insights can come in any sequence or order, and from any source, but objective research results are the agent of one or more controlled experiments. There is also a false belief that, simply by virtue of conducting research, it will always lead to some magical “aha” moment that is immediately actionable. This is also absurd. No one should go into any experiment with the thought of exiting the experiment with all of the tools in hand needed to build or innovate, or create, or market.
The whole point of research is experimentation. To test, and to often sequentially fail. We conduct experiments to prove or disprove an hypothesis, an assumption, a hunch. My old marketing research professor Russell Haley used to quip, “In business, all you have to be is right”. But what if you're not? Do you want to shoulder that risk?
If in testing an hypothesis we conclude that something doesn’t appeal to consumers, or isn’t a success, or fails to meet an action standard, that doesn’t mean that research was a useless exercise. That’s entirely the point of research!
We should be failing forward, failing repeatedly, and hopefully failing faster to get us to the next opportunity awaiting us!
If we are failing forward, then we are in a continuous future-seeking mode to identify opportunities to innovate. This could be a new product or service; new opportunities for distribution; new markets, segments, or usage occasions; or other activity focused on delivering products and services to the marketplace.
Peter Drucker famously said that all companies have two functions: innovation and marketing. Innovation implies experimentation, and experimentation will certainly produce some results that are undesirable or unexpected – and they will be classified as “failures” – which is, again, missing the point entirely.
If we do not stay objective about what it is we are trying to do (in testing, experimenting, and conducting research), then research is always burdened with an emotional weight it does not deserve. In the same way, if research is improperly designed or executed, or if the research function is improperly staffed, research itself will fail much of the time. Our goal is to immunize the research function from the results it delivers.
The outcome that we desire is for research to simply be the playing field by which a marketing variable can be objectively evaluated, devoid of emotion or prejudice. This is much harder than it seems. Research can be conducted to confirm a decision that has already been made, or to attempt to settle an argument. Under these constraints, research has no possible chance of succeeding. When this happens, neither side really believes in research.
Innovation and marketing, and by extension insights and research, are critical interpreters in all well-run organizations. So don’t be afraid to fail. Fail forward – and keep going.