Find Out What Your Customers Really Want
Market research takes many forms, from one-on-one interviews with key customers to large-scale mail or telephone surveys. Between these extremes -- and often overlooked by smaller companies that would find it an affordable source of information -- lies focus group research. A focus group allows you to observe the dynamics of the marketplace through the reactions of a small group of carefully selected consumers.
What can 10 people say in an hour's discussion that will help you run your business better? Plenty, asserts Lloyd Pillsbury, vice-president of sales and marketing of the Wintriss Controls Group of Data Instruments in Lexington, Mass. Data Instruments, a manufacturer of safety equipment for automation control, first organized a focus group in 1978 to get outside reactions to a product being considered for development. The product under scrutiny was a load measurement and monitoring device for mechanical power equipment. The real surprise, Pillsbury says, came when the talk turned to price. The group suggested a higher price for the product than the company had assumed people would pay. The device went to market and sold well at the higher price.
The cost for a single focus group generally ranges between $1,200 and $1,800. That includes the help of a market research firm on designing content, recruting the panel, renting facilities, paying participants, conducting the session, analyzing the proceedings, and delivering a report. An average fee for a consumer participating in a session that runs 60 to 90 minutes is about $20. But the pay scale for certain professionals can run as much as $120 for 90 minutes. "To get the type of respondents you need, what you pay may not even be an issue," says Craig Barry, vice-president of industrial marketing research for Yankelovich, Skelly and White in Stamford, Conn."Often, you can't pay top decision-makers enough to get them there. They have to believe that they are going to get something of value out of the process, or else they're just not interested."
Since focus groups are small, the selection process is critical. In some instances, the sample group is easy to define. LaVake Jewelers in Princeton, N.J., wanted to use a focus group to find out what it could do to expand its client base without losing established customers. Names were drawn randomly from customer records.
Cincinnati Microwave, a company that manufactures and markets police radar detectors, decided that it wanted a feeling for the characteristics of the market, a reading on weaknesses in competitive products, and suggestions for new products. It talked with people in three categories -- owners of the company's product, owners of competitive products, and people who had indicated an interest in such equipment but had never made a purchase. The recruitment was handled by Mike Dean of Action Data Inc., a market research firm in Cincinnati. In organizing a group, Dean generally avoids mixing men and women, to prevent what he calls the "peacock effect." When women are present, he says, men often use the session to show off and wind up dominating the conversation.
Dominance by a few participants can be a problem in any focus group. "Generally, about 40% in any group are active participants," says Ron Kelley, vice-president of marketing at Thoratec Laboratories in Berkeley, Calif. "Another 40% are a little more introspective, and it's the moderator's job to draw them out. You could hit the remaining 20% over the head and still not get a response." Kim Wallace of Wallace & Washburn Inc., a Boston-based marketing firm that assisted Data Instruments in its focus group effort, thinks that this silent minority often participates more if they're given a chance to respond to questions in writing before the session starts.
Even more troublesome than nonparticipants are the so-called professional respondents, people who make a hobby of serving on focus group panels -- they tend to lack spontaneity. This problem is most likely to occur when you use an outside firm to recruit from the general public. Some research companies are so anxious to fill chairs that they will call on people they know will be available. Your best insurance is to choose your contractors with care. Wallace suggests that in searching for a research firm you bypass by Yellow Pages and contact the local advertising club or the American Marketing Association, headquartered in Chicago, for the names of firms.
Focus group discussions can take place almost anywhere that's comfortable. What's more important, says Mike Dean, is that the client observe the discussion through a one-way mirror or remote video hookup, rather than read cold statistics on a sheet of paper. In any case, an audio or video recording should be made for later review.
You can also sit in on the focus group. But if you are trying to get an unbiased picture of your product's image in the marketplace, an honest reaction to a new product idea, or straight-forward criticism of an advertising campaign, it may be best to conceal your identity. If your identity is known, you should weigh the extent to which your participation may color the process. Ron Kelley acted as his own moderator in a series of focus groups for Thoratec Laboratories, which has developed circulatory support and respiratory care equipment. The purpose of these groups was to get reactions and suggestions from panels of physicians on several concepts for new products.
Kelley decided to handle this task personally to avoid the time and cost it would take to acquaint a professional researcher with the technology of the products. He believes that companyrun focus groups need not produce biased results, but he does sound a note of caution for potential do-it-yourselfers: "Don't fish for answers if you're not getting the ones you want." Unless you can police yourself and remain objective, you're going to hear what you want to hear.
Objectivity extends to framing questions. The best results come from openended questions that are ambiguous enough to allow for individual interpretation. The strength of the focus group format, as opposed to mail or telephone surveys, is that you can follow up on ideas that emerge from the discussion. "Don't ask people what the think, " says Kim Wallace, "Ask them how they feel. If you ask them to think, they'll try to give you logical answers because they want to be right."
"Feel" is a key word. The information provided by a focus group should give you a sense of the direction your company could go -- not particular, definitive solutions to your problems. "Th danger of focus groups," says Craig Barry, "is that companies assume the results are quantitative and run with them. But focus groups, which allow extnded discussion and an opportunity for demonstration, often provide more dependable information than large surveys. Thoratec, for example, found a vast difference between the price that doctors responding to a questionnaire said they would be willing to pay for an instrument and the price information that came out of focus groups. They chose to believe the focus group response, which was $24,000 lower. The company felt more confident with the reaction of the groups, says Kelley, "because the doctors got to see and discuss the device and had a more in-depth understanding of what it could offer."
The most dependable results of a focus group discussion may be its negative responses. Focus groups, says Kim Wallace, "are really good for finding out whether you have a major problem in a particular area." Gordon Black of Gordon S. Black Associates, a market research firm in Rochester, N.Y., puts it succinctly: "Their best use," he says, "is to help you avoid doing really dumb things."