Sometimes the information has a direct impact on product development. Boyle might discover that a prototype is simply too unwieldy for small children or is not particularly enticing. But more often the information provides only hints into a child's sensibility. "You never know where the next blockbuster will come from," says Mandelbaum. "There's no formula, but if you work with the kids long enough, you start to develop a kid sense."
The focus play groups have another distinct advantage over traditional focus groups: payment. Whereas most companies must offer focus-group participants some incentive, Boyle and Mandelbaum reverse the charges. The play group is a valuable service for which parents pay $30 per child. "In the beginning it was actually a line of revenue on our P&L," says Mandelbaum.
The play groups have had a positive effect. In an industry in which designers come as fast as they go, Skyline has licensed 70 products and grown to eight employees. The company expects revenues of $5.7 million over the next two years. Today the duo isn't as dependent on the play-group cash to make payroll. Last January the $50-million product-development company IDEO, based in Palo Alto, acquired Skyline as an independent subsidiary.
For other entrepreneurs, though, the action can't be caught in a passing glimpse. When the shopping is hectic and consumers are in and out of a store in minutes, critical experiences can be lost forever. Here's where a video camera has value beyond your child's birthday party.
Consider Judy George, the CEO and founder of Domain Stores, a fast-growing $50-million chain of 23 furniture stores headquartered in Norwood, Mass. George has been a presence in her local stores for more than 10 years. But on the bustling floors, she can overlook the subtle nuances of the shoppers' experience. "People know me here, and I can get very easily distracted," she says.
Although she had previously operated video cameras in the stores on her own, George recently hired Grid II, a market-research firm based in New York City, to place one camera in her Short Hills, N.J., location for just six hours. The Short Hills location attracted picky customers, and it was far afield from George's home turf in Massachusetts, where customers were bound to know her. Later, in the privacy of her home, George pored over the tape. And suddenly, she saw something that more than 10 years of experience had not revealed: people shop for furniture in twos. Of the 1,034 customers who entered the store, 954 came in pairs.
Upon further examination, George recognized that many male customers were visibly ill at ease amid fluffed pillows and floral duvets. "The typical customer needs to be in the store for at least nine minutes to feel comfortable enough to buy," says George. "But if the spouse or boyfriend pulls her away too soon, we lose out on the sale." In the coming months, George will retrofit her 23 stores with entertainment centers where sports fans can watch live events via cable. Now, however, she might face a new problem: who would take her spouse or significant other to a place where he can watch the very thing she's been trying all afternoon to pry him away from?
But in-store observation offers only half the story. For the rest of the picture, entrepreneurs must be willing to take the cameras into the kitchens, the living rooms, and even the bedrooms and bathrooms of their potential customers. But you've gotta have the guts to enter.
When Kelly Franznick asks end users of his product if he can place a tripod-mounted video camera in their homes, they raise their eyebrows. "Customers typically agree once they learn about my purpose," says Franznick, who is the user-research manager for Lexant, a Seattle-based start-up with projected 1998 revenues of $5 million. The company sells health information, such as stress-management and smoking-cessation tips, to large employers and insurance corporations. The companies then pass the information along to their employees or agents. Lexant offers the product, called DoHealth, via the World Wide Web, in print, or by telephone counseling.
Franznick's in-home footage shows him not just how customers use the product but also how they live. In a recent study of customers using the DoHealth Web site, Franznick placed video cameras in the computer areas of five homes. With just a small number of participants and only about 36 hours' worth of taping in each house, Franznick began to answer a number of nagging research questions: What time of day did people access DoHealth? What other computer activities were completed before or after users accessed the on-line service? What else was happening in the room when they were on-line? What pulled them away from the computer?
And perhaps most important, the tape uncovered problems that might have otherwise gone unnoticed. For example, Franznick saw that on-line users became frustrated when they couldn't click from the bottom of the page to move forward or backward within the site, but he also saw that they had invented their own solutions, or work-arounds, for the problem. They simply scrolled to the top of the page and then clicked onward. "That's the sort of thing that might never have been revealed in a survey," says Franznick. It wasn't a tough problem to solve. Lexant's Web master simply added electronic links to the bottom of the page.
That was just one of several ideas the videos revealed. Franznick has developed a method for moving from idea to reality: After he's identified patterns among users from viewing the videos, he sketches out potential solutions or new products. The Web-site study yielded more than 25 penciled drawings. Franznick then presents the roughs to the designers and developers, who quickly estimate the costs in time, money, and resources. The objective is to pick the ideas that will give the greatest bang for the buck.
