How do you find out what customers really want? After nine successive new-product failures, Jim Balkcom was ready to try something radical

Using customers to help develop new products, experts warn, is a dangerous proposition. Often their advice will take you nowhere. Sometimes it can lead you catastrophically astray.

The folks at Techsonic Industries don't buy it. After years of new-product failures, they decided to listen, to bet their business on the questionable art of the focus group. Now, they say they can do no wrong. -- J.H.

It wasn't that Jim Balkcom minded being dependent on somebody else to develop products. After all, he was hardly the most likely candidate to be running a company that made sonar devices for fishermen. His own preferences ran to golf. He hadn't graduated from Harvard Business School with his heart set on following the bass to Eufaula, Ala., and he knew perfectly well he'd never be his company's chief inventor. Still, he felt a little uneasy relying on Yank Dean IV's skills to keep the business afloat. With good reason. Dean had been dead for six years.

Luckily for Techsonic Industries Inc., Dean -- the company's founder -- had left behind a product with a life of its own. He had built the Super 60, a sonar fish finder with features only someone who grew up on the banks of Lake Eufaula could have conceived. Using military-grade connectors and components, Dean had created a waterproof housing and added a thin-line bulb, making it easier to read. He'd insisted that Techsonic offer a three-day repair guarantee, empathizing with the anxiety of a fisherman in fear of missing next weekend's tournament. Dean's eye for detail did not go unappreciated. As late as 1983 the Super 60 was accounting for 97% of the company's $11.5 million in sales. Six years after Yank Dean's death, Techsonic still could sell almost no product but his.

It wasn't for lack of trying. As soon as Balkcom assumed the presidency in 1977, he forged an ambitious long-range plan for the $2-million company: by 1979 sales would hit $6 million, he projected; by 1984 $20 million; by 1985 he would be heading a $31-million concern. How did Balkcom intend to grow so fast? "New products," he recalls. How, exactly? "We'd try a little of this and a little of that and see what worked."

His mistake was assuming that something would work. Between 1977 and 1983 the company came out with one new product a year, sometimes two. Nine in all, as best as Balkcom can recollect. Most of them flat-out disasters, me-too products that blew apart or stopped cold or capably solved a problem nobody seemed to have. After each failure, Balkcom and his managers found themselves again gathered around the Super 60, praying for its eternal health. "Every so often we'd ask ourselves, 'What's going to happen if the Super 60 goes away?' " recalls Al Nunley, now vice-president of marketing. "The answer would be 'We're going under. That's what.' "

Not if Balkcom could help it -- which by 1983 was an ocean-size if. The Super 60, no longer state of the art, was competing mainly on price. Investors were making noises about retrieving their money rather than watching margins sink slowly from view. "Our future did not look too bright," Balkcom recalls. "We needed to go through some serious self-analysis."

With his top executives and advisers in tow, Balkcom soon emerged with a product-development plan so radical that he himself admits, "I might not have done this if not for the failures." Not only was the plan expensive, but it challenged basic assumptions about the roles of suppliers, managers, advisers, and -- most of all -- customers in developing new products. Techsonic was going to give new meaning to the term market driven.

If it worked, Balkcom could stop hanging on to Yank Dean's legacy for dear life. "If it didn't," he says, "we'd be gone. It was either do this or disappear."

The most successful products are born of gut feelings seasoned with some industry knowledge. Who knows better what the giftware industry needs, for example, than a former department-store buyer?

Maybe no one. And maybe that person will come out with a product that takes the industry by storm. Then what happens? Perched atop a company, the original visionary can't see the market as clearly anymore. Or arrogance clouds the view. Sometimes entrepreneurs just run out of gas. Or die.

Who knows whether Yank Dean IV would have milked the Super 60 or topped it? By all accounts, he was perfectly happy to have built a $2-million business and felt little urgency about expanding Techsonic's market either above the Mason-Dixon line or into other products. Not that he should have felt rushed -- the company's pretax margins were in the 30% range. Not bad for a product that Dean had created by one-upping the competition a bit and incorporating the suggestions of some fishermen friends.

Dean's management style would have been difficult for anyone to imitate. He kept costs down, for example, by ordering enough supplies for at least six years. Mysteriously, he named the product Hummingbird. Then he dropped the g because Humminbird was easier to trademark. It was not at all uncommon for the chief executive of Techsonic -- who often wore jeans and big wooden beads -- to crawl under a customer's boat to figure out just what, exactly, was ailing that transducer.

Dean was not exactly the kind of person that Jim Balkcom had palled around with either at West Point or in business school. But in November 1976 Balkcom, who had spent three and a half years in banking, accepted Dean's offer to become the vice-president of Techsonic. In archetypal fashion, the balding Balkcom would be the professional manager, while the bearded Dean would go off in hot pursuit of exotic ideas. Eleven months later Dean's heart failed him while he was jogging. By the time Balkcom got to the hospital, the 42-year-old Dean had been pronounced dead. Gone were the gut feeling and industry knowledge that had created the Super 60. Gone was the company's only engineer.

But Balkcom had big plans for pushing Techsonic beyond its estimated 10% market share. At first, he unsuccessfully tried repackaging Dean's products for other distribution channels. Then he acquired a plastic-worm company, a forgettable venture except for his hiring of former West Point classmate Tom Dyer -- who later succeeded him as president when Balkcom became chairman -- to help manage the acquisition.

Balkcom also hired a couple of engineers and set them to work enhancing Dean's product. They tried. And tried. One model featured a motor that rotated at 4,800 revolutions per minute. Bulbs popped off. Disks flew out into orbit. Another experimental product could operate at six times the depth of most fish finders -- a great feat, if only people fished that deep. "We were developing in the lab, not the market," Dyer recalls.

By the late 1970s Balkcom decided it was time to move into new technologies, a step his competition, unfortunately, had taken a year earlier. All fish finders work on the same basic principle: a transducer sends out a sound signal to bounce off whatever's below, be it a fish, a log, or a Budweiser can. Dean's flasher-style depth sounder interpreted that signal via flashing red lights. Between 1979 and 1982 Balkcom poured money into new, expensive paper-chart recorders that used a stylus to draw a picture of the bottom, like an electrocardiogram. Techsonic came up with four models, all of them -- to quote an executive -- "half-dead dogs." Half? "They were a series of mistakes," Nunley says. "There was no innovation, no ingenuity."

After each fall the Super 60 was there to catch them. By signing up more reps in other parts of the country and selling through such mass outlets as Wal-Mart and Bass Pro Shop, the fishing-tackle catalog, Dyer kept the company's sales increasing. Revenues grew from about $6 million in 1978 to nearly $9 million in 1979 to $11.5 million in 1983. By then the company's five principal investors worried that Balkcom's dismal record with new products was endangering any future the company might have. "They were starting to say to themselves, 'It may be time to reap before things get any worse,' " Balkcom says.

How fortunate, then, that one of Dyer's projects led him to meet Barry Huey, president and chief executive of a small advertising agency in Birmingham. Dyer had been looking for someone to help him upgrade the company's packaging, which consisted of a dreary plain-brown box with a four-color stick-on label. Huey came up with a three-color box with a picture and information -- at half the cost. Impressed, Dyer asked Huey for help designing ads, which the company placed sparingly in fishing magazines.

OK, Huey said, tell me why people choose a Humminbird?

Dyer thought for a moment. Because it's waterproof, maybe? he offered. And they like our service policy, I think.

What features really matter to them? Huey asked.

Don't know, came Dyer's reply.

What magazines do they read?

Couldn't tell you, Dyer said.

It went on and on that way. How old are they? A shrug. How much can they spend? A guess. How often do they fish? A blank stare. What do they want? Silence. "It's time to do some research," Huey concluded.

He proposed that Balkcom commit $20,000 to have a marketing consultant he knew hold some focus groups with fishermen. You've got to find out what the hot buttons are, Huey argued. You need input from consumers. "I figured, Of course, your advertising agency is always going to tell you to spend more money on marketing," Balkcom says.

But Huey didn't let up on Balkcom or Dyer. He brought it up on the golf course at Shoal Creek. In the men's room at the restaurant in Eufaula. "It took some arm-twisting," Balkcom admits. Huey saw not only a company with potential -- "These were not sleepy guys," he says -- but an industry just waiting to be dominated. Despite industry revenues of roughly $55 million, nobody used any marketing tools. Balkcom wasn't sure he wanted to be different. "If you're going to invest money, you think about what you'll have when you're through," he says. "Spending money on this, all you have is a folder with some stuff in it. It's not an asset, like a mold."

Nevertheless, with investors breathing down his neck and profitability dropping like a downrigger, Balkcom began to soften. He was running out of choices. And time. "We needed to do something different," he says. "Quickly."

The next time Huey started his pitch, Balkcom interrupted in his Atlanta-bred drawl, "All right, let's give this thing a shot."

Within months Balkcom would regret his decision. He was crowded into the company conference room, staring at what had to be the most expensive sheet of paper in the country. Twenty thousand dollars, and there weren't even complete sentences on it. Just phrases, each with a ranking, number 1 through number 45. And it didn't make any sense.

Number 1 was "sunlight." What would number 2 be -- air? Still, he sat patiently as Sue Symons, a marketing consultant from Atlanta, handed out copies of her report, which included 94 other pages -- a packet each to Dyer; Nunley, then marketing manager; Bob Gibson, director of engineering; Huey; and Erwin Brown, a former executive vice-president of electronic and information technology at 3M Corp., who served on Techsonic's board. Symons's methodology was unusual. She called it "vision interviews," but it sounded more like past-life regressions. One-on-one, she had asked fishermen, reclining in easy chairs, to tell her about their most recent fishing experience.

With a tape recorder rolling, she prompted them with questions. What was most frustrating? What was the most interesting thing that had ever happened? Traveling to Nashville, Atlanta, and Dallas, she hired local field services to screen potential subjects. She wanted people, she decided, who owned boats, fished at least 30 times a year, and had been reeling them in since they were kids. They talked about the solitude, about the struggle of man versus fish, about the camaraderie with their buddies. With her nudging, they talked about depth finders: what they liked, how much they spent, where they bought them. Then she had the tapes transcribed and analyzed the contents, searching for oft-repeated verbs and common emotions.

From that data, Symons designed questions for a more quantitative telephone survey. Using names from fishing- magazine subscription lists, she oversaw about 1,800 interviews. Then she employed cluster analysis -- lumping the answers together according to psychological or demographic factors -- to come up with a ranking of problems consumers had with their depth sounders.

Sunlight? The number-1 problem, according to Symons's research, was that fishermen had trouble reading their fish finders in bright sunlight. "We really had no idea how important that was," Balkcom says. Complaint number 2 wasn't exactly peripheral, either: fishermen found their fish finders too complicated. "Our conventional wisdom," Balkcom says, "was that fishermen liked to press buttons." Wrong again.

The list was as revealing for what it showed as what it didn't show. "There were things we had worked hard on that nobody seemed to notice," Balkcom says. Rarely was heard an encouraging word about Humminbirds being waterproof. And to splash saltwater into the wound, hardly anybody mentioned the company's three-day service guarantee. "We wanted to say, 'Gee, we're good . . . don't you folks know that?' " Balkcom says.

Beyond that, neither Balkcom nor his coterie of advisers could figure out how to respond to the data. If they think flashers are difficult, Huey suggested, maybe our ads should stress Humminbird's simplicity? Perhaps, Dyer offered, we could compensate by writing a lucid instruction manual.

Great ideas, but how did they know which one would alter consumers' perceptions? What, exactly, were they supposed to do with this newfound knowledge? "You can take this stuff and process it into a new product, or you can process it right into the trash can," Dyer says.

The distance between having this information and using it is wider than the mouth on the average trophy bass. It's not unusual for companies to fail to integrate what they hear from consumers into decision making. Sometimes the CEO flinches at spending the money to turn the implications into strategy. Or no one has the vision to translate the information into action.

It's not as simple as it might look. Everything consumers say has to be tempered with personal judgment. For instance, a group of interviewees can be affected by what one expert calls "the loudmouth factor," familiar to anyone who survived seventh grade. One participant bullies the others into agreeing, so that there appears to be a consensus when there isn't. Such factors make integrating consumer input as precise a science as, say, the study of chaos.

But Techsonic's situation -- creeping up on desperate -- put management in a good position to pay attention to new ideas. On February 17, 1983, Balkcom, Dyer, and Bill Moorer, vice-president of operations and chief operating officer, had proposed a leveraged buyout of Techsonic. They knew, Balkcom says, that breathing life into the company would take some dire measures. Talking to consumers would be expensive, as would designing new products. To take that risk, they wanted more than token equity. And the investors had never been too keen on reinvesting earnings. After several months of negotiating, Balkcom got them to agree on a price that was roughly 30% higher than what he had hoped to pay. Or rather borrow, since bank loans comprised about 90% of the purchase price. "After the LBO was done, the three of us looked at each other and said, 'Do we really know what we're doing?' " Dyer remembers. "The answer was no."

One thing they were doing was spending a lot of money. By November 1983 Balkcom had to go to the bank and plead for an advance of $400,000. Much of that, he figured, would go toward paying Symons. A visit to one city, where she would hold two focus groups, could easily run to $6,000. The quantitative phone surveys cost, on average, $30,000. Then there was Huey's time and the costs of sending company executives to study different technologies and listen to customers.

They had already made some pretty fundamental, if radical, decisions. Consumers seemed to like the graphic representations that chart recorders provided, but they couldn't see these finders in sunlight either. They also wanted something easier to use. "We couldn't go after every problem," Dyer says, "so we decided to focus on those."

A group met regularly in the summer of 1983. Brown, the 3M veteran, urged the executives to consider finding a new technology that would overtake their competitors.

How about cathode-ray tubes? Too big.

Can we use thermoluminescent displays, like the ones in car dashboards? They wouldn't withstand the temperatures.

Hmm, Huey said, how about waterproofing a paper-chart recorder? Not technologically feasible, Gibson replied; it's probably not possible for two years. Then forget it, Dyer interjected; I want this in six months.

On one end was Dyer, always pushing for an ultrasophisticated unit, one that moved paper electronically and zoomed in on targets easily. On the other side sat Brown, his warnings to keep the price down sounding like a constant backbeat. "Don't forget your place in the market," he'd repeat. "You are the 'flasher' people. You have an image in that end of the market." The give and take was not always genteel. "Everything got spit out," Dyer recalls. "We were hollering, but we were also listening."

By the fall of 1983 they had decided that the future likely lay in liquid-crystal displays, which were popular in digital watches. At Brown's suggestion, Nunley was dispatched to become an instant expert. Techsonic was in serious negotiations with Hitachi by early fall. The "Japanese General Electric," as it's sometimes called, had recently opened an office in a Chicago suburb and was looking to build some business. Though mystified by the use of sonar to pinpoint fish, the Japanese appreciated the development fee, as well as the $1.5-million order for 50,000 pieces.

Borrowing an innovation from camera makers, the group also decided to add an automatic mode to the fish finder, making it simpler to use. Balkcom was intent on introducing the product at the big industry trade show in July 1984. "I was planning that product as if the technology were right there," he says. "Because if it wasn't, we wouldn't be there for long, either." If this R&D effort didn't lead somewhere, the bank would certainly run out of patience. "With this," Balkcom adds, "we were putting our chips on the table."

Watch Sue Symons at work, and you'll have no trouble believing that she was once a high-school English teacher. There she sits, in a sterile white room at a long table, surrounded by men dressed in casual clothes, mostly jeans and plaid shirts. You know, one man is saying loudly, you can tell the species of fish by the angle of the transducer. No, no, no, another interrupts, you can tell by the shape that appears on the paper. Those wall-eyed pike are always poked up. Symons is quietly chomping on her tongue. They're both wrong, but that's beside the point. She's happy just to keep them talking. They're more constructive than the man who offered to buy 10 fish finders "if only you would come out on the boat with me, darlin'." Not to mention that fellow who showed up stinking of Jack Daniels.

Aah, the glamorous world of consumer focus groups. In late 1983 Symons went to an Atlanta focus group with a taupe-colored wooden model of the "mini-thing," as the company's memos referred to its top-secret product, and a short videotape showing what the screen would look like. The model, with its glued-on knobs and faces, was especially important, because Techsonic was planning to introduce a new technology. Describing it wasn't enough. Who knows what each person would be imagining? Symons passed the model around and showed the videotape. Then she asked questions, which she had prepared with Nunley's help. How would you use it? she asked. How would you describe it to a friend? Later she interviewed groups of 8 to 10, both flasher and chart-recorder owners in Boston, San Diego, Chicago, and Tampa. In early 1984 -- as the first working model was being tested in Lake Eufaula -- she moved on to Dallas and Minneapolis. Participants were paid $25 to $35 for the 90-minute sessions. She did not tell them which company had created the product.

While Symons sat in the midst of things, nodding and playing it dumb, Dyer, Huey, Nunley, and sometimes others sat behind a one-way mirror watching the proceedings. "It gets uncomfortable back there," Nunley says. "They say exactly what you don't want to hear." Some consumers, for instance, parroted competitors' negative claims about Techsonic products. All the while, Symons prods them: tell me more about that. I couldn't quite follow that. "The men spread their feathers for her," Dyer says. If they won't talk -- often the case in the yup-nope regions of the upper Midwest -- she reminds them that they are being paid for their opinions. At the end, she'll excuse herself, then scramble to the other side of the mirror to see if the others want her to ask any questions. Find out more what the guy in the red cap meant by condensation problems, one of them might ask.

Again, they heard about how much difficulty fishermen had with their fish finders. Clearly, many were using their depth sounders to find status, not fish. Looking at the model, they complained that they wanted buttons that clicked, so they could tell while wearing gloves if they had hit them.

But there were some big surprises. Going in, the executives had assumed that their new product would replace flashers. They were, after all, out to make their own Super 60 obsolete. Would you take your flasher off when you put one of these on? Symons asked flasher owners. Oddly enough, the overwhelming majority said no. Well, maybe chart owners would consider this a better value. Unh-uh, they said. "It perplexed us," Nunley recalls. "Suddenly, we didn't know what the heck we had."

Whatever they had, it looked like a surefire hit -- especially given the results of phone interviews: 46% had told Symons they would be "very" or "somewhat" interested in such a product, if it existed. By standard marketing measures, 30% ensures a successful product. Maybe fishermen wouldn't replace their current fish finder, but they apparently wanted to use the two styles together. "We heard people saying, 'It's not a chart recorder, and it's not a flasher, but it sure is neat,' " Symons says.

When she relayed her findings to Dyer, he was suspicious. "I did not want to leverage an already highly leveraged company on 48 guys saying, 'That's neat,' " he says. So Symons isolated the characteristics of those who expressed interest in buying the product. Then she plugged that into total market data.

When she was through, she had some shocking news. "You are going to sell 120,000 of these," she told Dyer. He quietly reminded her that in the company's best year, it had sold 96,280 units. How clearheaded was it to think that a completely new product, in its debut year, would outdo the Super 60? "I said, 'Sue, you're great, but there's no way,' " Dyer recalls.

Dyer and Nunley then had worked out their own predictive models based on, well, uh, good old-fashioned Eufaula horse sense. A new product would probably sell one quarter as much as the old product in its first year, Dyer decided. So his prediction settled at 25,000. Nunley felt 17,000 would be more in order. In the spirit of true fishing chums -- which they weren't -- they compromised at 22,000.

A month or so before the July show Dyer and Huey unleashed a campaign to bait the distribution network. Huey, along with others at his agency, had sat and watched videotapes of the focus groups. Then they had come up with the slogan Bridging the Gap -- between flashers and charts. It was a classic marketing ploy that came straight out of the focus groups: consumers perceived the new LCR (Liquid Crystal Recorder) as offering paper-chart quality at flasher prices. "We created a gap, and we filled it," Huey says proudly. In June 1984 he bought special double-gatefold ads in the industry's top two trade magazines. Neither of the magazines had any idea how to print them. Huey had to bring in examples of auto-company ads. "The creation of a new generation," the headline read. The copy noted almost point for point problems that had been raised at focus groups. Techsonic also spent $85,000 on a new black-and-yellow trade-show booth, with closing rooms, overhead lights, and -- borrowing a ploy that Dean had used to sell the Super 60 -- a unit submerged in an aquarium.

On July 26, 1984, at 10:00 a.m., when the American Fishing Tackle Manufacturers Association show opened in Atlanta, the Techsonic booth was "wall-to-wall people," Nunley recalls. The company even held a press conference, and more than 300 reporters showed up. Straining to be heard over the 2001: A Space Odyssey theme, Huey presented market research that showed why the LCR could not fail. "We wanted everyone to know that we were not taking a swing in the dark," Balkcom says.

They took the industry by surprise. "It was a tremendously big breakthrough," recalls Dave Ellison, editor of Fishing Tackle Retailer. "The technology changed overnight."

As did life in the headquarters at Eufaula. The factory expanded to two shifts. Then three. Instead of 50,000 pieces, Dyer was begging Hitachi for 150,000 pieces -- in half the time. Even so, he had to ration product. As soon as possible, the company built a 17,000-square-foot facility next door. By the end of fiscal 1985 Techsonic had sold 140,000 units. Sales hit $31 million, more than two and a half times 1984 sales. Techsonic had broken the grip of the Super 60; it represented only 25% of unit sales.

Dyer figured the company had one year before the market would be flooded with imitations. He was determined "not to start believing our own BS," and he knew exactly how to prevent that. "Now," he says, "we had a secret weapon."

By spring 1985 Symons was back on the road, holding focus groups with people who had bought LCRs. Using names from warranty cards, she traveled to all different regions. "We were stupid enough to think that if this worked for us once, it could work for us again," Dyer says.

To follow up on the LCR, they handed product development back to the people who seemed to do it best: consumers. This time, they heard one comment surfacing again and again like the shark from Jaws. I have trouble telling the fish from the rocks, fishermen complained, so can you put them in red? "I thought it was a silly thing to say," Nunley recalls. "The first few times, I dismissed it as some goofball." But it became impossible to ignore. At some groups, one person would suggest it, and other voices would agree.

Fish in red? At the company's annual retreat with Hitachi, the Japanese supplier showed them a double-layer polarized display that could indeed color fish red. Symons returned to the focus groups to test some working models. Should the red dots flash? Should they be different shapes for different fish? What about a small fish in red, a bigger fish in black, and the biggest fish in both? No, consumers said, we want the bottom in black, the fish in red, and the biggest fish in both. This time, in 800 phone interviews, 32% said they were very or somewhat interested in the product -- still enough to make it hot stuff.

Once again, Huey used the focus groups to create ads. The copy, for instance, referred to the 4-ID, as the new product was named, as a "red-dot" unit. In truth, the recorder shows tiny red squares, but consumers in focus groups kept calling them dots.

Not surprisingly, more and more competitors were jumping into the market. Where there had been 10 manufacturers a year earlier, there were now 25. They were lured, if you will, by the prospect of a growing market. For nearly three years, about 50% of the people who purchased LCRs were first-time buyers. "After the liquid crystal was introduced, the market just exploded," says Bill Bogan, vice-president of marketing at Computrol Inc., which started making Bottom Line fish finders in 1985.

The 4-ID enabled Techsonic to keep its lead. Spending about $2 million to advertise in such mainstream publications as USA Today, the company sold more than 100,000 units its first year. Techsonic finished fiscal 1986 with a "very profitable" $56 million in sales -- $1 million more than Dyer had estimated the whole market size to be just five years earlier.

Pretty soon, competitors came out with variations on the fish-in-red theme. Some had dots that flashed. Others offered fish-shaped drawings. "We saw margins starting to erode because of the me-too products," Balcom says. One model, for example, that sold for $319 in 1985 sold for about $200 by 1987. No one has to guess where Techsonic looked for new ideas. "We listened to them again," Dyer says. "Hey, it hasn't led us wrong yet."

In August 1988 Techsonic replaced its LCR product line with a TCR product line. TCRs operate at 455 kilohertz, instead of the standard 200, and offer better resolution. They're also menu driven, hence easier to use. And the TCR snaps into its mounting like a rechargeable razor, with buttons that are easier to hit. "It's not as big a step as some of our other products were," Huey notes. The company revamped its trade-show booth once again, making it sleeker, with softer colors and a wall covered with 16 televisions. Huey outdid himself by purchasing pop-up ads, at about $75,000 for two pops, in the major trade magazines.

"Frankly," Symons adds, "we found that there weren't a lot of problems left to solve." A fact best symbolized, perhaps, by noting that the T in TCR stands for absolutely nothing. "We had to differentiate ourselves," Balkcom says.

Consumers, it seemed, had taken Techsonic about as far as it could go.

As military men -- they both served in Vietnam after West Point -- Balkcom and Dyer tend to identify with their bosses. These days that boss is the consumer. And their allegiance isn't going to change, no matter what the competition does. "This is our mind-set," says Balkcom. "It's our culture."

Word in the industry has it that some of Techsonic's competitors are starting to use focus groups, too. "We want to get more in touch with who our end users are," Computrol's Bill Bogan confirms. "We think their input will help us."

Indeed it will, if Balkcom's experience is any indication. Thanks to consumer input, Techsonic's executives drive around in Porsches and BMWs. If Barry Huey is down from Birmingham, you can find his black Jaguar at the local Wendy's, with a license plate that reads HUMMIN. Since he started working with Techsonic, his agency has grown from $2 million to $16 million.

Nobody expects the fish-finder market to triple again, as it has in the past five years. Techsonic, which only grew about 15% to more than $70 million last year, has been looking for other businesses to expand into. How will it decide? "We're asking fish-finder buyers about what else they buy," Balkcom says. At one point, Symons asked about cellular phones on boats. Her conclusion: no big problem with what's already on the market, thus no great opportunity. Later she zeroed in on marine radios. Turned out there were complaints about durability, security, and antenna operations. Techsonic introduced a radio, its first non-depth-sounder product, in August. Balkcom is also casting about for acquisitions. "Our value added is the ability to listen," he says, estimating that the company has spent nearly $1 million on market research over the past four years.

Future research on fish finders may take place more in the lab than in the market, because "we are trying to make a quantum leap in ease of use or ease of interpretation," Balkcom says. "We're still focusing right in on what the consumer said." Balkcom has doubled R&D spending in the past few years. Last year, to make Techsonic harder for competitors to touch, he tightened the guaranteed repair policy to just 24 hours.

"Staying number one is a lot tougher than getting there," he says. "If our competitors start using focus groups, they are going to get smarter.

"I've seen plenty of giants fall in my time," he adds. "There's nothing guaranteed about this. We listen to what people tell us. We never know what they are going to say. One of these days they may tell us they are taking up golf instead of fishing. There is no magic to this. None."


If listening to customers works, why not listen to suppliers and employees, too?

Since listening to consumers has worked so well, the folks at Techsonic Industries Inc. have opened their ears to others as well. "We don't think we have all the answers," says Tom Dyer, president and chief executive officer. "So we are very willing to listen." In addition to launching customer focus groups, the company has put in place formal programs for getting feedback from suppliers and employees as well.

In 1985, while coping with runaway demand for its new line of depth sounders, Techsonic decided to start holding annual meetings with its biggest supplier, Hitachi Ltd. "Our volumes were exploding," says Al Nunley, vice-president of marketing. "They needed more information to plan better." Techsonic talked about sales, profits, and marketing plans. The two companies discussed such questions as: where do we go from here? What technologies does Hitachi have under development that Techsonic might use? How can we drive costs down to keep our prices low and protect our market share?

The strategy worked so well that Techsonic soon started holding miniconferences with other groups of suppliers, such as plastics vendors or connector suppliers. Consumers are complaining about the feel of our buttons -- do any of you have any ideas? they'll ask. For the first time this year the company went further by inviting about 70 suppliers to Eufaula for a couple of days. "The more they know about our thoughts and feelings, the more they can help us," chairman Jim Balkcom says. "They get emotionally involved."

So do the associates at Techsonic. Employees are heard from through forums such as the Error Cause Removal Committee, which makes wide-ranging recommendations, and the Clean Team, which monitors neatness. Once a month all 400 employees get together to give out awards and hear management's responses to their written suggestions. "It's an open atmosphere of discussion," Balkcom says. "It makes us vulnerable. You've got to dignify every individual. We do that by listening."