Market research essentials for product managers

Today we are talking about the knowledge area called market research. How do you know that the product you’re developing will actually create value for customers, that they’ll love it, and that they’ll buy it? Have you done the right things to have confidence of these outcomes, or are you wishfully guessing? You need confidence.

That is why Andrea Ruttenberg, PhD, is joining us. As an associate principal at Applied Marketing Science, she has helped numerous clients conduct customer research and make critical business decisions—the same decisions you need to make, and this episode will help you move from guessing to confidence.

Summary of some concepts discussed for product managers
[6:08] What tools or processes do you use for customer research?

The bread and butter of what I and my firm, Applied Marketing Science, do is Voice of the Customer (VOC). We define VOC as it’s described in an article called Voice of the Customer written by my co-founder John Hauser and his then-graduate student Abbie Griffin.

Voice of the Customer is a systematic, thorough process that starts with qualitative interviews to understand customers’ needs. Needs mean customers’ problem, pain points, or things we can solve for them. Needs are not solutions. Voice of the Customer research means going to customers to deeply understand their perspective on problems we can solve for them. It’s our job to fix those problems for the customer.

The VOC process has three main parts:

1. Talking to customers in focused interviews.
   
2. Analyzing transcripts and identifying unique needs.
   
3. Doing a quantitative survey to understand how important each need is and how satisfied respondents are with it.
   

[12:49] How many customers do you need to talk to?

Our gold standard is 30 interviews. That’s when we start to hear nearly 100% of customers’ needs. At AMS we do a systematic, labor-intensive, time-intensive, in-depth VOC process. However, that’s not always necessary. There are times when it doesn’t make sense to do 30 interviews followed by 500 surveys. We’ve been focusing on helping our clients understand tools for getting insights in a pinch.

How can you do this VOC process without completing 30 in-depth interviews? Step one is making sure you’re doing it for the right reasons and at the right time. If you’re starting a new product from the ground up, I would strongly recommend a more systematic process. If you’re just doing version 1.2 or you already have a lot of institutional knowledge, you can cut corners and still come up with really good research.

[15:02] Tell us more about your in-a-pinch VOC process.

For our in-a-pinch process, rather than relying on qualitative interviews, we rely more on our own institutional knowledge and sources that are already available, primarily online. Step one is to recruit three to seven colleagues within your organization who have diverse perspectives on your customers and their pain points. They should be from different parts of your organization and if possible also have diversity in seniority and demographics. Avoid folks who are likely to criticize or dismiss ideas and avoid large seniority gaps.

Next do some brainstorming to build a list of your customer needs. Start writing down what your customers’ problems are. We generally have people sit around the table for an hour or two and do a brain dump. Go beyond generalities and define specific pain points your customers have. Ask people to put themselves in the customer’s shoes or walk through a day in the life of a customer. Think about different types of customers.

Next take stock of what you know and where there are gaps in your knowledge.

Then see what you can learn about your customers online. You can find consumer reviews everywhere—Amazon, Walmart, etc. I’m always shocked at all the different places where B2B customers are talking online. For example, a couple of years ago we did a study with snowplow drivers and found many forums online where folks who drive snow plows for municipalities or for their local neighbors were talking about some of their problems and challenges. Find out where your customers are talking online, and read and take detailed notes on what you’re learning. Look for pain points, goals, and aspirations. We are not going to our customers for them to build a solution for us, but it can be helpful to understand what people wish were available and why it’s not available.

Take detailed notes and translate them into needs. Be as specific as possible.

Last, you can use ChatGPT or Bard and write prompts to learn more about your customers’ needs.

Then take stock again. Look through all your unique needs and ask if it feels like things are missing. We might recommend doing a couple of interviews to round things out. Your goal with the interviews is to confirm that the list of needs you’ve developed is comprehensive.

It’s important that you’re actually using your customer’s voice—the language they are speaking. Avoid translating customer needs into internal jargon. With Voice of the Customer, we’re putting on our empathy hat and trying to steep ourselves in the customer’s perspective.

We generally recommend two to five interviews. If you do those two to five interviews and you learn a lot of new information, that might be a sign it’s time to do a more in-depth, systematic VOC project. If the interviews confirm what you already know, you can feel good about your process.

[26:53] What do we do next, once we have gathered customer needs?

You have a couple of different options. I like the quantitative survey because it helps us focus on exactly the right problem. However, we have customers who stop with the comprehensive list of needs, and that can have a lot of value because it reminds you of everything your customers are thinking about.

The quantitative survey lets you identify which needs are the most important but least well satisfied in the market. Those are the needs you want to focus on.

[30:18] How can we know whether to complete an in-depth VOC process or an in-a-pinch VOC process?

There is a time and a place for both of these processes. Systematic VOC research is really important when you have questions about a topic you don’t know a lot about. The in-a-pinch process has its time and place if you need to get to answers quickly, don’t have a lot of budget, already have institutional knowledge, or are working toward a minor upgrade of a product that has already been successful.

Action Guide: Put the information Andrea shared into action now. Click here to download the Action Guide.
Useful links:

• Connect with Andrea on LinkedIn
  
• Learn more about Applied Marketing Science
  

Innovation Quote

“It takes as much time to solve a bad problem as it does a good problem. And if you’re not working on good problems, you’re really wasting your time.” – Griffin, Price, and Vojak in Serial Innovators 

Thanks!

Thank you for taking the journey to product mastery and learning with me from the successes and failures of product innovators, managers, and developers. If you enjoyed the discussion, help out a fellow product manager by sharing it using the social media buttons you see below.