Why Market Research Can Make Us Mediocre
When companies run market research, they often overlook insights that showcase their strengths, obsessing instead over the insights that reveal their weaknesses.
This behavior isn’t surprising. Evolution has wired us to focus on the negatives rather than positives. If someone compliments you but another insults you, it’s the insult that sticks.
The problem with focusing too much on improving weaknesses is that when everyone does it, everyone becomes average.
A great explanation of this phenomenon comes from Harvard Business School Professor Youngme Moon in her 2010 book, Different: Escaping the Competitive Herd.
Consider two car companies, Jeep and Nissan. For years, Jeep built a brand around rugged, 4X4 SUVs. Nissan, on the other hand, became known for its economy and reliability. Both are great, albeit very different, attributes that are equally valued by their respective customer bases. So what do these car companies look like today?
Moon points out that when car companies use market research and standardized metrics to compare themselves, lagging car brands race to catch up on their deficiencies. Nissan becomes more rugged and Jeep becomes more reliable.
“Multiply this effect across all of the other dimensions that SUVs have come to be measured against—gas mileage, safety ratings, comfort, and so on—and the cumulative effect has been a gradual homogenization of the offerings within the category over time”
For consumers, competition between companies is usually good, it raises the average quality of all products in the category, making it easier to get a product that won’t be bad. For companies, however, this is the beginning of the end. Counterintuitively, the more companies compete, the more they become commodities.
While customers benefit from competition, it can make it hard to tell the difference between products. Do I get the rugged and reliable car with the Jeep logo or the Nissan logo?
The best companies avoid this trap by doubling down on their strengths. If you’re known for rugged rides, ask yourself how to become unrivaled along this attribute, rather than how do you compensate for deficiencies in other areas. The same goes for the attribute of reliability, and any other attribute for that matter.
Market research, then, is a tool that, when used correctly, is instructive. But when used incorrectly, it can be catastrophic for brands, leading them toward a path of mediocrity.
The proper way to use market research is to understand what you’re best-in-class at and then to prioritize reinvestment and divestment.
Ignoring weaknesses and doubling down on strengths may seem straightforward enough. It’s not. Again, we’re not wired to do it. It’s hard to stick to your convictions and be okay with your product not being for everyone when your competitors appear to be growing fast by imitating others.
You don’t need everyone to like your product to be successful. You just need the ones who do like your product to really like it.
Want more like this? Read Different: Escaping the Competitive Herd by Youngme Moon and make sure to subscribe to my blog.