We all know that new products are the lifeblood of most companies’ futures. And advertising, because of its ability to communicate a consistent brand message over time, is the key brand-building marketing element. So why, depending on which source you believe, do somewhere between 70% and 90% of new products fail and at least half of all advertising campaigns prove unsuccessful in helping to build business?
Internal company discussions often revolve around whether branding and marketing initiatives should be tested, and how. The decision not to test is often based simply on an ongoing trust of the company’s creative, a confidence in management’s ability to “make the right decision,” or the simple desire to not spend the money. If your gut instinct proves accurate time after time, this isn’t a bad place to be. But as the statistics of failure demonstrate, most of us don’t have the capability to constantly outthink today’s consumers, who have become increasingly demanding in their evaluation of new products and advertising claims.
Companies are willing to spend millions on new products, advertising, and promotions. So doesn’t it make sense to submit these to research for an additional few thousands of dollars in order to be able to substantiate whether consumers need or want them?
But the question is not simply “What is the cost of not testing?” We should also be asking ourselves, “What is the cost of not testing correctly?”
Among the questions we face after the fact if proper testing is not done:
* Did you have a good idea to begin with?
* Was it based on a sound consumer insight?
* Did your product deliver the promise of the concept?
* Did you identify the right target audience?
* Did you reach that particular audience with a compelling and interesting message?
* Did you convince consumers to change their current practices?
Companies that have a tendency to consistently execute new products have a research system in place that ultimately offers them the optimal chance for success. Survival does not rest upon an assumption that the correct decision is being made;instead research is in place to ensure that new products and marketing efforts are given every possible chance to succeed.
Both qualitative and quantitative research have their place, but they are not interchangeable. Qualitative research should be used to help find direction. It is perfect for helping companies discover valuable insights or directions for new products or advertising. Quantitative research, however, is the correct tool for measuring the full potential of insights, concepts, products, ads, packaging, and other marketing materials.
Two real issues are on the table here: 1) Why would we not use research to help us understand an idea’s full potential? 2) Why aren’t we demanding the correct research tool to ensure our chances for success?
Unfortunately, we often find that companies test commercials qualitatively in order to choose one campaign over another, resulting in a final decision to move forward a particular campaign based on the personal opinions of 30-40 people in a typical focus group. Companies justify this research as providing them with answers faster and cheaper (four focus groups, after all, cost only around $30,000). Having used this fast and nonpredictive research method, a company will then spend $10 million on media. Does this make sense?
Quantitative screening research provides the ability to test multiple commercials among a large, representative sample, gaining normative ratings (appeal, uniqueness, and the like), communication delivery of benefits and features, emotional appeal, and the ability to get a forced choice for about $35,000-$50,000. At the same time, companies can also receive developmental help if they want it. Timing for quantitative research adds about a week onto the process, if the correct research methodology is chosen.
Which system do you want to bet your $10 million on?
Recently a discussion I had with a client centered on why the company would want to include volumetrics in the course of its new-product development plan, as this step had never before been included in its research efforts. Volumetrics provides the ability to plan production to ensure no out-of-stocks; the data can also be used to decide whether the new product will likely ship enough to make the proposition worth the effort being put into it. Volumetric modeling can be had for an additional $3,000- $6,000. Beats shooting craps, doesn’t it?
When asked why they omitted certain research steps, clients have said:
1) They prefer qualitative research for advertising as it gives them an idea of the feelings the ad “leaves with consumers.” Translation: Research can be summarized any way necessary to support a going-in point of view.
2) The budget simply doesn’t allow testing all the steps in the process, so they must pick their shots. Translation: A successful case as to why this investment is necessary has not been made.
3) Immediate instincts are more trusted than consumer input. Translation: Moving this out the door now–not future failure or success–is the critical element.
In this world of slotting allowances and high gross rating point costs, there is really no such thing as a no-brainer. Packaging development costs, material costs, employee time, and the hardest to measure of all–lost opportunity–all need to be accounted for. Why take even the slightest chance in introducing a wrong product or marketing effort when it’s so easy to put the correct steps in place to ensure success?
Jack Gordon is CEO of AcuPOLL Research (www.acupoll.com), a global research agency based in Cincinnati.
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