As professionals in the market research industry, I feel safe in saying that all of us are convinced of the benefits we provide our clients or companies. For many of us, it’s a never-ending search for a special piece of data or an unusual, yet highly useful opinion that can truly change the fortunes of a product, service or business. The hunt drives us to strategize, ideate, create, and focus on seeking that gem.
Segue to Shark Tank, ABC’s Friday night hit, January 13, 2017. Mark Cuban said, “Market Research is Never Right.” What? Did I actually hear him say that? If I was a Twitter fanatic I’d be dissing him. I’m a fan of Shark Tank and have found others who not only share my guilty pleasure, but have analyzed the personalities of the sharks so well they can predict who will make offers and who will win the deal. That’s a great example of quant research in the real world. Watch it enough and you can predict the next outcome.
Although Mark’s comment bent my nose out of joint, it prompted me to think about the successful companies that I am familiar with, and how they got to where they are today without following conventional paths or being helmed by conventional leaders. Sure, there are a few incredibly successful CEOs without college degrees. Notwithstanding Benjamin Franklin and Abraham Lincoln, we also have Larry Ellison of Oracle, media moguls like David Geffen and Russell Simmons, and of course Steve Jobs and Bill Gates. When it comes to the successful companies that have steered their course without utilizing market research, there are a handful that stand out; but they are few and also the exception. While I know that Mark Cuban acknowledges a number of failures along the way to his success, I don’t know for certain as to whether or not his anti-market research comment was based upon personal business experiences or the intuitive sense he has with regards to his own business ventures. Steve Jobs had that intuitive sense and Apple became famous without conducting market research on its products. Although many of Apple’s products, beginning with the iPod, became instant successes and category killers, the company left several products DOA on the side of the innovation highway, including the Lisa computer and the Newton; the first personal digital assistant (PDA).
Motorola comes to mind as one of the clearest examples of a major international company that lost its way due to a lack of market research. Motorola owned the commercial radio business. Going back to WWII and the Korean War Motorola was the most highly regarded and successful wireless and mobile communications company in the world. Their walkie-talkies and 2-way radios were the gold standard for the military, public safety and dispatch radio systems. These devices cost almost as much as gold. Motorola’s infrastructure and device business dominated the landscape and they positioned themselves as the early leader in the cellular business. I once asked a senior Motorola executive why they didn’t utilize market research. His answer was simple and telling. He said that Motorola was a technology company that had second and third generation products sitting on shelves in basements, waiting to be launched once the life-cycles of existing products had run their course. At that point, they would simply call up the reserve product. No need for research and hardly any need for strategic marketing. Why do that when they essentially owned the market?
In the early 90s when the FCC and telecom vendors wanted to expand mobile services through Personal Communications Services (Sprint PCS, T-Mobile, etc.) I had a conversation with a senior VP with Motorola’s cellular division. At that time, they were crushing it in the cellphone business. While the Dynatac and Microtac were leaders in their categories, my friend couldn’t wrap his head around the necessity for digital devices. “Why” he asked, “I just don’t get it. I don’t see the need.” Looking back, he couldn’t have put it together. As a longtime employee, he was imbued with the Motorola philosophy, and I paraphrase here: “There is no reason for any other company to compete with us. We’re Motorola and we have everything anyone could ever want.” That is why they didn’t conduct market research and that is why they lost their leadership position in the cellular industry, quite literally to the point where they then sold off their handheld consumer division and became an also-ran in the industry.
Yes, there are some billionaires without college educations. Yes, there are some successful businesses that don’t do market research. They are rare, the anomaly, the special cases. So while Mark Cuban may believe market research is never right, we at INGATHER look proudly at the scores of repeat clients that we have worked with over the years to help them in their success. They know the value of great market research.
By Bob Chapin, CEO