Saturday, February 2, 2013

Market Research for microISVs

Phil Dusenberry believes that we can do low-cost market research that will help us make strategic decisions. Dusenberry is the author of the 2005 book "Then We Set His Hair on Fire - Insights and Accidents from a Hall-of-Fame Career in Advertising."

People like to voice their complaints. Dusenberry explains. Anybody can conduct effective research. We're doing research when we listen to other people's conversations, and when we evaluate other companies' products and services. When it comes to market research, Dusenberry believes more in intuition than in number-crunching.

Many business people are "too busy" to conduct research. Or they feel that they already know what their customers think. And many business people collect only the information that confirms the beliefs that they already hold. Truth is, we have all sorts of opportunities in the software industry to deal with customers directly and to do informal market research.

Sometimes our market research forces us to make difficult decisions. Dusenberry's advertising agency had the Pepsi account. Agencies make much of their income from the ad buys that they get their clients to make. And during the "cola wars," Pepsi bought a lot of advertising.

Dusenberry recommended that Pepsi drop its successful commercials in favor of airing inexpensive Pepsi Challenge spots. These Pepsi Challenge ads, you may remember, were video tapings of ordinary people sampling Pepsi and Coke. Everybody shown in these taste comparisons preferred the taste of Pepsi.

The author's recommendation was a huge success for Pepsi. The Pepsi Challenge ads moved Pepsi from 23 percent of the cola market to 36 percent.

Dusenberry feels that his Pepsi Challenge ads, combined with his image-building ads, forced Coke into the blunder of releasing New Coke. He claims that Coke trusted Pepsi's research, i.e., the challenges.

The bottom line - Do whatever market research you can afford. And trust your research, at least at the general level. Dusenberry warns us not to do the research, and then ignore it because you don't like what you're hearing.

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