by Tiffany Niver
We don’t know what we want. Decades of psychology, economics, and sociology research has shown that people are quite poor at predicting what they want, how it will make them feel, and the long-term implications of gratification. This makes ground-breaking product innovations all the more complicated as understanding users becomes an exercise of mind-reading…and then some. Knowing the limitations of consumer insights and going into the process with a healthy sense of skepticism can empower creativity in coming up with the most impactful tests and analyses. The key to getting great consumer information is focusing on obtaining as much behavioral insight as possible, while following the lean start-up principle of “maximizing learning for unit of time and effort expended.”
Many entrepreneurs and researchers follow a fairly standard path of gaining customer insights.
Each phase of consumer feedback is extremely important, but - with the limitations of self-reported information - oftentimes behavioral feedback is the ideal methodology. A key obstacle, however, is that this necessitates actually having something for users to test which requires time and money. The “holy grail” of consumer testing would be a low-development behavioral test where one could get the benefits of usage data without the costs. While this is clearly difficult to do, entrepreneurs should push themselves to be as creative as possible with testing by doing things like:
A key learning I’ve come away from my own experiences and LTV thus far is that actions speak louder than words and until you have something in front of the consumer, you don’t know exactly how they will react. So get out there and do some behavioral testing!!
Many entrepreneurs and researchers follow a fairly standard path of gaining customer insights.
- Baselining Through Consumer Self-Reporting: Before any development or investment begins, they rely on surveys, focus groups, and interviews to learn about markets and consumers. These self-reported methods can be extremely useful in understanding purchasing behaviors, usage patterns, pain points, and customer needs. Oftentimes consumers can accurately articulate their frustrations and desires, and these become cheap and easy ways to get validation for business ideas. However, consumers base their recommendations or experiences on the status quo and thus have difficulty imagining a world which is much different from their current situation. Thus for incremental changes to existing products, these techniques can be extremely useful, but for dramatic deviations from the status quo, the reliability of these methodologies decreases.
- Piecemeal / Feature Testing: Once entrepreneurs have their concept finalized and some features or interactions available, they complete smoke tests and feature tests to see how consumers interact with their concept or feature. These tests can further analyze one or two hypotheses and can be helpful in understanding how much appetite there is for a concept or how users react to pieces of a product. A major limitation is that the consumer (and the entrepreneur) still doesn’t know how the set of features or hypotheses will interact together.
- Full Product Testing / Behavioral Insights: Much further down the road, a full product is available and a consumer can test every aspect of the experience. At this point, entrepreneurs have access to a tremendous amount of information provided by every click or every piece of feedback that the consumer gives. This helps get into the mind of the consumer and is usually the first time where an entrepreneur can get the actions rather than just the words or intention of consumers.
Each phase of consumer feedback is extremely important, but - with the limitations of self-reported information - oftentimes behavioral feedback is the ideal methodology. A key obstacle, however, is that this necessitates actually having something for users to test which requires time and money. The “holy grail” of consumer testing would be a low-development behavioral test where one could get the benefits of usage data without the costs. While this is clearly difficult to do, entrepreneurs should push themselves to be as creative as possible with testing by doing things like:
- Using existing data on consumer behavior more thoroughly (i.e. Wings using Facebook data to launch a product based on consumer behavior)
- Creating quantitative data / observing consumers in similar environments (i.e. Cake Financial observing consumers on Quicken, on their trading platforms, or doing research)
- Continuing to build the most minimally viable products to test consumer behavior (i.e. Rent the Runway putting together trunk shows)
A key learning I’ve come away from my own experiences and LTV thus far is that actions speak louder than words and until you have something in front of the consumer, you don’t know exactly how they will react. So get out there and do some behavioral testing!!
