Hidden Needs Analysis: Creating Breakthrough Products
Interview: Keith Goffin
Steve Macaulay
Hello, I am Steve Macaulay and I am interviewing
Professor Keith Goffin about his book Hidden Needs
Analysis: Creating Breakthrough Products.
Now you have co-written this with Fred Lemke and Ursula
Koners; Keith, let’s be honest, most managers dream
about having a product like an i-Pod, the i-Phone,
something that will sweep the market. But the reality is
different from that, isn’t it?
Keith Goffin
Yes, unfortunately reality is very different. It depends on
the sector that you are in, but there was a study done not
so long ago – about a year ago – in the US, the latest
study on food and beverage products and that found that
90% of those failed – 90%. What does failure mean in
that definition? It was that the product was put on the
shelves of supermarkets and withdrawn, no longer sold,
within three months. And 90% of them actually fell into
that category.
Some other sectors, it is not as high, but all of the
research shows whether you in automotive, whether you
are in food and beverages, whatever sector you are in, it
can be a very high failure rate. So new product
development is risky – and yes, it is great if you have the iPad, the i-Phone or the i-Pod, but it doesn’t happen like
that all the time. It is not quite that easy.
Steve Macaulay
Now, some of this seems to be down to the process of
understanding customer needs; can you expand on that?
Keith Goffin
Yes; a lot of the work we are looking at currently is how do
companies try and design their products and services.
And I should stress that everything we talk about today
applies both to products and to services. But a lot of
organisations do standard types of market research,
traditional market research – they will do interviews, they
will do surveys and they will use focus groups where they
essentially ask direct questions to their customers: what
features would you like in the product in the future? And
they will ask that question in that sort of form; and the
problem with those types of direct questions is that it
doesn’t get very deep. So the customers often struggle to
answer, they can’t articulate what they actually need; quite
often customers in those focus groups, if they are taken
Keith Goffin
outside of their normal environment, they won’t actually
say what they need – they might not have realised it.
They will do what we often do in day to day life; we will put
a gloss on it, we will explain how we use a product or
service and it is not actually the way we do need it.
And so, very often, companies are just scratching the
surface and the problem is if you are trying to design
breakthrough products or services, you can’t just ask your
customers what they would like – you won’t get a very
good answer, you are just getting something superficial
and you are likely to get a small variation, incremental
variation, on today’s product and services which will mean
that you are ‘me too’ provider and you are likely to fail.
Steve Macaulay
You have done some research on new ways of looking at
customer needs; can you say some more about that?
Keith Goffin
There are a number of methods that are emerging, Steve,
and these tend to come from the social sciences. So
whether you are working in psychology or in anthropology
the techniques in those social sciences to understand how
people think, as opposed to what they are actually saying,
are very, very well developed.
So for instance, in anthropology there is a central rule
essentially that you would listen to what people say about
their culture and their routines and the rituals of their
culture. But actually what they do is something you
observe afterwards and you look for the so-called disjunctures, you look for the contradictions – they said this
and they do that. But those types of social sciences
where you are looking to go much deeper than listening to
what people say to you by observing, by doing so called
contextual interviews where you go and observe the
people using products and services – ask them questions
about the product or service as they consume or use it –
you will find out far, far more.
So these techniques, as I say, are from the social
sciences, there are a number of them which you tend to
use in combination. And what we should actually stress
is there is no one single technique that will solve all of
your market research issues; it is a number of tools and
techniques that you put in combination and each of them
together gives you another piece of the puzzle of
understanding what the customer really wants.
Steve Macaulay
Do you need lots of training to put these things into
practice?
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Keith Goffin
Keith Goffin
Well you do need to understand that your organisation is
going to have to invest in this. This is not the sort of thing
that people will probably – if they have studied marketing
– have studied before because these are new and
emerging approaches. So it does take time and effort,
but what we are really looking for is customers’ hidden
needs. They are the needs that customers themselves
can’t normally articulate – we have to pull them out. In
the terminology of this field, we talk about known needs –
those are the needs the customers have for features on
products and services. Then there are met needs – those
are also known, but they currently aren’t served by
products and services on the market. But hidden ones
are the sorts of things customers would really want; if you
provided functions that satisfy their needs they get
excited, but they are hidden and by definition actually
identifying hidden needs takes time and effort which can
mean changing things in your organisation to get these
skills.
On the other hand though, if you really want to have these
skills within your organisation, it is worth the effort of doing
that.
Steve Macaulay
I would like to take it to the specific and I would like to pick
one example that rather intrigued me from your book
which was about walking boots; a boot, is a boot, is a boot
– but maybe it isn’t. Tell me some more.
Keith Goffin
Clarks, the well known manufacturer of shoes, has been
around for a couple of hundred years in the United
Kingdom, moved into the walking boots market a few
years ago. When they moved in, they decided they
needed to understand it; it was, for them, a completely
new market. If they were producing walking boots as
opposed to work and casual shoes, they needed to
understand more. So they employed a group of
anthropologists who actually identified different types of
walkers, interviewed them walking in the Lake District to
understand how walking boots were used.
Steve Macaulay
They were actually in there, in the Lake District saying
what? Oh, why did you do that? Or what are you doing?
Keith Goffin
They were actually asking walkers can we walk with you
for a few minutes. Can we discuss things with you?
They were taking videos then, for instance, and we should
stress that often a lot of this work is done where you video
it because you can then analyse it in a really systematic
way afterwards. But they were asking people what is
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Keith Goffin
important to you about boots? People were saying things
like when I take my boots off can I clean them easily?
So they filmed people on the back of cars, sitting on the
back of the hatchback of the car, taking their boots off.
Getting lots of really detailed product information about
existing boots and what needed to be improved, but a
really interesting point about Clarks was that they didn’t
just look at the way people use boots, they looked at the
way they purchased them and they did a lot of work
observing people purchasing walking boots in European
sports shops. They found on average that there would be
for any one size – and I happen to take size 11, or 45 in
European numbers, so that is the top shelf. But any
sports shop in Europe would typically have about ten or
eleven pairs of boots of my size; and a typical customer
they found will take only two or three off the shelf to try on.
Now the problem is, if you are a manufacturer, you have
only got a 20-30% chance of being chosen even to be
tried on and what was interesting about the research, they
asked people which are the boots you would take off the
shelf? And people said things like the colour, the design,
the make, the brand – which are all quite well known
things. But what they found in their research by videoing
people and doing quite detailed coding and analysis of it,
that a lot of people would squeeze the tongue of the boot
to try and understand, before trying it on, is it comfortable?
Nobody wants to try on ten pairs – it takes too long. And
they find that people squeeze the tongue, it was a key part
of the research. It was a real ‘aha’ moment for Clarks in
understanding how people select boots and they then
designed the boot not only to be comfortable in walking,
but to have a very soft and well designed tongue.
Steve Macaulay
Give me another example in a business to business
context.
Keith Goffin
We have used a number of these techniques and I should
point out what techniques are they – they are the sort of
things like contextual interviewing where you go and
interview people using the product and service. And one
in a business to business – B to B – situation was we
worked a lot with Bosch manufacturing equipment.
Bosch produces production line equipment for
pharmaceutical factories and this is the sort of equipment
that will fill hundreds of syringes per minute in automatic
machines, so these are big pieces of production line
equipment – metres long, very expensive. They will cost
about €5-6 million this type of equipment. We did some
research with them where we went much deeper than the
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Keith Goffin
normal type of market research; so we went to people on
the production line and we asked them about the
problems with their existing equipment; what stopped
them reaching their production targets?
When people are interviewed in their working situations, in
this case a production line in a pharmaceutical factory,
they were much more able to tell us about what they
needed by saying things like it is this part of the machine –
if it was only designed another way that would help me
reach my production targets better.
So we used, for instance, contextual interviews; we used a
technique from psychology called repertory grid where you
compare different things and get people to compare and
contrast to help them articulate better. We used these
various techniques in combination, which then led to a
new product from Bosch. Interestingly they were going to
be the fourth company to enter this market, so they knew
if they came with a new product with already existing
competitors, if they didn’t come up with a unique design –
something special – they weren’t going to succeed. So
they were very interested to take these new approaches to
market research and were very pleased that that it worked
out well and has been a very successful product.
Steve Macaulay
One of the things that I was interested in from the book is
the idea this isn’t just a set of techniques, if you were to
make an organisation really focus on the customer and
hidden needs and so on, you need to do quite a bit of
work to get these kind of whole approaches in the
organisation and embedded.
Keith Goffin
Yes.; that is one of the things that took us quite a while to
realise and we have done lots of research around the
techniques, but what we are doing increasingly is also
looking around not just at the technical aspect, but also
the political. And what we are finding are that there are a
number of barriers within organisations to taking these
different approaches and, sadly and ironically, we are
finding that one of the biggest barriers to adopting new
approaches to market research is the marketing function
in the company.
So what we are finding quite often, unfortunately, is that
companies that have had a tradition of strong marketing,
where they have done focus groups and surveys, those
actual marketing departments because of their expertise
and tradition are very reluctant to do things in a different
way.
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Keith Goffin
So that is one of the first barriers to actually adopting
these types of techniques; you have got to in your
company really recognise what are the groups within your
organisation that might not want to actually move to these.
We found that – we didn’t realise in the beginning – we
found that quite often marketing people see it as a threat.
It is contrary to what they have been doing up until now,
but that is the value of these techniques – they are
different.
Also in some companies, a barrier to them really being
successful with them is that they have tended to do very
incremental things. These techniques are designed to
get you to the more radical, to the breakthrough product
and if you haven’t got a strategy and the management
support to take some risks, you are probably not going to
come up with a breakthrough product.
So we are finding, although initially we are looking at what
are the technical things, how do we train people on the
techniques, how do we use them in combination? We are
finding that is important, but you can’t forget this political
side and actually how you can change the culture and the
company to really adopt these techniques.
Steve Macaulay
So Keith, a final message for people looking at this idea
for the first time; what would you like to leave people with?
Keith Goffin
I think the thing that is coming out most strongly for us at
the moment is that we are seeing some organisations, in a
sense, reluctant to put the effort into learning these and
getting the internal skills.
I think that is a real shame because if you are going to be
successful as a company, whether you are in products or
services, really understanding the customer, I think, is
something that is fundamental; it is something you
shouldn’t outsource to an agency. I think you need that
internal capability and I hope organisations are going to
put more effort into actually developing that internal
capability to really understand the customer and their
hidden needs.
Steve Macaulay
Keith, thank you very much.
Keith Goffin
Thanks Steve.
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