Consumers Who Help Predict Failure
Early customer feedback, especially in multiple forms and from multiple channels, can make or break the success of a new product or service. But it turns out that not all customer feedback is created equal.
Some people have a knack for grasping new ideas, seeing how products might be used in novel ways, or imagining themselves in other people’s shoes. They give you far more insight and better predictions about the future success of your idea than average consumers. If you are convening focus groups to vet product ideas and stimulate new ones, it is smart to screen for this special kind of consumer.
Now researchers are finding a counterpart to the “futurist” consumer: the Harbinger of Failure. These are consumers who consistently prefer products that do not appeal to a broader audience. They buy products that are more likely to fail, and they buy products that are more likely to limp along in niche markets with lower sales. Moreover, it’s not just what they buy, but how much they buy. Repeat purchases of those likely-to-fail products correlates with even higher rates of failure in the market.
The findings, from researchers at the Northwestern University Kellogg School of Management and the MIT Sloan School of Management, were recently published in the Journal of Marketing Research. The authors suggest that with the right data, retailers (and manufacturers with access to such data) “can identify these customers through past purchases of either new products that failed or existing products that few other customers purchase”—then watch which new products this group buys and feed that into forecasting models for better decisions about what to cut and what to keep.
We do not yet know the personal, behavioral, or psychographic profile of these Harbingers of Failure, which would be extremely useful for research screening and profiling tools. We could bring this unique group into the product innovation process much earlier, eliminating (even before they launch) the “great ideas” that will likely fail.
For now, at least we can screen for the opposite group—the consumer futurists—who help identify the great ideas that will succeed.