Introduction

Consumer research seems very straightforward. Surely, one can simply ask potential customers what they want and how much they would pay for it — they should know and be eager to share it, right? Sadly, it turns out that users often don’t know what they want and are often reticent to tell you their honest opinions, especially when it comes to how they spend money. Making it even more complicated, being part of research itself can influence what consumers say and their truthfulness. It turns out that leaders f-up innovation by misunderstanding and misusing consumer research.

What is consumer research

Consumer research is a key business function in consumer-products and CPG businesses. It promises to identify consumers need, want and will pay for. It aims to provide insights that lead to new products and services that address unmet market opportunities. It can optimize pricing strategies and enhance customer satisfaction through an understanding consumer preferences and trends. Research identifies and defines target customers through demographics and behavior, also known as segmentation. It helps companies fine tune its designs, marketing and advertising. It can even quantify how consumers feel about a company and its brand through sentiment analysis.

Innovation can use consumer research to generate new concepts by identifying unmet needs and unfulfilled jobs-to-be-done.[i] Ethnographic and longitudinal studies can identify new customers. Down-selecting options through focus groups, eye tracking, and prototyping can help identify the most ideal solution. Auction-based simulations, pilot markets and market simulations can assess pricing and marketing strategies.

All of this is in service of answering a question that sounds obvious:

What do consumers want more than what they already can access?

Deconstructing this question uncovers the three unknowns of consumer behavior that consumer research attempts to answer:

• What are the consumer’s aspirations: What do consumers wish they had or could experience that they currently don’t? For example, this could be better quality, convenience, emotional fulfillment, or solving a specific problem.
• What are the consumer’s motivations: What are the factors driving these unmet needs or desires? These could be driven by external trends, internal aspirations, or social influences.
• What barriers exist to consumer adoption and purchase: What are the frictions preventing consumers from obtaining what they want, whether it’s price, accessibility, or lack of awareness?

Consumer Research Can Fail

Consumer research is far from an exact science – it involves interpreting often unpredictable human behavior which is influenced by a wide range of factors. People’s preferences can change based on social trends, emotions, or external circumstances, making it difficult to always draw clear, actionable conclusions. Consumers may not always express, or even know, their true preferences, either due to social desirability bias or a lack of self-awareness. This means that the outcomes from consumer insights can have a range of interpretations. While research methodologies can provide valuable data, leaders must also rely on intuition, ongoing observation, and iterative testing to attain insights that are most closely aligned with consumers real-world behavior.

Consumer research is wrong, to some extent or another, far more than it is right. There are some famous failures of consumer research, products launched based on research that seemed conclusive but were far from an accurate understanding of customers. History is rife with new product failures, but some are especially important to understand since they were largely based on flawed insights.

• New Coke: Research focused too much on taste preferences and overlooked the emotional and nostalgic value that customers attached to the classic Coke flavor.
• PepsiCo’s Tropicana Redesign: Research did not consider real-world purchasing behavior. The changes made it hard for customers to identify their preferred product, leading to frustration and a drop in sales.
• BlackBerry Storm: Launched in 2008 in response to the original iPhone the BlackBerry Storm’s “clickable” touchscreen solved a non-existent problem with the iPhone’s user interface.
• Pontiac Aztek: Research failed to capture the strong aversion consumers had to the Aztek’s unconventional, unattractive design. Despite the vehicle’s practicality the Aztek was quickly discontinued.

Consumer Research as Validation

Let’s be honest – too many companies use consumer research as a rubber stamp for ideas they’ve already fallen in love with, not as a genuine exploration of what customers actually need. They go in with their minds made up, crafting questions that practically beg for the answers they want to hear. “Don’t you think this feature is innovative?” instead of “Would this solve any problems for you?”

It’s a classic case of confirmation bias in action. Teams cherry-pick the positive feedback and conveniently brush aside anything that doesn’t fit their narrative. The enthusiastic executive who championed the project might say, “92% of respondents liked our concept!” while conveniently omitting that only 12% would actually pay for it.

When research becomes a checkbox exercise rather than a truth-seeking mission, leaders f-up innovation by blinding themselves to critical flaws. I’ve seen product teams celebrate flawed research reports while ignoring obvious red flags. This isn’t always due to willful ignorance—many company cultures create environments where bearing good news is rewarded and messengers of truth are punished. Innovation can teams find themselves trapped, forced to develop selective hearing—amplifying every whisper of praise while muting legitimate concerns—simply to protect their standing within the organization. This false narrative carries the project through development until reality eventually hits – usually due to issues that were there all along, but no one dared to address.

To Research or Not to Research

Consumer research is often hailed as a cornerstone of successful innovation. Conventional wisdom holds that understanding customer needs and desires is critical to developing products that will be embraced by the market. However, this thinking may not always apply, particularly when the innovation in question is highly disruptive. As Henry Ford might have famously said, “If I had asked people what they wanted, they would have said faster horses.” This quote encapsulates a fundamental truth about disruptive innovation: customers may not always be able to articulate what they truly need, particularly when the solution is radically different from anything they have experienced before.

In cases of disruptive innovation, consumer research can sometimes be misleading or even counterproductive. When innovators rely too heavily on feedback from current customers or market segments, they risk reinforcing the status quo and missing the opportunity to create something truly transformative. Furthermore, traditional consumer research often fails to capture the needs of the “latent” consumer—those who may not even know they want or need the product until it is introduced. Many of the most successful visionary products in history were launched without the benefit of extensive consumer research. Products like the Nest Thermostat, GoPro cameras, Dyson vacuums, Snapchat, Twitter, and Slack were all conceived without relying on the traditional customer feedback loops. These innovations succeeded because their creators were able to see opportunities that consumers might not have anticipated. Innovators must often act on insight, intuition, and a vision of a future consumer need that may not yet be realized or understood by the market.

Different research methodologies for different needs.

Leaders often f-up innovation by selecting an inappropriate research methodology to answer their unknowns. Expertise and experience in consumer research is critical for effective outcome. Because there is such a wide range of research options available, it’s important to pick the right methodology for the questions an innovator is trying to answer. This means having the knowledge to correctly match the consumer research methods with the state of the innovation and the key unknows needed to be answered. There are consumer research methodologies that are well matched for each stage of innovation, from initial concept to pre-market. There are two keys to effective consumer research;1) Identify the answers you believe are needed to progress (or not) to the next stage of development before selecting the research methodology, and 2) Maintain an awareness of the potential for unexpected discovery and learning. As Donald Rumsfeld famously said:

“There are known knowns; there are things we know we know. We also know there are known unknowns; that is to say, we know there are some things we do not know. But there are also unknown unknowns—the ones we don’t know we don’t know.”[ii]

The following summary of research methodologies does not attempt to be exhaustive and of course, every agency and practitioner have their unique approach. But this is at least a starting point for understanding the options available and helps illustrate two points 1) one size does not fit all and 2) the value of experienced consumer research practitioners.

• Surveys and Questionnaires: These are used to gather quantitative data on consumer preferences, attitudes, and behaviors. Surveys can be conducted online, via phone, or in person.
• Focus Groups: This qualitative method involves a small group of consumers discussing a product or concept, providing insights into their perceptions and attitudes.
• Ethnographic Studies: These involve observing consumers in their natural environment to understand how they use products in real-life settings.
• Interviews: One-on-one interviews are conducted to gain deep insights into consumer motivations, preferences, and behaviors.
• A/B Testing: This method involves comparing two versions of a product or marketing material to see which one performs better in terms of consumer response.
• Auction-Based Methodologies: Attempt to identify willingness to pay using auction-like scenarios. These methods simulate real-market conditions and can help businesses determine pricing for new products and services.
• Conjoint Analysis: A technique used to understand how consumers make trade-offs between different product attributes and features when making purchase decisions. By analyzing these choices, businesses can identify the most important features for consumers and determine optimal product configurations and pricing strategies.
• Longitudinal Studies: These studies track the same consumers over an extended period, often requiring continuous data collection and regular touchpoints with participants. The time commitment, data management, and follow-up costs can add financial friction.
• Eye Tracking and Neuroscience Research: Advanced tools like eye-tracking software or neuroscience techniques (e.g., EEG, fMRI) are expensive to deploy and require specialist knowledge. These methods add financial friction, especially for smaller businesses.
• Market Simulation: Running simulated market scenarios to gauge how consumers would respond to different pricing, product configurations, or promotions can require significant financial investment in software, data collection, and analysis.
• Brand Health Tracking: Ongoing tracking of brand perceptions, sentiment, and consumer behaviors can be resource-intensive in terms of survey costs, data analysis, and reporting.
• House of Quality: A process of incremental consumer studies that systematically translate consumer insights into technical requirements.[iii]
• MVPs: Minimal Viable Products: Launching near prototype quality products, often software, SAAS or web apps that lack many, if not most, refinement in order to test the product’s core value proposition.[iv]
• Lead User Studies: Involve identifying and engaging with early adopters or innovative customers who face unique challenges and have already developed solutions for those problems. These users provide valuable insights that can guide the development of new products or innovations, as they are often ahead of the market in terms of needs and solutions.[v]

The Problem with Most Consumer Research Studies:

The issue with most consumer research is there are no repercussions to the participants’ responses. In a focus group, survey or ethnographic study, a consumer can say they love or hate a product, would spend their last dollar on it, or recommend it to all their friends, but nothing they say will have any real impact on them. They can lie, or mis-represent their feelings, they can be disengaged, or susceptible to group-think and there’s no way for a researcher to truly know the truthfulness of study participants.

The key to successful consumer research, regardless of the methodology, is to force the participants to overcome a challenge, to grapple with a friction. Making tradeoffs, rank-choice voting, presenting limited options, asking consumers to choose between quality and price are all ways to require consumer to work through a friction to make and state a decision. Having consumers select items from a store mockup creates friction to navigate identify and decision making. Requiring consumers to overcome frictions helps reveal true consumer preferences by simulating real-world scenarios. For many early-stage innovation studies this approach improves the research quality enough for actionable insights. But it’s not necessarily accurate to consumer real-world purchasing decisions.

The best research, and it’s rare to find it practiced, introduces purchasing friction. It requires participants make a personal financial decision (or the perception of making a real-world financial decision). If the consumer truly wants a product, they will ‘buy’ it with their own money. There is no better way to understand product-market fit; if the cost is too high, the benefit too low, it’s too confusing to understand, or challenging to purchase consumers simply won’t buy.

Research that leverages purchase friction does not take as much time or cost as one would think. Researchers only need to make consumers think they are making a purchase, you rarely need the product itself. I’ve conducted this type of research with props as simple as boxes filled with sand. Sure this research is more challenging to implement than a focus group, but a focus group only gives the perception of having done research, when it’s really only a coffee talk.

Studies with personal purchase friction are especially useful in solving the most challenging consumer business strategy question; Will consumers continue to buy a consumable item and if so, how often. The ‘razor and blades’ business model is commonly credited to King C. Gillette, the founder of the Gillette company. He popularized the strategy in the early 20th century by selling razors at a low cost (or even giving them away) while making profits on the high-margin disposable blades.[vi] This model, with its recurring revenues, seems to be everywhere from coffee makers to luxury sedans. Identifying the initial purchase intent for a new product’s ‘razor’ might be more straightforward using traditional methodologies, but how does one learn if a consumer is going to consistently purchase the consumable, the ‘blade’, and if so how often. Traditional consumer research is a singular interaction, there is no way to assess product market fit over time. A research methodology that accounts for the ongoing personal purchase decision is required.

Drinkworks case study

Drinkworks was a joint venture between Keurig Dr Pepper and Anheuser-Busch. It was formed to develop a pod-based home cocktail system similar to Keurig’s coffee machines, but for alcoholic beverages. In 2018 the company lauched the Drinkworks Home Bar, a countertop home appliance that used proprietary liquid-filled pods to dispense ready-made cocktails, beer, and other alcoholic drinks at the push of a button.

How many and how often will customers buy the ‘blades’?

Because the cost to manufacture the appliance was far more than could be charged for it, the economics of Drinkworks’ ‘razor and blades ‘business model was critical. The profitability of the business was wholly dependent on how often customers purchased new beverage pods, the pod’s attachment rate. Although traditional research had given the startup confidence in the market opportunity and the appliance’s retail price, none of the tests had statistical confidence in the consumer’s attachment rate. None of the research methodologies used had a way to replicate on-going real-world pod purchases. A study would need to include the inconveniences to purchase, selection decisions and most importantly how much were consumers willing to spend on drink pods every week.

Designing the study and deciding the participants

To understand the real-world purchasing frictions of inconvenience, selection, and cost, a pre-pilot test was conducted at a nearby corporate campus. Recognizing that the team might not fully understand the breadth of potential customers, we intentionally recruited a cohort of participants that mirrored the expected target customer. In addition, we allowed for self-selection through an open enrollment process, acknowledging that some individuals who might not fit our initial assumptions about the ideal user could still find value in the system. This approach helped challenge our preconceived notions and ensured that the product was tested across a broader spectrum of users, offering a richer understanding of how it would be received in the real world.

Inconvenience:

As much as people discuss the concept of “retail therapy,” the reality is that shopping is often a significant hassle. The emergence of costly services like Instacart, Amazon Fresh, and FreshDirect highlights the friction inherent in purchasing everyday goods. This illustrates a key point: the act of shopping, while seemingly mundane, is filled with friction that many consumers would rather avoid. In our study, we intentionally created the friction of inconvenience by limiting access to the product selection—participants could only make purchases from a physical kiosk with restricted hours. This constraint forced participants to prioritize their shopping decisions and plan ahead. If the product pods were not sufficiently compelling to them, they simply wouldn’t take the time to reserve a spot or make the effort to visit the kiosk. This experiment revealed something critical: in the absence of friction, consumers might not engage deeply enough to create a meaningful behavior change, even for products they might otherwise value.

Selection:

The act of choosing itself introduces a form of purchase friction, as consumers can easily become overwhelmed by excessive selection or frustrated when they can’t find something that suits their preferences. The packaging and the product’s placement on the shelf can further compound this challenge, often causing confusion or discouragement. In our experiment, we replicated the typical in-store experience by stocking the kiosk with products displayed as they would be on a traditional shelf. This approach forced participants to search and find the products they were looking for, creating the kind of friction that is often present in real-world shopping. By introducing this friction, we were able to conduct A/B testing on our packaging, observing in real-time how consumers evaluated different options and gauging their preferences under conditions that more closely mirrored their actual shopping experiences.

Financial Friction:

This element of the study was the most critical component—and one that other methodologies often fail to replicate. To truly mirror real-world purchasing behaviors, we needed to make participants believe they were spending their own money on the product pods. The key to the study’s success lay in creating a psychological commitment to the transaction, making participants feel as though they were incurring a personal cost, even though, in reality, they were not. This approach forced participants to prioritize their decisions, determining how many and which types of pods to purchase each time, much as they would in an actual retail environment. In exit interviews, 100% of participants expected, and in some cases even welcomed, the idea of being charged for their purchases. This confirmed that the psychological friction of perceived cost was at play, and that participants were indeed considering financial implications in their decision-making process.

Results

The results were astonishing in their accuracy, with findings correlating perfectly from the study to the real product launch. The experimental design successfully replicated key market frictions—inconvenience, selection challenges, and financial considerations—creating authentic purchase behaviors among participants. Exit interviews revealed that participants made purchase decisions with genuine cost considerations, validating our methodology. The A/B packaging tests yielded clear preferences that directly translated to in-market performance, with preferred designs showing 27% higher selection rates both in the study and after launch. Additionally, purchasing patterns related to frequency, quantity, and product mix mirrored actual consumer behavior post-launch, demonstrating that our controlled simulation effectively predicted real-world consumer responses.

Conclusion

Leaders can f-up innovation by misusing consumer research. Believing that customers can, and will, tell you what they want is a dangerous simplification of a complex understanding. Consumer research remains essential to innovation, but only when executed thoughtfully with an understanding of its limitations. Successful consumer research combines rigorous research practices with experienced interpretation and a healthy dose of intuition. Ultimately, successful products aren’t just born from asking consumers what they want—they emerge from understanding what consumers truly need, even when they themselves can’t articulate it.

[i] Clayton M. Christensen and Michael E. Raynor, The Innovator’s Solution: Creating and Sustaining Successful Growth (Boston: Harvard Business School Press, 2003). [ii] Donald H. Rumsfeld, Department of Defense News Briefing, February 12, 2002, transcript, U.S. Department of Defense, https://archive.defense.gov/Transcripts/Transcript.aspx?TranscriptID=2636. [iii] John R. Hauser and Don Clausing, The House of Quality, Harvard Business Review, May–June 1988, 63–73. [iv] Eric Ries, The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses (New York: Crown Business, 2011). [v] Eric von Hippel, The Lead User Method: An Introduction (Cambridge, MA: MIT Sloan School of Management, 2005). [vi] Michael E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors (New York: Free Press, 1980).