It’s actually a trick question; one of those questions that make you roll your eyes (and perhaps groan) when you hear the answer. Still, it’s worth considering, so I’ll give you a hint: What do BUSINESSES buy (as opposed to people)?

The answer is: NOTHING. Businesses don’t buy anything. People buy things, sometimes for their businesses.

Too often, we think “Oh, we’re going to sell this to XYZ Co.” or “I have Dynata as my customer,” but that kind of thinking leads us down the wrong marketing road.

At the end of the day, every purchasing decision is a personal one. We like to think of ourselves as logical, rational buyers, but the truth is that we buy from people we like, from people who are like us, and from people who like us. And the things that we buy are products or services that we can easily see fitting into the picture we have of ourselves.

Certainly companies don’t make big capital decisions based on emotion, do they? The answer is actually pretty nuanced. Think about this:

Which salesperson gets past the admin and to the customer’s office, and which keeps getting stuck in voicemail, is often determined by little more than personality. And, if you don’t meet with the salesperson, you don’t hear their pitch, no matter how valuable their product may be to your organization.

Instead of having a customer relationship with XYZ Co, you in reality have a number of relationships with individuals at XYZ Co; in their purchasing department, engineering group or IT team. If those people leave, they take those relationships with them. That can be good for you in one way, but bad in another.

As a marketing professional, you have to remember that people buy with BOTH sides of their brains. Your product or service needs to make good financial sense, but it also needs to be emotionally appealing. It needs to be attractive and well-designed. There should be an element of fun. (Even the most pragmatic of scientists would rather have the centrifuge with the blue LED’s on it.)

Your people should be the nicest and your company the easiest to deal with. They should be developing relationships which extend deeply into your customer’s organization; relationships with people who only casually interact with your product or service. Every old-school copier salesman knew the value of carrying a pocket full of hard candy and being polite to the receptionist.

• Poor communication: It seems like they don’t listen to you at all, but they expect you to hang on their every word.
• Lack of trust: You feel like they are hiding stuff from you. They lie about what they are up to and aren’t honest about their mistakes.
• Disrespect: They treat you like you’re not important, while flirting with new people. It’s practically impossible to get them to do the littlest thing for you.
• Controlling: They tell you what to do or how to act, or maybe even threaten and intimidate you to get their own way.

I’m in a relationship like that right now. With my cable company.

Oh, there are a lot of excuses for staying. Maybe the relationship started out great, so you’re hanging on for the sake of the good old days. Perhaps you don’t feel like you have any other options. After all, isn’t a bad relationship better than none at all? And who’s to say that the next one will be any better? Maybe this is all you deserve. Plus, leaving is complicated and, frankly, expensive.

The truth is that business relationships are just like other relationships. In order to succeed they require give and take. They are built on honesty, trust, respect and commitment. If you don’t have that kind of relationship with your customers then they will dump you the when something better comes along.

Brands like Zappos (which has one of the highest customer loyalty ratings of any company) understand the value of good relationships. They grew from a million dollars in sales to a billion dollars in just nine years, all on word-of-mouth.

It makes you wonder:

• What effect could better customer relationships have on your company?
• What would happen if your customers started recruiting for you instead of looking for opportunities to dump you?
• What steps could you take (even tiny ones) to listen better, be more transparent in your business practices, and show your customers a little bit of appreciation for their loyalty?

In general, there are two types of research: quantitative and qualitative.

Quantitative

Quantitative, unsurprisingly, involves large numbers of respondents. It’s typically structured as some kind of survey and analyzed using statistical methods. It can help you learn things like

• “78% of executives who travel rely on their smartphones instead of their laptops for overnight trips”
• “Only 3% of small business owners have heard the term “VoIP” and know what it means”

Quantitative research is often used to find potential market opportunities, gauge demand for a product under consideration, or justify demand for a product already under development.

Qualitative

Qualitative research is typically conducted with small groups (some variation of the focus group model), and with individuals (some kind of one-on-one interview.)

Use Focus Groups for Insight

Focus groups help you to identify customer problems and pain points, and allow you to hear the actual language they use. For example, you may think of your product as a “multi-function mobile broadband communications terminal” while your customers think of it as a “phone.” This type of insight is invaluable when defining or positioning a product.
The rules for successful focus groups are pretty simple: get the right people in the groups, work with a great moderator, and run at least two groups for each audience you want to research. (This helps you eliminate any bias that might exist within one particular session.)
A complete focus group project to one audience can cost as little as $15K, and can be done in as little as 4 weeks. You can of course spend more to get better, more reliable insight, but budget at least this to get some real value from the process.

Use Interviews for Validation

Individual interviews are best for getting a response to a specific proposition, like a product idea or positioning. This helps you validate and refine your messaging, benefit statements, pricing, and the other specifics of your offering.
The rules for successful one-on-one interviews are also simple: make sure you’re talking to the right people, talk to a minimum of 7 or 8 from each audience, and don’t have someone from your company do the interviews. (No one will tell you that your baby is ugly, but if asked correctly, they will tell someone else.)
One-on-one interviews are usually 30 minutes to an hour long, and can be done over the phone at very low cost.

Now is a Good Time to Start

At what phase in the development process should you start your research? Now is probably a good time. In the 20 years we’ve been doing technology marketing, we’ve never heard anyone say “We did the research too early.”

• Technology risk — the risk that you can’t make the product you want
• Adoption risk — the risk that customers don’t want the product you make

In my experience, startups usually overestimate technology risk and underestimate adoption risk. There are two reasons for this.

1. Technology Risk is Declining

As the software market matures, technology risk is actually declining for all but the most ambitious projects. Simply put, there is now a lot of really good infrastructure in place (development languages, open source tools and platforms, hosting infrastructure, turn-key cloud computing platforms, and of course the worldwide web itself). Just as important, there are also a lot of really smart technology people who know how to use these powerful building blocks to make pretty much anything you can dream up. Don’t get me wrong, software development isn’t trivial or a slam-dunk, and many ships have foundered on those shores, but the risk is declining and generally over-emphasized.

2. Disbelievers Don’t Build Products

Passion for an idea is the bedrock requirement of being an entrepreneur. Entrepreneurs work with investors and employees who also believe strongly in the mission. After all, who would hire a marketing director, a developer, or a QA person who said “It’s kind of a dumb idea, but what the heck, I’ll give it a whirl.”?

This makes adoption risk that much more dangerous. It’s typically underestimated by the entire organization.

This organizational blind spot can play out in three different ways:

1. Bad ideas that should never have been funded
2. Good ideas that were flawed in execution (this is often cleverly disguised as technology risk, as the dev team scrambles to revise the product to match actual customer needs)
3. Well executed ideas without a clear path to market (or without a realistic level of funding to get them to market)

Fortunately, a well-run research effort can reduce the risk of all of these types of failures. More on that in a future post.