The Importance of Knowing Your Customers
When you develop a new product or service, you do so with the intent of providing higher quality, increased value, or both to your existing customers, as well as to draw in new customers. To do so effectively, it is important to understand what your target audience wants and needs. Sometimes, however, a new product can be designed to match customers’ desires yet still fail due to unexpected factors.
As a business law attorney, I have helped many clients bring new products and services to market with great success. I have also witnessed a number of product failures that left marketing professionals and CEOs scratching their heads as to what happened.
How Big Is a Third of a Pound?
In the early 1980s, the A&W fast-food chain introduced a new burger that it hoped would compete well with McDonald’s Quarter Pounder—which, at the time, was about ten years old and well on its way to icon status in both the fast-food industry and pop culture at large. A&W’s product outperformed the Quarter Pounder in blind taste tests, cost about the same or less, and contained more beef, so it seemed like a “can’t miss” situation. Despite extensive radio and television marketing, the new burger failed to gain traction among consumers, and follow-up focus groups would soon reveal why.
It turns out that customers, in general, were confused by fractions. A&W was hyping the qualities of its new third-pound burger, but customers believed that a third of a pound was less than a quarter of a pound. They actually thought that A&W was overcharging for less meat.
Understanding Your Customers
While there is no way to know for certain—and it is easy to look back 35-plus years with the advantage of hindsight—but many believe that the A&W situation could have been prevented with more complete market research. More extensive pre-launch consumer studies might have shown that the burger would have sold better under a different name. Or, perhaps, a different marketing strategy could have been used to give prospective customers the information they needed to make an informed decision.
In short, there is no such thing as knowing too much about your customers. By analyzing all available information—and generating more information whenever possible—you are more likely to develop products and marketing strategies that help your company flourish. The details matter, and profitability awaits those who can capitalize on them.
Let Us Help
If you have an idea for a new product or service but are unsure of how your customer base will receive it, contact an experienced Naperville business law attorney. At the Gierach Law Firm, our team can provide assistance as you conduct research and analyze your findings. We can help ensure that your innovations will promote long-term growth and commercial success. Call 630-756-1160 to schedule an appointment today.