Many modern day technology entrepreneurs feel that customers should be seen and not heard and that they should never listen to their customers for product feedback. It’s hard for me to argue with the success of those multimillionaires who have introduced innovative products that have changed the world in the IT, telecommunications and medical fields. However there is strong evidence that suggests companies that don’t listen to their customers won’t be in business for that much longer. Based on a sample size of 32 startups, Chubby Brain, an online data-driven company that provides tools for entrepreneurs, found that the main reason that startups fail is because they ignore their customers. And three of the top four reasons were marketing related. (excluding picking the right team)
You don’t have to be a statistician to understand that for every business idea there is a chance for success or failure. In fact, studies have indicated that more than 90 percent of all new products fail in within 2 years and only 40% of new consumer food, beverage, beauty, and healthcare products will be around in 5 years! Since most startups survival is based on developing a product that will be a hit with the market, we can conclude that company failures are caused mainly by new product failures.
In my experience, marketing research which can save a company from making mistakes and is the most underutilized marketing tool. I’ve heard from business owners that with shorter product life cycles, it would take too long to get the product to market if it they had to research every product feature with their target market. Or it’s better to introduce the product in order to beat the competition to market. Although these reasons are valid, they are prone to product failures. For startups surviving on a shoestring budget, investing in primary and/or secondary marketing research would not only increase their product success rates and but the long-term viability of their companies would increase significantly.