How to Tell if Your Baby is Ugly: Why Market Research is Important

Annie Morino | October 17, 2022

One of my favorite episodes of Seinfeld is when, after weeks of hearing “You’ve gotta see the bay-bee!,” Elaine and Jerry finally meet their friends’ new baby. They’re excited because of all the great things they’ve heard about the infant – and we’re excited, too.

At the same time, Elaine’s new suitor tells Elaine she looks “breathtaking,” and she is, of course, both flattered and thrilled to receive such a high compliment.

The entire episode builds up to the moment when Elaine finally pokes her head into the baby’s crib and realizes … this is not a cute baby. Not even remotely. In fact, the baby is just plain ugly. Yet the parents don’t see it.

Jerry and Elaine do their best to react politely, but don’t tell the parents what they think. Then, much to Elaine’s shock, her suitor looks at the baby and says, “Oh, isn’t he breathtaking!”

How could two people look at the same baby and have such completely different takeaways? Why couldn’t the parents see their own child’s poor features? Does “breathtaking” mean the same thing to everyone?

Clearly not.

In marketing, the same dynamic happens all the time. The marketing team nurtures a new idea, gives it love and attention, and is excited to show the world — thinking the idea is breathtaking — and then the customer comes along to tell the company that, frankly, the new idea stinks.

Why does this happen? And why does this happen so often? How can you prevent it from occurring the next time your company nurtures a brilliant idea?

Why New Ideas Fall into This Trap

In the rush to create something new, companies often skimp on market research. They develop an idea within their own walls and don’t reveal it to the outside world until it is almost complete. Thousands of dollars go into R&D, marketing efforts, and maybe capital expenditures to ensure the product is ready to launch by a certain date.

Only people with a direct incentive for its success have a hand in the decision-making – and that is the problem with this approach. By the time someone internally points out that the baby is ugly, it often feels too late to turn around.

As humans, we are naturally loss-averse, so the thought of abandoning an idea this late is emotionally distressing. Reputations, relationships, and even jobs could be on the line if the new idea doesn’t work out. As a result, rather than preserve the dollars that might be wasted if they move forward (opportunity costs), companies try to justify what was already spent by pushing forward anyway (sunk costs).

These behaviors are amplified in organizations where a powerful hierarchy exists or where a strong leader unknowingly fosters group thinking. Even when the baby is ugly, it becomes easier and more socially acceptable not to speak up.
In sum, the combination of loss aversion, misunderstanding of opportunity vs. sunk costs, and a fear of speaking out against the power structure creates a strong bias in favor of the new idea.

Like a new parent, if you aren’t watching out for this bias, it is easy to fall in love with your idea—whether your idea is breathtaking in a good way or a bad way.

What is Market Research? Your Best Chance at Success

While many factors determine whether your new idea or product will flourish, you can give yourself the best chance at success if you first test your assumptions with your target audience. That is why market research is so important.

By getting out of the office (physically or virtually) to talk to actual humans who might want to pay for your product, you begin to see a clearer picture of the opportunity ahead and what barriers might have been initially disguised by your team’s biases. Great market research also generates insights that can strengthen your idea and help you differentiate it against the competition. The earlier your team engages the customer in the process, the more opportunity there will be to refine and nudge the idea in a successful direction.

In many ways, market research is the difference between knowing what your customers need and thinking you know what your customers need.

What Makes a Great Market Research Strategy?

The process of gathering and analyzing customer data will help you better understand what customers and prospects need from your organization, but it can be difficult to know which research methods will work best and the process itself can be colored by the same biases you are trying to eliminate.

While there are many ways to go about market research, a strategic approach includes the following elements:

1) Identifies your inherent assumptions and asks questions meant to prove / disprove them
– Some assumptions you may not realize you are making include:
o Anyone in the world needs your idea
o Your solution solves the customer’s problem
o A customer is willing to pay for your idea at a worthwhile price

2) Captures feedback from people who look and think differently than the people who formed the idea
– Build a diverse audience that considers the many layers of identity each person brings to the table (anything from their race / ethnicity to their relationship to the sales funnel could provide new insights)
– Remember that achieving a diverse set of feedback often adds complexity to the project, but it is worth pursuing to fully vet your idea

3) Includes a level of confidentiality for the participants so they may speak honestly without fear of being personally identified by their comments
– A third party can help provide a barrier between the company and the participants, giving them space to speak candidly
– A confidential process ensures authority figures are not present during qualitative research studies and protects small sample sizes from accidentally singling out individuals

4) Asks questions that probe participants objectively
– Provide respondents an opportunity to agree or disagree while not indicating there is a “right” answer
– Keep in mind that biased questions disguise insights that would help you change course if spotted early

5) Establish a clear understanding of how the information will be used to ensure the chosen approach generates the insights needed to make a major decision
– Not all methodologies have an equal ability to answer the same question
– Not all questions can be answered to the same level of specificity
– The more clearly you can define your research objective, the more cost-effective and actionable your results will be, and the more confident you can be that you have created an idea worth investing in

A strategic market research approach provides organizations with a solid understanding of their customers’ needs and how their new idea can best meet them. If the idea is bad, market research will reveal it quickly, allowing the company to redirect resources into better ideas. If the idea is great, market research will provide insights that can give the company a competitive advantage during development.

Whether the parents believe it or not, there is a way to prove their baby is cute. You just need to have the courage – and the right market research partner – to ask.

Want to learn more about how Falls & Co. can help you learn more about your company? Contact us and we’ll talk.