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Focus Groups

Digital Library > Defining and Serving a Market > Customer feedback “Focus Groups”

What do your customers really want? Focus groups can help you find out. Learn how to use focus groups, and more important, how to analyze the results to keep your customers satisfied.

OVERVIEW [top]

Not sure if your new product or service will appeal to customers? Try using focus groups to find out.

Focus groups are a proven strategy for detecting what people really think about a product or service before you pour money and other resources into full-fledged marketing and advertising campaigns. They’re useful, too, for periodic assessments of how customers feel about any of your products, as well as the service you provide.

Through focus groups, you can explore what your customers want — and hear firsthand their suggestions for how you can best satisfy those desires.

In this Quick-Read you will find:

  • How a focus group works.
  • How to outsource the project.
  • Pros and cons of online groups.
  • Cost-cutting strategies.

SOLUTION [top]

Focus groups typically involve eight to 10 people gathered in a room with a moderator, who guides them in a relaxed session of testing and discussing a product or service. The process takes about an hour to an hour and a half.

You and selected members of your management team may observe from behind a one-way mirror. You can listen closely to the answers and observe facial expressions and body language. Later, you’ll receive a written report from the moderator that includes an analysis of the findings and recommended actions you could take.

Here are a few tips to help ensure the focus group works to your company’s advantage:

  1. Don’t try to do it all yourself. Yes, you probably could run an informal group in a conference room yourself, bringing in a random selection of customers and asking them key questions. Unfortunately, they’ll tend to give you the answers you want to hear, rather than the honest, useful feedback they’ll give a skilled and objective moderator.

    Of course, there are always exceptions. Karen Scott of Lake Bluff, Ill., founder of a mail-order baby-products business, organized her own focus group by collecting 250 birth announcements from the local newspaper. She then asked the new mothers what products they wanted. As a result of their responses, she offered more travel products, which became some of her top-selling items. ["I Can’t Afford Formal Market Research," by Stephany L. Gruner. Inc. (July 1997).]

  2. Hire a professional moderator. The moderator won’t take over and exclude you from the process. Instead, you’ll work together, developing a series of targeted questions that will form the moderator’s script. You’ll also jointly assess the results. Tip: Ask another entrepreneur to recommend a reputable market research firm or focus-group facility.
  3. Use professionals to recruit participants. The process is time consuming, and the experts know best which types of individuals to recruit for the market research you need. You’ll pay up to $50 for consumers, up to $100 for professionals, and $150 to $400 for executives. Participants’ costs are included in the research firm’s total package.
  4. Be receptive to whatever you hear. As you observe the focus group in action, you may end up disappointed if you expect participants to rave about your product. Negative responses may arouse your defensiveness: "These people don’t have the taste or education to appreciate our fine furniture!" Adjust your attitude and remind yourself that you’ve hired them to obtain their honest reactions.
  5. Act on the results. The time and money you spend on focus groups will be wasted if you don’t make use of what you learn. Review and analyze the findings, and, together with your management team, decide how they can best be used to boost company performance — and customer satisfaction.

Online focus groups

Focus-group sessions can also be held online, in a chat room superimposed on your Web site. You "watch" the action from your office computer. Online groups have two major benefits: You can cut costs, and you get a report on results more quickly — usually within a day rather than up to four weeks later for traditional focus groups.

The downsides of online groups include:

  • The authoritative role of the moderator is lost. In focus groups, the moderator keeps the discussion on target and makes sure everyone participates.
  • The session doesn’t benefit from group interaction. Together in a room, participants provide valuable information as they react to other people’s comments, allowing the moderator to guide the way into deeper and more revealing discussions.
  • Reading nonverbal cues is impossible. The moderator guides the discussion using these cues, which reveal as much about the participants’ thoughts and feelings as do verbal expressions.

Telephone-conference focus-group sessions have advantages and disadvantages similar to online sessions. You’ll have to decide whether their cost savings outweigh their loss of control, body-language feedback, and an undistractive environment designed to focus attention on the topic.

Cost-cutting tips

Professionally run focus groups cost an average of $5,000, and experts recommend a minimum of two sessions so you involve a representative cross section of your customers. Professional data analysis could cost you an additional $2,000 per group.

If necessary, you can reduce focus-group expenses by doing some of the work internally. You could save some cost by finding the focus-group participants yourself. And you could forego the $2,000 professional data analysis by having your focus-group sessions videotaped and then reviewing them with your management team. Online and phone-conference focus groups also cost less. They average $3,000 per session. You can also consider writing the focus-group questions yourself, but a skilled moderator will probably be able to write better questions that provide more useful information.

REAL-LIFE EXAMPLE [top]

Helen Baichwal, founder of a fine housewares and design firm in Southern California, decided two years ago to "do a sort-of Martha Stewart thing."

Baichwal wanted to set up a new division that would provide low-cost, but still high-quality, versions of her top-line designs. Her target customers would be lower-income people who "have champagne tastes they can’t afford — unless the prices are down-to-earth."

But to take the risk of branching out in this way, Baichwal says, "I wanted to know if there really would be a market in the lower-income neighborhoods I had my eye on." She had samples made and hired a market research firm to conduct two focus groups with her target customers. The moderator asked participants bottom-line questions, such as, What do you like about this table and chairs? What don’t you like about it? Would you buy it? What would you pay for it?

The response, Baichwal says, convinced her there was indeed a market for the products she had in mind. "We’re in our second year of production and because we keep prices affordable and quality remains high, we’re struggling to meet demand."

DO IT [top]

  1. Know your objectives. Exactly what information do you want to get out of the focus group? Put time and effort into formulating the questions the moderator will use in his or her script.

  2. Control your blend of market research methods. Would the quantitative results of a survey research project be more useful than the qualitative results of focus-group research? Put estimates of the costs and benefits of each method on paper. Is it worth doing both? If you consider doing any of the research in-house, be sure to compare the opportunity cost of other work not done in the time spent on research to the cost of outsourcing the research.
  3. Do consumer comparisons before hiring a market researcher. Make sure your candidates have the experience and expertise you need. Ask how many sessions each has held in the last year. Ask for a detailed proposal covering how each researcher plans to approach the assignment on your behalf. You’ll find more tips in the Quick-Read "Issues to Consider When Outsourcing Market Research."
  4. Help the moderator do his or her job. Don’t interrupt the session because you think the moderator is taking the wrong approach or getting unhelpful responses. Trust that he or she has the experience to handle the task.
  5. Listen with an open mind. Welcome negative comments because they cue you to make changes that will help you improve and market your product or service.
  6. Think of other ways to use focus groups. As a second-stage business, you might benefit from running focus groups periodically — every six to 12 months — "just to see how we’re doing." A focus group also could be helpful to test the waters with consumers on a new ad campaign, or a new policy or procedure you’re planning to introduce.

RESOURCES [top]

Books

Handbook for Focus Group Research, 2nd edition, by Thomas L. Greenbaum (Sage Publications, 1998).

Focus Group Directory. Volume 2 of Green Book: International Directory of Marketing Research Companies and Services (American Marketing Association New York Chapter, annual).Depending on how often you need a directory of focus-group researchers, you may want to look for this book at the nearest library with a business reference collection.

Internet Sites

Journal articles

Focus Groups. Subtopic search at Inc.com.

Articles by Thomas L. Greenbaum. Groups Plus.

"Let Customers Sell Themselves," by Barry Feig. Frozen Food Age 50:10 (May, 2002), 20.

Article Contributors

Writer: Kathleen Conroy

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