Blog

Going with Your Gut versus Big Data Analysis: Which Works Best for Product Innovation?

  • January 2014
  • Posted By Janet Muto
  • 0 Comments

There is a battle going on between emotion and logic in enterprises across America. In past decades, “gut feel” was often the dominating force used to make critical product development decisions. Executives steeped in a deep knowledge of their company and their industry would rely on intuition, a hunch, a notion, that a product would work to give it the go-ahead.

More recently, in the era of Big Data, crunching numbers and using algorithms as a sort of Magic Eight Ball to determine product decisions is all the rage. “Numbers don’t lie,” quant proponents insist.

Which is the correct strategy? Both, I would argue. It is not an “either/or” proposition. To succeed at developing breakthrough products while minimizing risk and maximizing outcomes, you simply can’t afford to have one without the other. They both are vital components of the process, the ying and yang of product development.

Reading Rebecca Borison’s blog post about Starbuck’s omnianalytics approach to new product development on Mobile Commerce Daily made me wish I had been to the NRF’s Big Show in New York this year. In a session on omnianalytics, John Goedert, manager of operations testing and innovation for Starbucks, raised some thought-provoking ideas related to the intersection of gut feel and analytics. Here are two notable highlights:

Gut feelings are important – but validation is mandatory

“You always have to have flexibility in any process that you do, and gut feelings are really great. But there are also processes that you can put in place to make sure it is also rigorous because even if you think it is the best thing in the market you want to test to make sure.”

The truth is that there is often a conflict between gut feel and the data. We commonly see this when working with creative agencies who believe that the right answer is based on their professional intuition and that research is a waste of time. For their part, researchers may ignore the value of gut feel in developing a creative hypothesis from which to work. Without a strong guiding theme based on a central hypothesis, they may become lost in the data or fail to ask the right questions, unearthing only rational factors but overlooking emotional ones.

What is needed is a combination of gut feel (a hypothesis based on deep knowledge of the customer) and validation through well-constructed research that is precisely designed to test that hypothesis . Quants can’t begin to do their work without a starting point that’s generated through deep insight and synthesis. When gut feel works, it’s magic. However, gut feel is also very often wrong. Idea generation is a key component behind product innovation and should be encouraged, not stifled. Creative exercises relying on gut input may generate dozens of product ideas. Data analysis is used to efficiently weed out the untenable ideas, leaving only the one that actually shows genuine promise. To that end, every company should validate their product, service or advertising program with solid research.

Big Data can be whatever you want it to be

“With all of this big data that’s coming in, it is very easy to make the results come out the way you want it, and if you are not transparent along the way, you may be telling the wrong kind of story.”

Data helps to validate, but it isn’t the be all and end all. In the end, it is the result of a human endeavor, and humans aren’t perfect.

The fact is that you can prove anything with data. An ex-agency executive recently admitted to me that in agency world, creatives often design their research in such a way to ensure that their preconceived gut notion is validated. Objectivity is thrown out the window, and the research becomes nothing but a waste of time and money.

In the work we do with our clients at High Start Group, successful research outcomes rely without exception on an objective benchmark (baseline) so all that we measure has a basis for comparison. Only when you do multiple tests using the same metrics can you really understand the impact of the new product, service or creative.

As John Goedert notes, “There’s data for everything but you want to align on how you’re going to use it and be consistent.” In today’s world of big data, there are an endless variety of methods for measurement and analysis. The key is to determine what you want and need to measure – and then stick with your game plan, even when – especially when – it tells you that your gut was wrong.

So, don’t give up on your gut – if you know your customers and market, you are probably already doing “big data analysis” in your gut, but, don’t get stuck there. Validation is critical to the success of any product idea or test.

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *