Editor's note: Alan Zimmerman is founder and principal of Radley Resources, a Westfield, New Jersey research company specializing in business-to-business research. His 25 years in various international and domestic marketing positions include vice president of marketing with E.F. Hauserman, a movable wall and office furniture manufacturer, and marketing executive for Westinghouse Furniture Systems.

Jim Carroll, marketing manager for American Lighting (name and company changed to protect the innocent) had heard a lot about focus groups. He wasn't sure what exactly constituted a focus group, but other managers at the parent company talked about focus groups and he liked the sound of them.

Jim decided to convene his own focus groups to discuss some potential new product prototypes coming out of R&D. Since his research budget was practically nonexistent, he decided to do all the work himself. Jim felt the people with the most valuable opinions on new products were dealers who sold these products to electrical contractors. Acting quickly, he and his assistants chose two target cities for the research. He called several dealers in Atlanta and Chicago and convened a meeting at his factory.

Jim thought this would be a good opportunity to improve the selling atmosphere with these dealers. He chartered the company plane to pick up each group and fly them to his headquarters. The night before the meeting he hosted a large banquet and arranged for the president of the company to make a speech about the importance of the new products to the success of American Lighting.

The focus groups were held the next day. Jim decided he needed some technical expertise in the room so he invited each new product manager to make a presentation of their prototypes. A typical presentation began with the product rationale followed by the solutions to customer problems provided by the new product and the potential sales to be realized by each.

After each presentation, Jim asked the assembled group, "Well, what do you think?" Both groups were highly enthusiastic about all of the new products presented. Jim felt very good and ordered full speed ahead on development.

The products went quickly through final prototype stages, pilot manufacturing, and full scale production and were introduced with advertising to electrical contractors, sales training, and dealer training programs. A year later, one product was highly successful, one showed marginal results, and three were in the doldrums.

Now Jim was faced with finding out what went wrong. "I don't understand it. We used the focus group technique that everyone talks about, but the products didn't sell. How could this be?"

What went wrong

The succinct answer is: Jim did about everything wrong that he could possibly do. Let's look at what he called a focus group and see what mistakes were made.

First, he violated a very basic rule of business-to-business focus groups: Never put together a group of individuals who see themselves as competitors. Individuals who work for competing firms can make an effective group, but these individuals have to see themselves as professionals, more loyal to their profession than their company. So, for instance, architects who compete with one another or data communications managers working for competing firms who tend to identify with their professional duties can make an effective focus group. Directors of marketing from competing firms or competing dealers in the same geographic area will generally not make an effective group if the discussion can give one a competitive advantage over the others in the room.

A second error is using a focus group occasion as a selling situation. The speeches by the president as well as the use of the company plane and the wining and dining of subjects were mistakes. All of this tends to color the responses. Some participants will react by being very kind and telling the organizers what they want to hear. Others will work hard to show their independence and be more critical than they otherwise would be. In either case, their true feelings are not being elicited.

The third mistake is using the "owners" of the new products to present the products. This has the effect of chilling any true reactions. It's only human nature for respondents not to want to "insult the baby with the mother in the room." This situation can also frequently lead to confrontation between the inventors or sponsors of the new product and the respondents.

Another error that's easy to spot in Jim's organization of the focus group is that he didn't develop a discussion guide. His very general question, "What do you think?" is not designed to elicit specific comments in specific areas. Respondents tend to be lazy and can take the easy way out without sharply honed, probing questions.

Mr. Carroll's experience may seem like an extreme case but in our experience in the business-to-business arena it is all too common. Generally speaking, marketing people in industrial areas have not had much exposure to marketing research. When they have, it is usually consumer oriented and relates more to large scale attitude surveys or focus groups that probe feelings which are usually not appropriate for business-to-business markets. A few firms organize what they call "focus groups" with employees for discussing sensitive issues, but the atmosphere is not right to get at real feelings.

Getting the best results

Many business marketers use the term "focus group" without any real understanding of the requirements for developing useful information. To produce the best results from focus groups, the organizers must create a non-judgmental atmosphere. It is best if the respondents are randomly recruited and don't know each other. In many cases it is difficult to recruit individuals who are not acquainted, especially in business-to-business market segments. But random recruitment establishes a better atmosphere than having one respondent recruit another.

Respondents must be put at ease when they arrive at the groups. We always assure focus group members that "no salespeople will call" and we strongly urge our clients not to call and recriminate with participants after the groups. We do, however, ask respondents if they wish to be contacted by the company. If so, focus groups can sometimes be a valuable source of sales leads.

We believe focus groups are uniquely applicable to many business-to-business markets. Since large, quantitative studies are not meaningful in market segments of only a few major customers, speaking to a select few of the most important buyers can yield important qualitative as well as quantitative information. Most business markets operate on the 80/20 rule, meaning the largest percentage of purchases are made by a small number of all buyers.

Focus groups are the recommended method for research when:

  • A firm needs to learn about a new field.
  • A company wants to assess the reaction to new products, services or advertising concepts.
  • A firm wants to fully understand how customers think about buying or specifying decisions or how they perceive suppliers.
  • Buyers need to see a demonstration of the product in order to react to it.
  • Very large products (yet small enough to fit in a conference room) must be shown to buyers.
  • A manufacturer wants its customers to have hands-on experience with a product.
  • Confidentiality is critical, such as for a new advertising campaign or a new product prototype.

In these cases, many clients decide to use focus groups to get a good reading on a particular problem.

Recent projects

Here are some examples of how businesses have successfully used focus groups recently:

  • A multiproduct firm wished to determine whether a unified sales force handling all its product lines would be seen as an advantage by its target segment. We arranged focus groups with specifiers in New York, Chicago, and Los Angeles. Respondents were shown samples of potential product offerings and advertising. The end result was a clear rejection of the proposal. Specifiers were far more concerned with a salesperson's expertise in any particular line. As respondents saw it, this outweighed the small inconvenience of dealing with several salespeople from the company. The firm decided against implementing this costly and potentially de-stabilizing reorganization.

  • One firm was contemplating the introduction of a new and very different office furniture system. We held focus groups in New York, Chicago, and Los Angeles with independent interior designers and facility mangers of large corporations. To do this, the firm developed a large prototype of the system and shipped it from facility to facility. The firm also provided a videotape and a small scale mock-up. The moderator gave a 45-minute presentation so that the respondents would fully understand the new concept. While the product was generally well-received, there were some aspects that required redesign and the firm proceeded to do that, thereby postponing a multimillion dollar investment in its plant.
  • Another firm was planning to introduce a new landscape lighting product line. Focus groups held in Atlanta and northern New Jersey with electrical contractors, lighting consultants, landscape architects, and homeowners gave this firm invaluable information for designing advertising, promotion, and distribution. First-year sales were well above expectations as a result of the information developed.
  • A large telephone company wished to determine customer perceptions of a new service to be provided on corporate premises. Four focus groups were held in New York and Chicago with telecommunications managers representing major corporations. The sponsoring firm found out that the need for this service was limited to a very small number of heavy users. This segment was easily identified from only four focus groups and the client developed a targeted marketing program to reach this small number of important customers.
  • Another client was marketing a computer-based electronic presentation system. The client had to decide whether to proceed full speed with this product or de-emphasize it. Focus groups were held with people responsible for the selection and purchase of this equipment. One of the most important findings from this research was that the respondents were not the current customers of the research sponsor. In addition, the product was perceived to perform significantly worse than its major competitor. These facts convinced the client to reevaluate any further investment in the product line.