At one of its consumer research clinics, Lear Corp. presented what it thought was a knockout product: rough and tough carpeting resembling a Brillo pad.
The company showed the product to construction workers — the target market (aka “burly guys”). The interior supplier thought they would clamor for durable carpeting like this in their work vehicles.
Instead, they didn't like it. “‘Oh, that would scratch my feet,’” Lear's Terri Tahnoose recalls them saying.
“I had a hard time imagining that they were going to be barefoot, but that was their perception of the carpet,” Tahnoose, director of consumer research, says of the construction workers. “We were very focused on the function, not that it needed to look soft and plush.”
For Lear, consumer opinion is king. One of the world's top interior suppliers, Lear conducts consumer research at every step of the vehicle-development process and after a model goes on sale. The supplier even studies a potential market extensively before it wins a contract.
At any given time, Lear has at least one consumer clinic going on somewhere in the world. The company currently is trying to predict what features people will want on vehicles up to 2020.
During an August visit to Lear headquarters in Southfield, MI, consumers arrived two at a time every half hour over three days to inspect and interact with communications and telematics devices. At the event, Lear disguises its own system and that of a competitor (“kind of like those Pepsi commercials,” jokes Tahnoose) to gauge consumer interest, detect any frustration associated with the new technology and see how quickly people learn to use the devices.
Consumer clinics can be eye opening, as engineers and designers discover what people think of their products. “And sometimes it's tough news (for Lear's engineers),” says Tahnoose of the studies. “You know they absolutely love (a product), but they'll never pay more than this for it.”
Among suppliers, consumer research primarily is a province of interior specialists such as Lear, says Scott Upham, senior vice president-automotive and transportation research for Harris Interactive.
Most consumer clinics, he says, are conducted by auto makers contemplating new vehicles. Upham says suppliers do their research “because the OEMs are telling them they have to, and they have to provide some sort of value-add to be a full-service supplier.
“Lear might be developing a new system, and they want to take that consumer feedback and use it as ammunition in their next presentation at General Motors Corp. or Ford Motor Co. in order to get Ford to sign on the dotted line. So they're using it in a very savvy way to get these car makers to buy their products.”
But Lear's Tahnoose says suppliers benefit as much from their data-gathering efforts as their customers, saying, “I don't understand how you can really develop a product without some understanding of the consumer and their needs.” She says Lear is doing more consumer research because it is more involved in the vehicle-development process.
Upham says Tier 2 and Tier 3 suppliers are starting to study consumer trends, too. He says Harris now is working with a Tier 2 that is supplying glass to a Tier 1, which integrates it into a module such as a roof system or sunroof.
“So they're doing research on what tints consumers like — what features, what knobs. Do they like sliders? Do they like the kind you can crank? Are they willing to pay for the automatic sunroofs, etc.,” he says.
There are two types of consumer research. Qualitative studies involve focus groups or an event where “you're looking for verbatims,” as Upham puts it. Companies are asking consumers, “What do they like, what don't they like, what should be added,” he says.
Quantitative research involves surveys conducted, until recently, by phone or mail. Today, e-mail or Web-based surveying is becoming more common.
Qualitative surveying can be done online as well, Upham says, when it is not essential to be present to evaluate a vehicle or component. “I would say probably 30% of all clinic work or face-to-face type of research, focus groups, is going to migrate online,” Upham says.
Lear finds its participants by working with recruiters, including J.D. Power & Associates and R.L. Polk & Co., the latter of which maintains a massive database of vehicle-registration data. Lear provides recruiters with instructions about the type of people it wants for a clinic. For instance, Lear may ask Polk to find female luxury SUV owners within a certain age and/or income bracket.
Consumers can profit nicely from their participation. Lear pays people based on their salaries, so a doctor may receive a couple hundred dollars for a half hour. “If you are recruiting somebody that's a luxury-car owner, or a doctor, they're not going to take $50 to spend two hours of their time doing a clinic,” says Upham. Lear pay ranges from $1 to $300 and depends on whether participation is in person or via mail.
Money is not the only carrot to lure participants. “If you want to get female luxury-car owners, an incentive might be an exclusive Louis Vuitton bag that they can't get anywhere else,” he says.
Lear tries to find people with no automotive ties for their Michigan clinics, but Upham says Harris largely avoids the area for auto-related research because so many residents work for GM, Ford or Chrysler Group or are related to someone who does. It's “not even worth doing” a consumer clinic in Detroit because there will be bias, he says.
As for the reliability of the research, Upham says, “There is that disconnect between what people say they're going to buy and what they end up really buying.” He says willingness to buy a specific vehicle feature usually rests on whether or not it is part of a package.
Upham says Harris has stopped asking people how they would spend $2,000 on options for a vehicle because “they always gravitate toward the same things: audio systems, entertainment systems and leather seats, which is not reality.”
When consumer research goes wrong, as in the case of BMW AG's much derided iDrive instrument-control system or the Pontiac Aztek, both Upham and Tahnoose agree the culprit is either too little consumer research or studying the wrong generation of buyers.
“That's why doing your homework upfront, spending maybe hundreds of thousands of dollars, doing a market-research project would save you millions down the road,” says Upham.
Tahnoose admits research can be risky but says Lear must ensure it is going in the right direction with its offerings. “For us, I think it's improving our odds, but ultimately we have our customer and we have the consumer, so we're really working with both,” she says.
Either way, construction workers can rest assured their work trucks won't have scratchy carpeting.
