Derek Harp got down to business before going into business.
The chief knowledge officer of Vigilinx Inc. and co-founder of LogiKeep, which was acquired by Vigilinx in February, conducted extensive market research on what corporations wanted in a network security service more than a year before actually offering LogiKeep’s product on the market in May 2000.
“We wanted to build the greatest mousetrap people actually wanted, not just one we thought was really neat,” Harp says.
So instead of trying to sell something, then seeking users’ input, LogiKeep asked for input, then decided what services to offer. It used a software mock-up was during market research, and potential users spelled out their desires for features and functions.
“We built a better product that way, at least that’s my perception,” Harp says.
How he did it
Focus groups and phone interviews with companies in LogiKeep’s target audience were used to conduct research, at a cost of $60,000 — a total Harp considers an excellent investment.
“It was one of the best-spent $60,000 I think we’ve spent in our history,” he says.
Between early 1999 and August of that year, the company conducted six two-hour focus group sessions — one each in Boston, Atlanta, New York and Chicago, and two in Washington, D.C.
Participants were senior-level decision-makers in the area of security at companies with which LogiKeep hoped to do business. LogiKeep got feedback about what, exactly, they wanted out of a network security service — and how much they were willing to pay.
Harp says using focus groups in the security world gave his company a better idea of what his potential customers needed to have addressed first. Meeting businesses’s needs depends on budgeting and level of importance, he says.
“Maybe we were offering them shelter, and they were still looking for food,” he says.
Mike Mozenter, who started working with Harp last November as an interim VP for LogiKeep, says he probably wouldn’t have suggested the use of focus groups for Harp’s business prior to its launch.
Mozenter says he has seen focus groups done with “a good number of companies,” but Harp’s use of them is unique since they aren’t commonly used in the world of technology. The bigger issue in that realm is market feedback, he says.
That’s not to say Mozenter thinks the $60,000 investment didn’t work to LogiKeep’s advantage.
“They uncovered some features and functions that they would need for customers,” says Mozenter, who is also a partner with Bizlogx, a Columbus company that outsources sales and marketing services.
Had he been working with Harp during LogiKeep’s initial product development, Mozenter says he would have suggested the product be tested in the marketplace prior to seeking outside input. Service reps could have presented the product to customers displaying the highest need for them. Then, they could have obtained “an off-the-record” opinion from those users, he says, and the product adapted accordingly.
One problem Mozenter admits he has encountered with technology-related companies that operate this way is they often stress the value of their products without listening enough to what consumers need or really want. Using logic and challenging assumptions are two keys to fighting this problem, he says — and focus groups can utilize both components.
“A focus group is sometimes a real eye-opening experience,” he says.
Focus group pitfalls
Although using focus groups early on is something Harp says he wouldn’t have done differently, he warns there can be some pitfalls.
- Pricing information that was obtained was not as helpful as he had hoped.
What participants said they were willing to pay and what they actually were willing to pay didn’t match.
“You have to look at it through a special lens,” he says of information recorded in focus groups. “You can’t take it as gospel.”
- What people say can be of little value if those being questioned aren’t the decision-makers for the product you are selling.
“You have to get the right people in the room,” Mozenter says.
That is a main factor in why Mozenter doesn’t think focus groups are the best use of funds in some companies’ early stage of existence: “You’re not sure who you’re trying to sell to.”
- Participants can be caught up in a presenter’s “sales mentality,” causing feedback about products and services to take a backseat to buying. And, the buying that can result may be emotional but not true; participants can be tempted by what’s being sold while they’re in the focus group but lose interest outside of that context.
“Just because you can get someone excited doesn’t mean they’ll buy,” Harp says. How to reach: Derek Harp, 336-4340
C.J. Cross ([email protected]) is a free-lance writer for SBN Magazine.