The Myth of (No) Market Research at Apple

A dangerous myth that has developed particularly among technology industry entrepreneurs is that market research is a waste of time; they point to Apple icons Steve Jobs and Steve Wozniak. They’re wrong – even though Jobs practically evangelized on this point:

“We do no market research. We don’t hire consultants. The only consultants I’ve ever hired in my 10 years is one firm to analyze Gateway’s retail strategy so I would not make some of the same mistakes they made [when launching Apple’s retail stores]. But we never hire consultants, per se. We just want to make great products.”

The cult of personality and Apple’s unquestioned success has led many companies, not only in the tech sector, to think that they can do without market research. Even worse, some have deduced wrongly from Jobs’ insight that market research can actually harm more than it helps.

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Market Research Leads to Business Success and Attracts Investors

Sorry to burst some bubbles, but Apple does do market research. As a result, they have had more business success, according to Forbes magazine:

The reality is that Apple listens very closely and systematically to its customers. Apple is one of the premier exponents of the Net Promoter Score for systematically listening to customers and managing its business in response to what they hear. Fortunately, with the wonderful new book being published in September 2011, The Ultimate Question 2.0 (Revised and Expanded Edition): How Net Promoter Companies Thrive in a Customer-Driven World by Fred Reichheld with Rob Markey, we have a blow-by-blow account of exactly how Apple does listen to its customers. Listening to customers is at the center of Apple’s business processes.

Fred Reichheld’s The Ultimate Question, which was published in 2006, was a comprehensive account of best available expertise on measuring customer delight—the new bottom line of 21st Century businesses. It showed how asking a single question, “How likely is it that you will recommend this product or service to a friend or colleague?” on a 0-10 point scale, and tracking the ratio of “promoters” to detractors—the Net Promoter Score or NPS—was the best and most practical single measure of customer delight.

NPS is critical for the daily management of Apple’s 300-plus stores and translates into very measurable ROI: “Where a typical electronics store averages $1,200 per square foot in sales, mature Apple stores exceed $6,000 per square foot—the highest productivity in retailing of any kind.” That doesn’t just come from Apple being Apple; it comes from listening to customers and adapting their business processes so they can keep those customers happy – and sell more Apple products.

Want to learn more about market research? Register for the Market Research v2.0 workshop happening December 7 at SFU Harbour Centre