How focus groups can help your business

You may have designed the perfect product or found a unique market gap for your business, but does anyone want to buy it?

Of course, that is the critical question, and a focus group can help you understand what your customers want, why they want it, and how you can hone your product or messaging to help secure a sale.

What are focus groups?

Originating after World War II, focus groups were initially called "group depth interviews" because they bring together a group of people to probe a specific topic with a moderator's assistance.

That is the format they have taken ever since: up to 10 strangers in a room responding to questions for about 90 minutes while assessors watch out of sight, often on the other side of a one-way mirror.

Online focus groups can be video discussions or synchronous or asynchronous text-based conversations. Restrictions on group gatherings accelerated the increasing popularity of this format during the pandemic.

What is the purpose of a focus group?

The purpose differs depending on a company's needs. Startups frequently use focus groups to find product-market fit. They seek to understand whether their proposed solution addresses their customers' problems and pain points.

"The best way to do that is to have an open-ended discussion," says Matt Foley, founder of FocusGroupIt. "You can do that one on one, but it's often more efficient to do it with a group."

Established businesses use focus groups to determine whether they are delivering on their promises, how they can improve customer experiences, the contours of the customer journey, and reactions to new features and functionality.

How focus groups can help a business grow

Focus groups give businesses valuable strategic insight into their customers or potential customers, which they can use to pursue promising ideas, spend smartly, and adjust course adroitly. Being able to operate with informed, strategic intent allows businesses to make decisions that favor growth and sustainability.

Laurie Tema-Lyn, founder and president of research firm Practical Imagination Enterprises, recalls a multiday study she conducted for a manufacturer of healthy snack foods, which helped the company zero in on a slate of new products to develop.

The focus groups "gave them a real-world look at their shoppers and the guidance for the new products that would be appealing to those segments," she says. "It was a very condensed, cost- and time-effective, and creative process for the client."

Here are some ways that focus groups help companies enable smart growth.

• Vet ideas early. Getting input from your market before you've put a lot of time and money into a new project helps ensure that you're pursuing potentially lucrative avenues from the start of your product-development process. "I've tested hundreds of products and startup concepts over the years, and it doesn't have to be that far along," Foley says. "I've presented things that are just a paragraph description of what we intend to build one day."
• Use resources wisely. When you have a sense of your idea's strengths and how your proposed offering might serve your customers, you can strategically direct resources to enable success. "If you wait too long, you invested all that time and money, and you might be totally off the mark in terms of what your customers want," Foley says. By using focus groups, on the other hand, "you can pivot early."
• Improve processes and customer experience. Companies that run focus groups to assess their existing customer experience can discover how to improve their appeal and boost customer satisfaction and loyalty to gain a larger market share. Conducting internal focus groups with staff members can help you assess ways to streamline operations and processes, Tema-Lyn says. She recounts one instance in which women were uncomfortable with how they were being treated by their company and were open about those experiences in a focus group run by a third party. Tema-Lyn's team put together a report for management with concrete suggestions regarding what the company could do to improve female employees' workplace environment. Such improvements make company culture more functional and employees happier, which have major effects on various business metrics.

The cost of a focus group is worth it

Running a focus group isn't free—organizing one typically runs from $4,000 to $12,000—but think of that as a worthy investment in your business' strategic growth.

The sooner you can learn what your target market wants, the sooner you'll be on the path to greater success.