#Market testing

Avoid focus groups, consultants, and market research

Imagine if the first iPhone had a stylus and a retractable keyboard? That's what Apple believes would have happened if they relied on focus groups to inform the design. To Apple, customers don't innovate, they only iterate what they have seen before. So people actually don't know what they want until you show it to them.

But this doesn't mean to stop listening to customers. Instead know your customers so well that you know what they want before they realize it themselves.

Don't put faith in market testing

As Joe Coulombe wrote: "Each year, 22,000 new products are introduced to the grocery trade, most of them from big guns like Procter & Gable or Colgate, who have conducted elaborate test marketing before going nationwide. Ninety percent of these new products fail."

Instead, Trader Joe's takes a different approach placing small orders of new products and if they sell they order more—if not, leftovers go to charity.

Test every product in the harshest conditions

There is no 'pay to play' to get your product on a Trader Joe's shelf, like in most supermarkets. Instead, every product goes through a rigorous Tasting Panel where only 10% of the products actually pass the test.

These Testing Panels are designed to remove any romance and story from the product. "There's nothing in there that makes it comfortable...It's like a cold war interrogation booth, because we want the products that succeed to go through this like ultra-Darwinian exercise to say that they could stand up even to that harshest light of critical evaluation."

If a product passes with a 70% or more approval rating, it is only then that Trader Joe's asks about the price. Then the bargaining begins and "if the cost is too high and we can't get it for less, we won't buy it."