We can relate to the Remote Locator because the three of us have all lost our remotes many times (although none of us have left it in the fridge . . . yet). The Remote Locator resonates with us as consumers, and chances are that you relate too. But when we tell the Magnavox story in our seminars (and at cocktail parties), someone often challenges us by suggesting that the product people at Magnavox were just lucky. Didn't a bunch of engineers sit in a windowless room somewhere and dream up the idea for the Remote Locator?

No. Magnavox was tuned in to their market and created a breakthrough product experience that addressed a problem, one that people were willing to spend money to solve. Magnavox was also tuned in to the best ways to articulate this powerful idea and establish a connection with buyers. How are we so sure? Well, to launch the Remote Locator and build some media buzz, Magnavox released a survey of American households conducted by Opinion Research Corporation:

Magnavox tuned in to a problem that television buyers really have (as opposed to adding another ten inches to screen surface area), created a product experience to solve it, told the market about the powerful idea (partly through the data in the survey), and then communicated to the market in ways that people wanted to hear. The Remote Locator was a resonator.

The concept of unresolved market problems may be foreign to people familiar with more traditional ways of developing products and services. Most organizations probably think up ideas in the shower, the conference room, or the R&D lab. But what if you took a different approach? What if your organization sent someone—we don't care what the person's job title is—out into the market on a continuous basis. This person would call on customers but, even more importantly, would meet regularly with noncustomers as well. The intent would not be to sell anything but to just listen and observe. The first question might simply be "How's business?" or "What are your biggest challenges?" What if, through open-ended questions and good conversations, you began to understand what problems noncustomers have but can't articulate? How do they get along without your product? How can you leverage your distinctive competence to make their lives better?

To be really skilled at finding unresolved problems, you need to consider two kinds of needs within your buyers—expressed and un-expressed problems. Sometimes we call these "stated needs" and "silent needs." Very often, if you can uncover silent needs through skilled interviewing, they end up being the golden nugget of information that will result in a creating a resonator.

Russell Shaw, whom we met in Chapter 1, was skilled at finding out from people what their stated needs were. You may recall that he drew up a list of those needs, including things like "I would like to avoid realtor's commissions if I can, but I hesitate to try selling my home myself because of the risks involved," and "If my realtor is not meeting my expectations, I don't want to be stuck with a long-term contract." These are the market problems that buyers freely express to anyone who asks.

However, people at Magnavox, through skilled interviewing, managed to uncover the silent needs people had around losing their remote. This process is tricky because, interestingly, people frequently can't articulate a problem directly. However, you might be able to observe, listen, and make an inference. This is particularly true when the person you're speaking with assigns biases based on what your organization does. For example, if a rental car company had approached us, we might talk about what's wrong with rental car companies at airports (because we frequently travel and use rental car companies at airports—that's our bias). So it takes a skilled interviewer to draw out the concepts that would lead to Zipcar.

Did the idea of a Remote Locator resonate with you? This silent need does with many people. Such problems take probing to uncover. After all, if the problem of lost remotes was something people were shouting about to anyone who would listen, then another TV manufacturer would have developed it much sooner. Listen, learn, and see if you can identify problems whose solutions can be turned into product offerings. Remember: had another TV manufacturer thought to ask the right questions, they too could have uncovered the market problems the Remote Locator solves, and created a resonator.

Sometimes when we talk about market problems on the speaking circuit or in our seminars, people will jump in and challenge us on the idea of market problems. Some want to insist that their products don't solve problems, so instead they must do a "missionary sell" or "create the need" so that people will want to buy. Have you ever tried "educating the market" in order to launch your product or service? It's really tough, isn't it? That's because offerings developed via an inside-out, tuned out process don't resonate, so the only hope is to muscle your way in with lots of sales resources and a big advertising budget. Even then, such products are unlikely to succeed.

Other people insist that their product or industry doesn't solve a problem. A typical argument might go like this: "If it were about solving a transportation problem, wouldn't everyone just buy the cheapest car?" Well, no, because cars solve lots of problems besides the need for transportation. Volvo has developed distinctive competence in solving safety problem for buyers.^[19] An expensive, late-model SUV in your driveway solves the problem of showing the neighbors that you're doing very well financially. Or a red sports car might help solve the problem of finding a date for a middle-aged man on a Saturday night . . .

The idea for Quicken first came to Scott Cook when his wife was complaining about balancing her checkbook. Cook, then an assistant product manager at Procter & Gamble, teamed up with Stanford engineering student Tom Proulx to form Intuit, a company focused on solving the various problems associated with managing personal finances.^[20]The duo recognized that the PC would soon offer a replacement for paper-and-pencil personal accounting. But, unlike most entrepreneurs, they didn't just rush out to build a product. Before writing a single line of computer code, Cook tuned in to his market by interviewing people to find out how they managed their personal finances. He personally contacted upscale consumers who already owned or were likely to purchase PCs, in order to understand, in great detail, the tedious task of managing a household budget. To gain an even deeper understanding of his potential customers, Cook hired his sister-in-law to contact hundreds more people.

Intuit was not the first company to identify the market opportunity. In fact, there were forty-six competitors when Quicken launched (Cook and Proulx joked about having forty-seventh mover advantage). But Intuit enjoyed a tremendous market edge over its competitors. Unlike the other guys, they didn't just guess what buyers needed in a personal finance software product. Instead, through the hundreds of interviews, Cook identified deep insights into what their market valued. Intuit understood that their main competitor was not the other software packages in the market. It was a pencil. A pencil was what people were using at the time, and it was extremely easy to use.

In order to beat a pencil, the team set as its goal that a novice PC user should be able to write a check in Quicken within fifteen minutes of opening the package. By starting with the in-depth interview data, Cook created a new software application that was based on a checkbook metaphor. Thus, Quicken "looked" just like the tool people already used for dealing with their finances. It didn't require them to change any ingrained habits. Quicken created a breakthrough experience for more than fifteen million users.

As Intuit began to grow, the company established "Follow Me Home," a program where Intuit employees regularly observed consumers using the company's products at home. The motto "Right for Me," as in "Right for Me" products and services, was bred into the company culture. This fundamental way of running the company is totally consistent with what we've said several times already in these pages: your opinion, although interesting, is irrelevant. The information Intuit gathered from being tuned in to market problems allowed Intuit to unleash a powerful idea: Quicken ends financial hassles.

Intuit connected with buyers and, because the ideas resonated, Quicken quickly became the bestselling product in the market. At the time of this writing, the company was generating $2.6 billion in annual revenue, growing at 10 percent per year, and basking in its status as one of America's most admired companies and best places to work. By constantly monitoring what's going on in the marketplace and understanding the problems that buyers have, Intuit has consistently met or exceeded business projections since its inception. Wall Street has rewarded the company with a best-in-class stock performance.

When Scott Cook first built Quicken, he actually went into homes and studied the process of how families paid bills and managed their finances. He didn't rely on intuition, or competitive intelligence, or the advice of smart friends. He also didn't assume that his own problems were universal. Instead, Cook directly observed the problems his potential customers actually had.

By far the best way to collect unresolved market problems is to visit buyers face-to-face in a nonselling situation, in a place where talking about your market category makes sense, and by preference on the buyer's home turf. For example, if your company sells business-to-business products or services, you should meet with buyers in their workplace. If you sell outdoor products for the home market, why not have conversations in people's gardens? A sporting goods manufacturer might go to a team practice or interview travelers at a favorite vacation spot. That's why insurance agents are taught to sit at a customer's kitchen table, the spot where significant family decisions are made.

Setting up such interviews is simple. Contact representatives of your target market by phone, e-mail, or in person. You can find people who are part of your buyer persona by using lists of people who have visited your company at a trade show, by purchasing names from industry magazines, or by looking at the inquiries to your Web site. Say that you have nothing to sell but are simply asking for thirty minutes of their time to better understand how they live (or how their business works, or how they exercise, or how they shop for clothes, or how they take care of their children's meals, or whatever makes sense in your case). Tell them you're trying to learn how to build products that will make them more effective or efficient (or a service to help them have more fun). It is important that, when you make your request, the subjects know you're not in sales. Say something like, "I'm not selling. I'm trying to determine what products to offer next year." One person we know uses the following line: "The sales department won't let me sell. I couldn't sell you anything even if you wanted to buy."

Then you need to ask open-ended questions that you don't have the answers to. Most importantly, you need to listen. Take notes as the person is speaking. Even better, do the interview paired up with someone else. That way, one person can interview and one can write.

Tuned In Buyer Interview Checklist

Again, we often hear from skeptics when we describe this approach. People ask us why buyers would give a complete stranger thirty minutes of their time. Well, we've learned that many people do respond to this approach, and there are two primary reasons. First, people like talking about themselves and their problems, so if you make it perfectly clear that you are not selling anything, then many people will want to speak with you. Second, there are also people who are willing to talk because they think they may help a smart organization create a product that helps solve a problem for them. They think, "Hey, if it makes my life better, I'll give you thirty minutes."

We hear again and again that the secret to success in business is to focus on customers. While we certainly agree that customer service is a good thing and that keeping your existing customers happy can result in more sales, we want to emphasize once again what we said in Chapter 2—that your existing customers are only one component of applying the Tuned In Process.

The best way to create a resonator is to focus on the entire market by categorizing your buyers into three segments: your customers, evaluators, and potential customers. (Throughout the book, we use "buyers" to mean your total market, the entire universe of people you might do business with.)

The exact proportions may vary, but most businesses operate in an environment where customers and evaluators make up a small percentage of the total market. That means you'll need to spend most of your time with potential customers to find your next resonator. Understanding the needs of these three classes of people will give you a broader perspective on the market potential of your future offerings.

We often hear people say, "We have our own sales force [direct sales, telesales, or via a distribution channel]. Our representatives are talking to prospects all the time. Why can't we just ask the sales-people about the problems in our market?" The flaw in this approach is that the sales situation and salespeople's very skills, are notably poor at finding unresolved problems:

Most salespeople must balance the tasks of facilitating the buying process and simply peddling things buyers don't want. In some industries, they struggle mightily with this. (Who really likes walking into an auto showroom?) For this reason, many evaluators hate the selling process and will do almost anything to avoid it. Thus, sending a salesperson to learn about buyer problems can turn a relationship adversarial before the conversation even begins.

As we emphasized in Chapter 2—your opinion, although interesting, is irrelevant. The same goes for the opinions of your family members. We often hear of organizations that use family members as a proxy for interviewing people in the marketplace. A team member might say, "I have a teenager, so I know how teenagers think." No, you don't. Of course, the teenager who lives in your house is definitely a representative of some buyer personas, and you should interview her as part of your research. But she is just one data point in the sample.

Howard Upton, executive vice president of the Petroleum Equipment Institute from 1951 through 1987, tells a story about sitting in a business luncheon with oil industry executives forty years ago.^[21] The group was listening to an advertising executive discussing the idea of introducing self-service gas pumps. The executives dismissed the concept because, although they might have been inclined to pump their own gas to save five cents per gallon, they said that their wives would never participate in such an activity. These well-paid executives missed one of the most revolutionary marketing developments in the energy business on the grounds that it wouldn't appeal to their own spouses.

We're convinced that typical organizational culture leads to the same kind of tuned out thinking. Nobody interviews people first to learn about market problems. Thus, development efforts result in products that become bloated, overgrown inspirations that company insiders consider cool but that people aren't prepared to plunk down money to buy. However, once a company's leadership focuses on being tuned in (paying attention to the needs of the marketplace), they can begin to develop breakthrough products like the iPod—a product that solved an unmet market problem (a lack of easy-to-use MP3 players) and that over a hundred million people were prepared to spend money on.

The best way to find unresolved problems is to interview buyers in an appropriate setting. During the interview, you should ask open-ended questions about their lives or work habits to discover problems your organization might solve.

But there are several other ways to conduct research:

While conferences, events, publications, and blogs are all good ways to learn about unresolved problems, don't let these methods be a substitute for doing direct interviews. The tuned in leader gets out into the marketplace and meets with buyers.

Disneyland wasn't created by an innovator. It came about because Walt Disney himself was tuned in to market problems. Walt visited amusement parks and observed what people were doing. He identified market problems and created Disneyland to solve them.^[23]For instance, existing parks sold individual tickets to each attraction. This practice caused delays, so Disneyland sold books of tickets. Rides were divided into letter categories, running A through E, and so were the tickets: an E ticket got you into an E ride, and so on. Existing parks also had some attractions for adults (the beer tent, for example) and some for kids (rides with small seats). Walt noticed that this tended to break families up, so he banned alcohol and created attractions that the entire family could enjoy together.

Since the existing parks were only open during the summer season, they attracted seasonal "carny" workers. Walt noticed they tended to be transient (and thus did not become skilled at their jobs), as well as gruff, foul-mouthed, and scary to children. Disneyland was the first park to stay open year-round and hire full-time workers, so it could hire the best people. Finally, to further distance Disneyland from existing parks, Walt insisted that "cast members" (not employees) always wear "costumes" (not uniforms) when "on stage" with "guests" (not customers). These semantic differences helped to distance Disneyland from other parks and reinforce the idea that the new Disney park was special.

Walt Disney created a resonator. The Disney theme park experience solved the need for a family-friendly place for some fun and adventure. By getting tuned in to the market, he understood that people wanted a clean, safe park that was more than just a park. "Disney doesn't build rides," he once said. "Disneyland adventures tell stories and sometimes put you on cars, boats, trains, or other vehicles, not for riding but to carry you into and through an exciting story." Disneyland has been a huge hit with families ever since, spawning similar Disney parks in Florida, Tokyo, Hong Kong, and France.