A focus group is a form of qualitative research in which a group of respondents are asked about their feeling, opinions, perceptions, and attitudes toward a new product, concept, or service. This is used typically in the discovery phase when organizations wish to create an overall direction for a new product concept. They can also be used in the evaluation phase as a last check before launching the new product, to test market the new product, name the new product, explore packaging alternatives, or to gain feedback regarding market launch strategies.

Typically, a focus group is an interview conducted by a trained moderator with a small group of respondents. The respondents are recruited on the basis of a predefined criterion, and could include demographics, attitudes, buying behavior, or other behavior signals. Quite often, the interviews are held in a specially designed room with two-way mirrors, allowing the organization the ability to monitor the interactions via two-way mirrors. Ideally, the interactions are informal and conversational, allowing the respondents to give views that may or may not be applicable to the research. An advantage of the focus group is the relatively low cost compared to customer visits, although the costs can ramp up dramatically if the research is to be done on a nationwide basis and it is necessary to gather responses from multiple locals throughout the country.

In the case of focus groups, often the group discussions produce data and insights that would be less likely to appear during other VoC methods, such as surveys or one-on-one interviews. As participants listen to others comments and experiences, quite often this will stimulate memories, ideas, and experiences in other participants' minds. This is sometimes called the group effect, where group members engage in a cascading result where one comment leads to another and to another and to another.

A popular form of focus group is the customer brainstorming session. This type of program is often deployed at customer events in the form of B2B markets. In this case, we gather a group of users and deploy formal brainstorming methods to come up with new product ideas. It is recommended that you kick off these focus groups in an inverse brainstorming exercise to uncover user wants, needs, points of pain, product shortcomings, and deficiencies. This is sometimes called PAIN storming and uncovers the fundamental drivers of new opportunities. This helps to focus your innovation process on the specific needs of the customers.

Here are the steps and the things you must identify before you engage in a PAIN storming process:

Once these "pains" are identified, the group is then led into possible solutions to address the identified deficiencies.

While focus groups may provide great customer insights if they are executed properly, my own personal observation is that there are many things that can go wrong in a focus group if the moderator is not very well versed in his craft, and in this case, the negatives can greatly outweigh the positives. A potential issue with focus group research can manifest itself because of the actual process itself. If the focus groups are held in a special room with two-way glass or in a laboratory setting with recording instruments, the participants may hold back or attempt to answer the questions the way that they think the moderator wishes them to. A secondary issue with focus groups arises from the potential of observer dependency. The researcher's own analysis of the data collected from the session can influence the results obtained.

But the largest downside I have observed when using focus groups is "groupthink" or "peer pressure", which is similar to things that have been known to happen in a court of law in the case of juries. Sometimes a particularly outspoken or knowledgeable individual will voice his or her opinion, and based on the way they present their information, it is construed as fact, and opposing viewpoints could be perceived as being wrong-headed or uninformed. Here, the skills of a trained moderator cannot be underestimated and the moderator must ensure that this does not happen.

Douglas Rushkoff, in his piece Get Back in the Box: Innovation from the Inside Out, has found that focus groups are often useless, and frequently cause more trouble than they meant to solve, with focus groups often aiming to please rather than offering their own opinions or evaluations, and with data often cherry picked to support a forgone conclusion. An excellent example of this was the disastrous introduction of New Coke in the 1980s.

In the 1940s and 1950s, the Coca-Cola company owned the beverage market with 60% market share. By 1983, it declined to 24% and Pepsi was outselling Coke. The research showed that young drinkers preferred the sweetness of Pepsi, which was attributed to its gains. Coca-Cola commissioned a secret effort, Project Kansas, to test and perfect a new, sweeter flavor for Coke.

The Coca-Cola marketing group conducted taste tests on focus groups. While the results of the focus groups were strong, with the majority favoring the new formula over the old formula or Pepsi, there was a noticeable and distinct segment who felt angry and alienated at the very thought of Coke changing their formula.

Regardless of this, the Coca-Cola management decided to move forward with the new formulation, and in April 1985, New Coke was introduced and production of the original formulation ended the same week. The new formulation was a direct contradiction to the advertisements that had been running for years. Spokesman Bill Cosby would tout the less-sweet taste as a reason to prefer Coke over Pepsi and Coke had long been marketed as "The Real Thing", constant and unchanging, which had, apparently, now changed.

After its introduction, Coke recognized an 8% gain versus sales from the previous year. Despite New Coke's acceptance with a large number of customers, a vocal minority resented the change in the formula and were very vocal about sharing their views—just as had happened in the focus groups. Company headquarters received a 300% increase in call volume with over 400,000 calls and letters expressing dismay and disgust at the decision. According to a psychiatrist that Coke had hired to listen in on the calls, some people sounded as if they were discussing the death of a family member when lamenting the loss of the original Coke.

Talk show host and comedians mocked the switch. Ads for New Coke were booed when they appeared during a baseball game in Houston. Fidel Castro called the New Coke "a sign of American decadence" and the "Old Cola Drinkers of America" organization was formed to try and persuade Coke to reintroduce the old formula or sell it to someone else. Finally, due to pressures from the bottlers who had also received their share of negativity from their customers and friends, and who were hinting boycott, Coke moved the discussion from whether to reintroduce the old formula to when. Coca-Cola announced the return of the original formula in July, less than 3 months after it was retired, and renamed it Coca-Cola Classic.

There are a number of lessons to be learned from the Coke experience. First and foremost is the cautionary tale of how to interpret data from focus groups. The messages were clear from the focus groups that there would be a small but vocal minority who would find great dissatisfaction with changing from Coke to New Coke, but the company ignored the feedback as it only represented a small percentage of the focus group participants. Another interesting note is the flawed way these focus groups and taste tests were held. In these tests, drinkers were given small samples to try out. Had the marketing team conducted ethnographic research and conducted home-use tests instead of taste testing via focus groups, they would have understood that although many consumers react positively to the sweeter taste when drinking a Pepsi or New Coke in small quantities, it may become unattractively sweet when drunk in quantity, while Coke may be more attractive for drinking in volume precisely because it is less sweet.