Focus groups are good for one thing: Measuring consumer perceptions of existing products:
“When you hear ‘Y107,’ what do you think of?”
“How would you describe the music you hear on X102?”
Focus groups are not good for testing brand-new ideas that are outside the experiences of the group members.
(“We’re thinking of launching a new morning show hosted by an Hispanic female and a Russian male; what do you think of that idea?”)
And focus groups are not good for asking people to tell you exactly how you should change your radio station and then giving them exactly what they want.
Yes, all listeners will tell you they’d prefer that you schedule all of your contests at exactly the same time each hour or each day. But if a particular contest is intended to increase Time Spent Listening, then doing what your listeners prefer will damage your TSL.
But take heart, Radio People; ours is not the only industry that makes this mistake. I’ll now tell you about a company that several years ago threw away $1.2 billion (yes, that’s BILLION) by slavishly following the dictates of focus group members.
The Aladdin Hotel & Casino was a new Las Vegas resort that was built for $1.2 billion.
The hotel opened with 2,567 rooms. The main casino covered 100,000 square feet, while a second casino took up another 30,000 square feet.
Twenty restaurants. And a 130-store enclosed shopping mall.
A year after opening, they filed for Chapter 11 bankruptcy.
Oh, if only they’d listened to me…
The property’s dismal performance could be attributed largely to two huge mistakes.
Mistake #1
You couldn’t see the front entrance from the street.
Mind you, this wasn’t some tiny boutique in a shopping mall. This was a huge resort hotel-casino.
In the history of the world, no one ever had said, “Gee, here I am at Caesar’s Palace/The Mirage/Whatever, but I can’t figure out how to get inside the place!”
Until the new Aladdin opened, that is.
Mistake #2
When London Clubs International, the geniuses in charge of creating the new resort, conducted focus groups, they asked people, “What do you dislike about other hotel-casinos?”
And everyone said, “You know what I hate? Whenever I enter the hotel — to check in or to return to my room — I have to walk through the casino area. If I want to dine in one of the restaurants, I have to shlep through the casino to get there. I HATE THAT!”
You see, other casino-hotels deliberately force patrons to traipse through their casinos, knowing that quite a few of them will drop some bucks in a slot machine or at a craps or blackjack table on the way.
As someone who has spoken at many events housed at hotel- casinos, I can tell you it truly is quite annoying. And if I had been a focus group member, I would’ve heartily agreed with that complaint.
Well, London Clubs International listened, and the Aladdin was designed so that you could enter the hotel (assuming you could find the entrance) without having to set foot in the casino.
And you could visit the mile-long shopping center without going through the casino.
In fact, you could spend your entire stay at the Aladdin Hotel & Casino without even once breathing a particle of stale casino air.
And guess what? The casino “drop” (how much money is wagered at the casino’s various games) was far below the Aladdin’s original projections.
With the much smaller “drop” comes a much smaller “hold” (the amount of the total “action” that the house keeps; the total amount wagered minus the total amount won by players).
In other words:
1. The focus group said, “Don’t make us walk through the casino.”
2. The company strategists said, “Okay, we won’t make you walk through the casino.”
3. Far fewer customers walked through the casino.
4. The casino won a lot less money.
5. Bankruptcy.
Please keep this story in mind the next time you let your focus group program your radio station.
Comments on this entry are closed.
That´s what I´m always saying. You´re so totally and completely right! RED BULL for instance would never have been launched, if people had been asked before, if they´d like a soft drink tasting like pink candy sirup with extra sugar.
Ahh yes – Focus Groups !
But Dan – what about when your station won’t even use a focus group to find out anything at all … such as : who their targeted audience is – let alone what the ratings are – what the personalities are like, etc, etc ad nauseum.
“Focus groups – nah! We used them once 10 years ago – we just go off those numbers and just muck about with the numbers of the leading capital city station to suit us” ????????????????????????
WHAT? We’re shooting fish in a barrel while blind folded without that info, yet we are told that such-and-such are our demographics so write/produce/talk etc to them. OK where’s their proof for that statement?
Just how can we convince management that focus groups / ratings / any type of information would be beneficial – rather than what our PD & MD think are our numbers ?
God help us!
From a very frustrated Jock at an un-named station banging his head against the nearest wall.
Ahhh that feels better – I can at least quantify that! Take 2 Asprin – yes 2 and that is the rating for that headache!
Just wondering if the whole “30 minutes commercial free” idea came from a similar type of focus group?
“We hate listening to ads!”
“Okay, we’ll pretend like we don’t really play ads…(even though we want you to hear them because they’re kind of important to us in terms of revenue)”….
I conducted a focus group of whether I should comment, and they said no. So….