NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

During a focus group for Famous Footwear, a large U.S. retail chain, women were asked which factors influence the shoes they buy. The participants responded that price and comfort were the two most important. Yet when the facilitator took a peek under the table, she saw that their shoes were neither cheap nor comfortable.

In a similar vein halfway around the world, community members of a Kenyan Islamic coastal village were asked in a survey how often they prayed. Nearly all reported “five times a day.” But after a full week of observation, that number appeared closer to zero.

In both examples, our traditional research tools fell short. Women told the focus group facilitator what they assumed was the ‘right’ answer, and villagers reported what they thought was ‘expected’. In place of the usual methodologies – surveys and focus groups – the researchers were pressed to use their own eyes.

That’s the premise of ethnography. Beyond traditional research, ethnography implores us to get our hands dirty with first-hand observation and daily participation in the lives of our consumers. And while often thought to be the terrain of anthropologists studying far-off cultures, ethnography is increasingly taking center stage in seemingly unlikely places – it’s no longer unusual for major corporations to film consumers at the dinner table or shop with them at the mall.

Alison Demos, Director of Ethnographic Research at Ogilvy & Mather, does just that for some of the world’s biggest brands. Demos explained in an interview that there’s often a sizable gap between what people say and what people do – like the Famous Footwear focus group participants. And if you can find that gap, “that’s a very powerful place for business to play.” But finding it isn’t easy, because the most important clues are usually unspoken.

For example, while conducting ethnographic research for Reese’s Peanut Butter Cups, a popular brand of candy, the Ogilvy team observed a peculiar pattern – consumers seemed to keep their Reese’s hidden. When asked why, one man responded that in each package, “there are two, so you don’t really share.” It was what Demos calls a ‘nonsense statement’, one that pushes you to explore a deeper, hidden logic. And indeed, they found it: unlike an ordinary, single piece of candy, Reese’s format of two individually wrapped pieces in every package made consumers nervous that they’d be expected to share.

That golden insight drove an advertising campaign based on a highly specific – and ownable – dimension of pleasure. As Demos noted, no set of survey questions would have led to that insight; the virtue of ethnography lies in being vigilant for the unexpected. Certainly, few consumers would openly admit to avoiding the pressure to share.

Though that’s not to say consumers are deliberately misleading. Perhaps the Resse’s consumers aren’t consciously aware of their sneaky impulses. And if they’re unaware, then asking them won’t get you very far. This isn’t a far cry from our challenges at the BoP. Commenting on social innovation in low-income markets, Tim Brown and Jocelyn Watt of the design firm IDEO wrote: “Although people often can’t tell us what their needs are, their actual behaviors can provide us with invaluable clues about their range of unmet needs.”

M-PESA, a mobile-based financial services company in Kenya, is a case in point. The enterprise’s service was originally envisioned as a money transfer tool: to pay bills, or send remittances, or purchase airtime. But in 2009, researchers observed that users (mostly women) were using M-PESA to save, keeping increasing amounts of money on their phones instead of transferring it. By observing an unexpected behavior, M-PESA identified a key unmet need – savings accounts – and has since launched a full mobile banking service in partnership with Kenya’s Equity Bank, putting Kenya on the path to becoming the most-banked country in Africa.

As M-PESA can attest, employing ethnography is not just a corporate trend. A recently published book featuring a chapter on Innovation for the BoP is teeming with examples of enterprise successes and failures that hinged on intimate observation. For BoP practitioners operating in radically different cultural contexts across the globe, getting as close as possible to understanding our target audiences is crucial. That’s ultimately the goal of ethnographic research: to explore the gritty details so that we develop a keen sense of empathy – a deep, textured understanding of the consumer experience in which we come as close as possible to sharing it.

But sharing experience demands that we first reverse the traditional research process: instead of staying in the driver’s seat by asking the questions and shaping the conversation, ethnographers let the participants do the leading. And it’s usually when we’re sitting in the passenger’s seat that we come face-to-face with the game-changing insights that inspire our most disruptive innovations.