It is essential for entrepreneurs to conduct market research in order to determine whether a new venture is viable and determine the consumer demand for different products and services. It may be particularly helpful to smaller companies seeking to expand their operations.
Market research is an important tool to gain insight into consumer preferences. However, poor research practices may result in inaccurate conclusions regarding what customers want and how they are likely to act. Several factors contribute to market research errors, including biased consumer surveys and premature conclusions regarding survey results.
The term “accurate market research” refers to data that represents the customers’ (or target audience’s) needs and helps improve the success of new campaigns, products, and services. The majority of claims relating to accuracy are associated with surveys among large numbers of individuals. A confidence level of 95% or a range of error of +/- 3% lulls us into comfort.
In spite of the fact that these claims provide reassurance that the research is accurate, they do not capture many of the sources of inaccuracy in market research. There is no doubt that some of the most inaccurate research comes from large-scale surveys, rather than research that is more targeted.
Analyzing market research data can lead to the common error of mistaking correlation for causation. Correlation is the statistical relationship between two variables in which one variable tends to rise or fall when the other variable rises or falls.
As an example, windshield wiper usage in cars is likely to be strongly correlated with rainy weather. In no way should this be construed as implying that windshield wiper uses causes rain. Poor decisions can be made as a result of jumping to conclusions about correlations in data.
Surveys are the most common form of market research conducted by businesses. A survey asking a series of questions to consumers, whether it be a telephone survey, a written questionnaire, or an online survey, can provide a company with a large amount of information quickly. There are numerous sources of errors in market research that can be attributed to biased survey questions.
It is not uncommon for companies to inadvertently ask consumers leading questions which results in them selecting certain survey answer choices over others. As an example, if a survey states that experts believe something to be true and then asks whether respondents agree, the question would be biased since people tend to believe the opinions of experts.
Participants who are qualified and articulate are the foundation of good research. When it comes to driving engagement and honest responses, online qualitative has a greater chance of succeeding than in-person qualitative. The importance of understanding how your provider ensures quality participation cannot be overstated.
Over the past few years, the number of low-quality participants and “research farms” has increased substantially. Ask your research partners how they filter out “professional survey takers” who complete hundreds of surveys per day and create dozens, if not hundreds of accounts within panels in order to qualify for more studies. Is it possible for them to track how many other surveys the respondent has completed over the last 24 hours not just on one platform, but across several platforms as well?
Ensure that your survey link prevents users from completing multiple surveys until they qualify. Disqualify people who select “fake” answers to screen questions and make it difficult to determine what the key screening criteria are. Use sample providers who go beyond digital fingerprinting to apply text analytics to context- and quality-check open-ended responses.
In order to reduce survey bias, it is important to carefully consider the way in which survey questions are asked. A short question that does not appeal to emotions and uses plain words is more likely to elicit unbiased responses than a long question that contains colorful language. It is also possible for survey results to be biased if adequate answer choices are not provided. In order to give respondents a choice of possible answers, the answer choices should cover the full range of possible answers or provide a “fill in the blank” option.
When it comes to identifying errors in marketing research and analyzing data, entrepreneurs with a background in statistics and marketing can provide an advantage. When it comes to crafting surveys and analyzing data, business owners who do not possess expertise in statistics and market research should consider working with a consultant or mentor.
Organizations can suffer tremendously if accurate market research is not conducted. This can lead new product teams to focus on building features that will not ultimately provide value to the customer when it comes to innovation projects. In the case of branding projects, it can result in a failure to capture market awareness or adoption. Additionally, it may result in lost opportunities relative to the competition for customer experience projects.
You should always begin by developing a clear hypothesis regarding what you expect to find and how that might differ depending on the audience you are targeting. You will be able to hone in on the people you really need to speak with so that you do not define your audience too narrowly or too broadly. Furthermore, it will provide you with a good basis for determining the number of people you need to interview in order to obtain accurate results.
You should also focus your research efforts on understanding the consumer’s beliefs in the context of what they are doing at all stages of the purchase process. The ability to influence behavior is difficult, so participants can be more accurate in their responses when they understand their situation and the context for decision-making.
Finally, consider the advantages of agile consumer insights platforms versus in-person research or surveys. With online qualitative and quantitative tools, you have the opportunity to identify the right target audience and gain a deeper understanding of the “why” behind an answer. If participants are responding in the comfort of their own environment without being pressured to please anyone, they are more likely, to be honest in their responses. It is more likely that your team will act upon the results if they can see the responses of actual people and ask follow-up questions if necessary.
Finding the right participants for your research project is the greatest challenge in obtaining accurate results. In the area of recruiting the right people, agile qualitative offers a distinct advantage over traditional surveys.
As you focus on a specific audience, you are able to determine whether someone is a truly relevant contributor based on their responses. It is much more valuable to be able to verify the accuracy of each response, even if you receive fewer responses.
Identifying the right people is the key to achieving accuracy, so the industry must continue to promote new ideas and methods in order to accomplish this objective.