It goes without saying (but we will say it anyway just in case there are some lingering skeptics out there) that market research, when it is done right, is one of the smartest, safest and surest investments that a business can make. After all, what is more useful for better and faster decision-making than reliable customer, competitor and marketplace data?
However, with this being said, market research is not a panacea, magic wand or a silver bullet. What’s more, there are some market research problems that can creep into the process and obfuscate the analysis -- and one of the biggest and most common is when businesses fail to properly test and validate statistics.
Here’s the background: in web copy, blog posts, press releases and other business content, impressive statistics fly fast and furious — e.g. “80% of businesses use at least one SaaS tool” or “92% of businesses have a social media presence” and so on. Presuming that the numbers are accurate, interpreting these statistics is easy and straightforward.
However, when the context switches to market research, things aren’t as straightforward — and that’s where market research problems erupt. For example, let’s say a market research study reveals with a 90% statistical certainty that customers prefer online self-support vs. phone support. Excited by this “overwhelming majority,” a business decides to pull resources from its call center, and invest in its online knowledge portal.
What’s the problem here? It’s that a 90% statistical certainty does NOT mean that a high percentage of customers prefer online self-support! Rather, it means that there is a 1 in 10 chance that the data collected by the market research project was a random pattern. The number of customers who truly want online self-support could, in fact, be lower than 90%. Let’s say in reality it’s 70%. That’s still fairly high, but it hardly justifies a major resource reallocation from the call center to the knowledge portal.
Well, guess how this story plays out? The business completes the reallocation, but instead of seeing their NPS go through the roof, they get a flood of angry calls, emails, and social media posts from customers who want to know why the phone support is so lousy (or non-existent).
What’s more, the business will almost certainly blame the “flawed market research” for their customer service woes, when in fact, the problem is rooted in misunderstanding how statistics are interpreted in market research vs. the rest of the business communication world.
The good news is that market research does indeed have mechanisms for solving this problem, such as testing observations and insights with multiple controls, which are assembled as part of a customized experimental framework with other relevant variables. Returning to the example above, the business could test to see if customers who buy certain products, hail from certain industries/sectors, or are in a certain professional group or age group are more likely to prefer online self-support or phone support. Ideally, the tests are repeated to increase the statistical certainty, and create truly actionable data.
Learn More
At Communications For Research, we ensure that instead of grappling with market research problems, our customers are positioned to make smart — and safe — decisions. To learn more, contact us today to chat with co-CEO Colson Steber.
Through discussing your business goals, Colson can devise a market research plan for your company and help you determine which methodologies will produce the most accurate result.
For more information on the 5 Most Common Mistakes Market Researchers Should Avoid, watch this video:
