Why Market Research Can Be Misleading

If it’s true that “Numbers don’t lie,” how come so much data is misinterpreted? According to Nate Silver, now popular political data blogger and tracker for the New York Times, numbers can be misleading when analysts don’t have the historical context for interpreting them. For instance, in retrospect, Silver in his book The Signal and The Noise, notes that although data existed to strongly suggest the 9-11 attack on The World Trade Center, humans did not have the experience to correctly interpret the signals. Silver writes, “the 9/11 Commission deduced, the most important source of failure in advance of the attacks was our lack of imagination.” In other words, we could not imagine or conceive of such a horrendous attack, so no matter what the data indicated, the intelligence community could not see it. In business, false interpretations of data are not as critical as with the intelligence community, but ignoring trends and/or the failure to imagine possibilities can lead to businesses going out of business long before their times. It’s why market research is important in making business decisions from next year’s color trends for fashion houses to the copy and graphics choices in an ad. If we always produce the same ads, or always stock the same inventory as the year before, our business will appear stale to our consumers, and we will ultimately fail to be positioned correctly in the near or longer-term future. How can you get data? Trade associations are always a key source as are consumer surveys you do on your own. The value of the former is that the data is usually analyzed by a credible industry executive. The danger in the latter is bias or misinterpretation. One of the best customer surveys is done by GoDaddy, the url management and web hosting service. After every service call a simple questionnaire is sent to each customer with just two short questions. Was your question or issue answered to your satisfaction? Would you recommend our service to others? Each question has a ranking from 1-5, with 5 being strongly agree.The simplicity of the questions allows for little misinterpretation of the data and doesn’t allow GoDaddy to determine new products or services, but does allow them an ongoing benchmark of their customer service. It highlights how highly GoDaddy considers it’s customer service as key differentiating factor, and gives clues to effective market research.
  • Only ask questions that supply meaningful answers – those you know you can interpret and use the data to change behavior. In Go Daddy’s case they can use the scores to easily understand which CSRs are worth promoting, or weeding out.
  • Don’t ask too many questions, or consumers will jump ship. No one has enough time to take more than a few seconds to answer questions.
  • Don’t ask questions if you won’t do anything with the data. It’s a waste of everyone’s time. When framing a question, ask yourself, “what will I do with this information once I know it?” If the answer is “nothing,” abandon the question.
The Walk-away: When it comes to using data for determining advertising decisions, don’t go it alone. Ad effectiveness depends on many factors including but not limited to resulting sales. The questions, research methodology, and analysis are best left to experts.
This entry was posted in Advertising, Lessons from Leaders, Market Research, Rhona Bronson and tagged , , , , , , . Bookmark the permalink.

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