How You're Being Misled By Your Market Research

Market research is valuable and important, but are companies placing too much emphasis on it and being misled? As the world continues to evolve, the needs and attitudes of your customers change too, so it’s important to continually check in to find out how to position your product or service to reflect this.

Much of this direction will come from market research, but it’s vital to understand its limitations and how to mitigate them. Organizations that rely on multiple sources will get a more rounded picture and are less likely to be misled. Keeping in mind the following pitfalls will help you to get a clearer understanding of your audience and allow you to plan your marketing accordingly.

Misleading statistics and poor representation

The three main stages of creating statistics from data are collection, processing and presentation, and errors can occur in any one of them. Assessing the quality of data is crucial before any business decisions are made based upon it. Common mistakes that create misleading statistics include:

• Underrepresenting your target audience: Small sample sizes can skew your results and are less likely to represent a wide demographic across your customer base
• Asking leading questions: The phrasing of a question can directly influence the answer, so surveys must be carefully worded to avoid creating bias
• Confirmation bias: Conducting market research in a way that confirms a preconceived outcome is of little value and can be avoided by engaging in third-party review, so no single approach is able to skew the results
• Not carefully labeling visualizations: Presenting data in graphs and charts can make it look particularly dramatic if the axes aren’t labeled in an appropriate fashion
• Assuming one variable causes another: Just because two things happen at the same time doesn’t necessarily mean one caused the other

Inaccurate and boring customer surveys

Customer surveys have long been a cornerstone of market research, but a rigorous and critical approach must be used to ensure they’re not inaccurate. Easy traps to fall into include surveys that are too long and asking similar questions in a row, as these can lead to customers becoming bored and not contemplating their answers as they rush to finish the questionnaire.

Most data analysis involves producing averages and establishing overall trends, but by completely dismissing outliers you could be stepping away from some interesting insight. Nobody is suggesting you should make huge business decisions based on the outliers alone, but they could provide the basis for innovation and further market research, as disruptive ideas help to drive product evolution.

An alternative to traditional market research

Instead of conducting what could turn out to be inaccurate surveys, it’s suggested that carrying out tests could be a more effective form of market research. That’s because they demonstrate actual decision-making behaviors instead of relying on customers to report on what they believe their preferences are.

What people believe their motivators are can be very different to the subtle forces that impact them in reality. If they’re not fully aware of them then they won’t be able to communicate them to you in a survey and therefore your data will be skewed.

The importance of timing

The timing of your market research will also have an impact on how valuable it is. After all, you’ll find it harder to implement changes to a product or service if it's nearly ready to launch. As well as being costly, significant adjustments could put timescales at risk, so conducting market research at this stage shows an unwillingness to take findings on board.

Instead, it should be used to discover if the innovation solves a problem for customers early on in the development process. As well as influencing the design of a product, such interaction with potential customers can also help to determine how much they’d be willing to pay for it. If this is less than the cost of production, then significant adjustments will need to be made.

To get the maximum benefit from market research, it’s worth repeating the process throughout the product’s evolution. That way you can ensure it’s developing in the right direction and small changes that aren’t effective can be reversed before things have gone too far.