Why Market Research Fails
Successfully implementing a market research strategy can have vast benefits for companies of all sizes; however, market research blunders are easy to make and can have long-lasting negative consequences for your business. We’re commonly asked, “Why does market research fail?” and the truth is there’s not usually a singular reason. Sometimes companies make one major mistake that fundamentally flaws their research, but making a series of smaller errors is sometimes just as damaging. Taking some time to thoughtfully prepare a market research strategy, and strictly adhering to the fundamentals of implementing research, can help you avoid making major mistakes while launching a market research project.
Below, we’ve listed some of the mistakes commonly made by market research agencies. If you’re afraid your market research will fail, carefully avoid the following blunders:
Using the Wrong Methods
Sometimes teams decide to use the research method that is easiest but not necessarily the best. It’s usually tempting to choose the “convenient” method of data collection, but if that method is ineffective for the target population then that data is probably useless.
For example, many companies launch internet surveys in place of doing onsite surveys or interviews. Internet surveys are sometimes cheap and effective, but they can also be terribly inefficient if you have no reliable way to guarantee survey participation. Similarly, companies will sometimes hold focus groups to talk with many customers at once in a public – and this can be an effective means of collecting market data – but some topics are too personal/intimate to discuss in person (think sex, love, or happiness) and your customers might prefer the anonymity of an online interview.
Further, companies sometimes expect too much from interviews, surveys, and focus groups. Realistically, there are many questions that are better answered by performing more “immersive” research – such as participant observation or video-ethnography.
Asking the wrong questions
Designing interview/survey questions that are appropriate for your research can be tricky. Questions can be “wrong” for many reasons. Sometimes questions are too broad, sometimes they’re too specific. An open-ended question that’s too broad will result in the interviewee rambling on about a number of issues not specific to your research topic. Conversely, questions that are too specific will result in people giving brief one-word responses. Similarly, close-ended questions sometimes result in participants being “pigeon-holed” into choosing an answer that does not reflect their beliefs or feelings on a topic.
Talking to the wrong people
Recruiting participants to participate in your study is one of the most difficult aspects of any market research study, and it’s especially difficult to recruit a representative sample of your target audience. For example, it might be really easy to find study participants that love your company, but it’s sometimes difficult to find people that hate your product/service; however, in the name of good research, it’s important to talk with both of these groups if you stand any chance of understanding why people love/hate your product.
Poor Interviewer Skills
Novice or untrained individuals can often generate inaccurate or biased interview data. Most commonly, interviewers unintentionally bias participant responses by “leading” people to conclusions they wouldn’t have otherwise made. For example, an interviewer’s tone or word choice might “lead” an interviewee to answer in a way they think the interviewer wants/expects. There are a number of similar nuanced mistakes that can be made, and stopping this from happening at the ground level is generally dependent on good training and a foundation in research methods.
Faulty Data Management
For every hour of data collection, there are many more hours of data management. Faulty data management tactics can sometimes inadvertently ruin entire projects. There are a number of methods for meticulously inputting, cleaning, interpreting, and sharing data. Attention to detail is crucial in data management; don’t let laziness cause your market research to fail.
Doing Too Little
In an effort to make market research less-costly, companies frequently attempt to rush studies. This results in market research studies with narrow-minded designs and small sample sizes. Attempting to make business decisions based on low-quality studies can be difficult, and at times it can lead to disastrous results. Efforts to keep studies cost-effective are obviously important, but being too stringent can cause your market research to be inefficient and counterproductive.
Ignoring the results of your research
Companies have to be willing to accept what market research tells them – even if they don’t necessarily like the results of their own research.
Kodak Camera Company is a classic example. In the early days of digital photography, Kodak actually produced a significant amount of market research suggesting that digital cameras would be popular and convenient; however, because the company was so invested in producing paper photographs, they decided to shelve their digital camera products. Failing to adapt to the market, despite what their market research was consistently telling them, has obviously resulted in multi-billion dollar losses to Kodak. In hindsight, it seems pretty obvious what Koda should have done, but the reality is that companies are often set in their ways and choose to ignore market research.
The Single Reason
Commonly, research fails because agencies choose to do what is convenient – they pick the “easiest” methods, ask poorly designed questions, and recruit participants that don’t reflect the target audience – rather than taking the extra effort to collect data that is pertinent to business decisions. The easiest way to avoid making these mistakes is by sticking to the basics of conducting good research – become scientifically literate regarding the research methods that are commonly employed, choose the methods that are best for your research questions, fully commit to the entire research process (including data management), and dig in for the work ahead.
What Do I Need for Market Research?
Market research can be a daunting undertaking, especially for small- or medium-sized business owners that don’t have experience with conducting their own research. We’re commonly asked by business owners what they need for market research and our answer is always “it depends.”
The specific needs of your market research will greatly depend on the type of information that will benefit your business. Depending on the size and breadth of your study, you might not need much in terms of technology – but you will always need a lot of human capital. That being said, there are a few tried and true staples that are beneficial in all market research projects.
Below are a few important things for launching any successful market research project:
Questions & Goals
Before you can effectively launch any type of market research initiative, it’s necessary to have a firm understanding of what your business is trying to learn/achieve. Before beginning any project, it’s necessary to be able to clearly articulate your specific research questions. Without developing specific questions, research often becomes tangential and useless at building a better business.
Develop Specific Research Methods
Research methods are simply a very specific set of plans that designate how the research will be conducted. After you’ve developed your questions, it’s time to develop very specific methods. Research is not the time to shoot from the hip or initiate half-cocked plans. Every good market
research strategy requires a specific set of plans or methods for collecting and interpreting data.
Having well-defined methods in place will guarantee that you’re collecting the proper data to answer your questions, and will maximize the value of conducting research.
An Experienced Team and/or Team Leader
Market research sometimes appears to be simple; however, just because something looks simple it doesn’t mean that it’s actually easy. Having a research team that’s experienced, primarily composed of individuals that have received professional training, will ensure that you’re collecting valid data.
There are many tiny nuances that can greatly impact your data collection; we recommend that you speak with an expert, but if you’re eager to learn more on your own you should consider picking up a book on market research or behavioral science methods. Paying for an experienced team might be costly upfront, but it will be beneficial to your bottom line in the long run.
Participants
If you want to do any kind of primary data collection—such as interviews, surveys, focus groups, etc.—you’re going to need to find people to participate in those projects. Participant recruitment can be the trickiest part of your data collection. Never forget, it’s important that you do your best to capture a representative sample of your target customer. If your customers are females aged 34-40, your participants should fall into that category; similarly, if your primary customers are outdoor runners, then you need to include runners from a variety of different backgrounds.
As a rule of thumb, descriptive surveys require 100+ participants, while descriptive interviews will require 30+ participants. But these are just the minimums, the more people participate in your study the more data you will have!
Software
You don’t need to reinvent the wheel. Computer software has made life easier for many aspects of data collection and interpretation. For example, if you want to launch an online survey there are several software packages to consider (Qualtrics, Survey Monkey, etc.), for focus groups you can use transcription software, and for secondary data analysis, there’s software that can help you sort through big data.
That being said, some of these software packages are not user-friendly and can be expensive for small businesses to afford. If you foresee your business regularly conducting market research, investing in these software packages can be extremely beneficial.
Location
The old saying “location, location, location” has never been truer. If you’re collecting data in person, you need to pick a location that provides you access to an accurate sampling of your target audience. Oftentimes, unless you’re running a small study, it’s necessary to collect data at multiple locations to accurately reflect your target customers. Admittedly, negotiating for access to venues can be difficult, but it’s important that you don’t settle on subpar locations.
If you’re launching an online study that doesn’t require a physical location, you still need to think
about when/where/how the link to your study can be distributed. Oftentimes, businesses indiscriminately e-mail blast everyone they can possibly put on a list. This approach will get you results sometimes, but oftentimes businesses benefit from a more thoughtful distribution process.
Patience
Patience is a necessary virtue when conducting research. Remember, data collection is something that occurs over time. Small studies sometimes generate information that is immediately groundbreaking, but oftentimes market research requires some time to understand the bigger picture. Don’t get focused on preliminary findings that only explain the tip of an iceberg, have the patience to let research develop and tell the whole story.
So, what are the things you need for market research? To start, you need to develop specific questions that are beneficial for your business. Good questions form the foundation for great research. Be concise and specific while developing your research methodology, this will prevent you from going off track and developing useless data. After that, all you need is a solid team of researchers to find participants that are relevant to your business. There’s also a variety of software that will assist in processing the data from your market research, it’s often worth the investment to save you time in the long-run.
But at the end of the day, all you really need for market research is people. Never forget, human capital is the cornerstone of all research.