The Market Research Blog » Sampling

Lord Sugar Highlights How Simple It Can Be To Conduct Market Research

Administrator — Tue, 02 Aug 2011 12:43:52 +0000

A few days ago, fresh from choosing his latest Apprentice (in the UK BBC show), Lord Sugar conducted some rather cutting-edge social media market research. The task that Lord Sugar was looking to complete was not the most business critical decision by any stretch of the imagination – however, it was still an important decision, and one that most publishers and designers will surely agree, can take much deliberation and an abundance of time. The task – to decide upon the cover for Lord Sugar’s latest book.

In The Apprentice, Lord Sugar is often talking of the importance of market research, and a few days ago he highlighted to all his twitter followers the apparent ease with which it can be undertaken. Lord Sugar posted a short message via his twitter account (http://twitter.com/Lord_Sugar) asking his followers to cast their eyes over three variations of a new cover for his up-coming book, and to then respond with their preference (cover 1, 2 or 3 – (view the images here)).

Sure enough, Lord Sugar’s followers duly obliged, and 24 hours later a twitter post appeared proclaiming cover number two to be the chosen winner.

So what had Lord Sugar achieved? Well, in the space of a day he had come up with a research problem, put the question to his market, and received the feedback he was looking for. And ofcourse, this was an act of measurement – the covers were already designed, so there was no need for qualitativefeedback as to what people liked about the covers, or how they could be improved. Lord Sugar got to the core of his problem rapidly, and got the measurement he needed.

Although this medium of social media research is fairly new (though certainly gathering pace rapidly), the principal of ‘dipstick’ research has been around for many years in various forms, through tools such as omnibus surveys and panels. With an omnibus survey, a specific question (or number of questions) can be submitted to a target market or a particular sample pool, on a syndicated survey that may run weekly/bi-weekly/monthly. Results are usually turned around in a number of days. Surveys of this nature are indeed very useful in terms of gauging a quick response from the market and gathering attitudes towards a particular topic; however, they are unable to answer more in-depth research objectives, where a wide range of questioning is required.

Research using social media channels is certainly more prevalent in consumer research than in business research – though its usage in a b2b capacity is certainly growing. Indeed, b2b research inherently leans more towards multi-modal methodologies, as many projects seek to address a number of sub-objectives. Projects may combine exploratory focus groups with a programme of desk research, followed by a quantitative telephone survey, in order to meet a project objective. And of course, all research tools have their strengths and weaknesses, their applications where they yield the best results, and Lord Sugar highlights the strengths of social media research here.

There is, of course, much more to social media research – attitudes to brands can be tracked through syndication tools, key trends and problems can also be identified and addressed – and much more. Indeed, it too is a methodological approach that could complement an array of other methodologies being used in a multi-method piece of research. The uses and possibilities are quite vast – those mentioned in these few paragraphs are very much the tip of the iceberg.

Lord Sugar’s dipstick twitter research certainly delivered quick results, and certainly met his research objective of gathering market opinion on which book cover is preferred. So, perhaps this could be a methodology that would be best used for answering questions whereby a response is either time critical, or where a rough quantitative gauge is required.

The pool of followers that each twitter user has (whether a person or company) could be considered to be its own miniature panel – or twitterpanel, if you will. Though this pool of followers may not be representative of a company’s customer base, or a person’s typical readership (as in Lord Sugar’s case), they certainly have a vested interest in the said account, otherwise they wouldn’t be following it. This is a panel that is instantly accessible, and as Lord Sugar shows, can answer a simple research problem in an extremely short space of time.

Though it is unlikely that this type of dipstick research through twitter can ever replace typical surveys (not least because twitter followers will no doubt be averse to being over-researched, let alone its limitations) it can certainly provide an excellent gauge on a market’s attitudes.

Ever the entrepreneur, Lord Sugar has taken a problem and found a simple, effective, and free solution.

Does Research Tell You Anything New?

Administrator — Mon, 12 Apr 2010 08:15:07 +0000

We like Luke Johnson’s column in the Financial Times and regularly feature it on our blog. He is something of a hero of ours, having built up Pizza Express, become exceedingly rich as a private equity investor, and proved to be an astute commentator on entrepreneurial issues. It was with a sinking heart that we read the article he wrote about focus groups in the Financial Times last week.

Luke Johnson singled out focus groups for criticism but in truth his points could be applied to any type of market research. He claims that market research he commissioned told him very little that he did not already know. This will not be an unknown observation to many market research practitioners reading this blog. They will have often times presented a detailed and thorough piece of research with many incisive findings and sharp recommendations, only to hear some member of the audience claim that there was nothing new in it for them.

One way round this would be to ask everyone who attends a market research presentation to bring with them a sealed envelope in which they summarise their pre-understanding of the market so that it can be compared with the findings of the research survey. When market research findings are laid out in a clear structure it is quite likely (and quite right) that much of what is said will concur with existing knowledge. However, without the market research, the knowledge may be uncoordinated and there could be many internal disputes about where the marketing priorities lie. A good piece of research that confirms knowledge and places it in a framework that everyone understands, can be worth its weight in gold.

However, there is another issue that is worth considering. There is an old saying that “a problem defined is a problem half solved”. In other words, a good brief, which clearly lays out the problem to be researched, is critical in delivering findings that resonate. In the case outlined by Luke Johnson, an obvious question we would ask is “what were the focus groups seeking to achieve?”. Focus groups work best as an exploratory tool, possibly forming the first stage of a larger program. Were the focus groups used as a single research solution to something that should have had a qualitative stage followed by a quantitative stage? We don’t know, but we do know that there is a dangerous tendency to commission focus groups as a stand-alone research solution when they should be just one component part.

We shall carry on reading and promoting Luke Johnson’s articles because he challenges all and everything around him and we like that. However, on this occasion Luke, we think you may have been a tad hard on the market researchers and maybe you should also challenge yourself — did the research really tell you nothing worth knowing, and did you really give the researchers the right brief?

Read on.

Why focus groups tell you the obvious

By Luke Johnson
Financial Times – 24th March 2010

I recently commissioned some market research and, as is too often the case, it told me what I already knew or was obvious. I paid the bill of several tens of thousands of pounds, consoling myself with the fact that the work at least confirmed my prejudices – always a satisfying sensation. But I also sensed I had received very poor value; and in talking to other clients of research companies, I realise quite a few feel the same way.

As Michael Skapinker wrote yesterday, the idea that the customer is always right has become an accepted truth in business. Unfortunately, customer desires are often wholly unrealistic – because of cost, technology or legislation. As Henry Ford said at the launch of the Model T: “If I’d asked the customer, he’d have asked for a faster horse.”

I remember Peter Boizot, founder of PizzaExpress and my predecessor as chairman, telling me how, in 1965, customers in his Soho pizzeria felt uncomfortable with authentic Italian pizza – and demanded chips. But he stuck to his vision and guided their tastes to the genuine product.

I have also experienced data blindness over research studies. Consultancies supply blizzards of material – far more than could ever be useful. Wordy, sprawling PowerPoint presentations compensate for a lack of incisive thinking. One can end up paralysed with indecision, buried in e-mails too large to even download.

Great breakthroughs in fields such as new product development are frequently achieved by avoiding surveys and committees altogether. Constant testing can lead to blandness and safety-first choices. In creative affairs, corporate brainstorming sessions usually end up with groupthink dullness, all originality squeezed out because of the fear of failure or through the influence of office politics. As Steve Jobs said: “It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.”

At Channel 4, many of the most brilliant and distinctive programme ideas during my time as chairman were pioneered by eccentric independent producers who were championed by renegade commissioners. Meanwhile expensive, mainstream concepts often flopped.

Over the decades since I worked in advertising, I have sat in many focus groups and wondered about the quality and effectiveness of such qualitative research. After all, who submits to a two-hour discussion about brands of washing-up liquid? All too often, the answer is the lonely, the old, the unemployed, students and, most worrying of all, serial participants in search of the small stipend and free tea and biscuits. It is very hard to persuade a normal working person to attend such panels, but they are usually the target subjects.

I worry that researchers who appear to succeed are too often the snazzy firms who trade in sexy stereotyping. They use phrases like “Inner City Adversity” and “Twilight Subsistence” to categorise and supposedly understand various imagined socioeconomic and demographic groups. I am unconvinced that this terminology and philosophy is especially practical and relevant for many companies. In my restaurants, the people who know our customers are not researchers but branch managers, who serve the public all day, every week. Our staff may not have the slick patter, but they have the frontline, first-hand knowledge.

Another unfortunate byproduct of the growth of research has been the increasing use of surveys by political and charitable organisations in their campaigns. Almost every day a pressure group gets publicity by publishing selective and scary conclusions about poverty, health, discrimination or other controversial issues. Journalists rarely question the study methods or validity of the results. Even if there were no errors in the sampling techniques, questionnaires or systems used, the media often over-simplify and exaggerate outcomes.

Over-reliance on researchers means owners and managers are separated from the consumer. Successful entrepreneurs I know put more effort in talking to customers themselves, than they do working with costly experts who tell them what they should have learned long before.

Why DIY isn’t always value for money

Administrator — Fri, 07 Dec 2007 17:16:52 +0000

Continuing what’s become something of a small business-themed week, today we look at how conducting DIY market research can be fraught with difficulty for the unacquainted and why it’s something that’s sometimes best left to the professionals.

In her article, Do-It-Yourself Market Research which recently appeared in Business Week, Karen E. Klein runs through some of the ways a start-up business can get to grips with their industry. Her suggestions include:

Exhibiting at relevant conferences and disseminating surveys to attendees;
Stationing one’s self on the pavement outside the such conferences, handing out surveys; or
Hiring street teams to target particular areas;

Klein points out, however, that such techniques may end up looking like selling exercises and could even be misconstrued as harassment. Added to this, any business carrying out their own ad-hoc research would also have to be wary of the legal implications of doing so, as well as the issues involved in appropriate questionnaire design and sampling.

Given all this, and the fact that hiring staff or attending conferences could themselves be expensive ventures, the conclusion appears to be that there’s often no substitute for expertise where market research is concerned. As the article explains:

If you have the funds, an easier and more effective way to gather business data is to work with an established research company… caution [is advised] when conducting do-it-yourself studies. If a study is not well designed and executed, it can lead to poor business decisions, which are far more costly in the end.

Sound advice indeed – Especially because there are few worse things a business can do than not understand their market or their customers properly, as demonstrated by the picture below…

The Questionnaire In Postal Research – Part 3 of 3

Administrator — Tue, 20 Feb 2007 09:16:28 +0000

ARRANGING THE QUESTIONNAIRE LAYOUT. Questions need to be neatly formatted so that the questionnaire looks attractive and easy to complete.

Questions covering a specific subject, such as trends, suppliers or purchasers, should be grouped. Respondents should be taken gradually from simple to difficult (or delicate) questions in a logical order. Thus the first questions on the form are likely to ask easy to complete questions about purchasing behaviour. A simple routine question could then lead him into the body of the questionnaire.

By structuring the questionnaire from simple to the more difficult, the researcher is easing the respondent into his work. Once started, she will find a motivation to continue and finish. The embarrassing or controversial questions, left until the end, now stand a chance of completion.

Market research questionnaires are viewed by most as just another form and since there is no compulsion to respond there is a danger that they will end up in the waste paper basket unless the respondent has an incentive to reply. If the questionnaire is visually attractive it will help. It costs no more for the questionnaire to be printed on coloured paper. Not only does this look appealing, it helps stand out in the sea of white paper on most respondents’ desks. Cartoons can give visual relief and again add interest.

Every attempt should be made to lay the questionnaire out on one piece of paper. It looks better and avoids stapled pages. Ideally the questionnaire should be restricted to two sides of A4, i.e. A3 folded so that there are four pages in booklet form.

PILOT TESTING THE DRAFT QUESTIONNAIRE, The perfect questionnaire has yet to be written. When a draft has been prepared which appears acceptable to the researcher, it should be tried on at least two or three colleagues. Next the questionnaire should be tested in the field. Theoretically the test should be a small scale postal survey. However, the draft questionnaire is usually tested face to face amongst half a dozen target respondents who have the opportunity of saying what was in their minds as they completed each question.

Although the design of the questionnaire is the key element of a postal survey, the first thing seen by respondents is the covering letter. The aim of the cover letter is to persuade the recipient to give up time, exercise the mind and part with valuable information without any immediate or obvious reward.

The cover letter should attempt to bond the sender and respondent and so is likely to include liberal doses of the words you and we or I. The style of writing must be engaging so that the interest of the reader is held and yet it should also convey confidence that a reply will be put to good use.

The first paragraph, should explain the objectives of the research. No matter how vague, respondents need a hook or incentive for replying. This could be the promise of an improved service, increased efficiency, a more comprehensive range of products, etc. It should be explained that a reply is critical to the success of the survey and an assurance provided that the completion and response can be carried out quickly and easily. Finally, an offer of confidentiality should allay fears that there will be any future embarrassment or sales pressure.

Ninety per cent of the replies from the mail shot will be returned within two weeks of its dispatch. To increase the response a reminder could be mailed 14 days after the first shot.

For more market research articles like this visit our company website at www.b2binternational.com