Attacking Market Research

Nigel HollisSeptember 6, 20132 min

Neuroscientists, designers and authors all seem agreed on one thing: market research is pretty much useless. They all agree that new insights are required but, unfortunately for their credibility, they all offer a different means to that end. But why has market research become such a popular whipping boy?

Let me tell you what started me thinking about this topic. I happened to hear a piece on Marketplace titled, “What makes you happy when your call is put on hold?” by David Weinberg, and something caught my attention. Toward the end of the segment, Emily Yellin, author of “Your Call is Not That Important to Us,” said that companies could do a better job of handling consumer calls but that it would cost too much. Companies go wrong, she suggested, by spending huge amounts of money on things like surveys and focus groups to find out what customers want. She continued:

Meanwhile, they have this department called customer service where customers are calling and trying to tell the company what they think of them and they are being put on hold, they are treated poorly and then customers walk away frustrated.

While I agree that this is a very useful, qualitative source of information when it comes to identifying problems, it is also potentially very biased to those with pet peeves or gripes about the company.

Moreover, I think Yellin has completely missed the point. Companies don’t go wrong because they spend too much money on research. They go wrong because they fail to act on the research they do buy, place more faith in gut instinct than consumer insight and focus on the wrong metrics to make decisions.

The Marketplace report gives a classic example of using the wrong metric to make decisions. Yellin herself is reported to have looked at how companies use cost per call to find the right balance between keeping costs low and not angering customers with long wait times. This is a completely futile analysis. Why? Because saving money is made the prime objective over (further) antagonizing a customer. Never mind pleasing the customer or exceeding their expectations so they buy more from us, no, let’s just not annoy them.  It is a metric that only an accountant could feel happy about.

Now that I think about it, maybe the use of the term “whipping boy” is even more appropriate than I thought it was when I started to write this post. Because a whipping boy is a person who gets punished for someone else’s wrong doing. So maybe market research has not done anything wrong at all, and it is the critics and the people they pander to that really have something to feel guilty about? What do you think? Please share your thoughts.

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Nigel Hollis

3 comments

  • Kathy McCurry

    October 3, 2013 at 7:03 am

    I totally agree that identifying the important metrics of ‘success’ should include a customer that is delighted and who might become a brand champion if treated well. And you’re right about companies actually acting on the insights that they learn from research… one of my clients offered a monthly service and had high customer churn. Through numerous research studies we heard customers and former customers complain about various aspects of the service, the inflexibility and inconvenience of it, etc. Finally, during a focus group, the moderator popped into the back room and said “This is great stuff we’re hearing. You have so many opportunities to improve your offering and increase customer loyalty!” The clients just said, “Let’s move on to the next topic – we’ve heard all this so many times before, it’s not new information.” And, of course, they weren’t going to do anything about the repeating complaints. So, the challenge becomes: How can you build a strong brand in the face of this situation? The company was sabotaging it’s own marketing investment by not listening and acting to make the entire customer experience positive. But, the marketing metrics were based on filling the new customer pipeline – not on retention. Revenues could have been so much stronger if they’d focused on keeping more of the customers they spent oodles on bringing in in the first place.

  • Glenn Myatt

    October 5, 2013 at 12:01 am

    Nigel, agree with your view that often the wrong metrics are used. Two points however.

    First, in my experience front line staff can sometimes provide richer insights than consumers, whether via focus groups or surveys. This is particularly true for veteran staff who know the business and brand well, and who have ‘heard it all’ – the good, the bad and the ugly. Compared to consumers for whom a brand is but a small part of their lives, experienced staff have lived and breathed a brand and how hundreds or thousands of consumers have reacted and interacted with it.

    Second, as covered in this post – http://brandtruth.com.au/2012/07/31/the-growing-limitations-of-traditional-brand-research/ – changes in the consumer and marketing landscape mean that sometimes the answer lies not with consumers but within businessess themselves.

  • Sam Glassoff

    October 6, 2013 at 5:09 pm

    Nigel, I couldn’t agree with your points more.
    As a Marketing student, I have a great appreciation for the value of market research. Using customer calls as a means of qualitative information can be useful in some instances, but is largely unreliable. Obviously, people call when they are dissatisfied and not when they are happy (in most scenarios). Using these calls to obtain a pulse of the marketplace will not be helpful in any way.

    Additionally, I feel that people run into trouble with market research when they don’t know what they are looking for. There is so much data and information available to us now, and the more focused the research is, the more valuable the insights will be. That being said, companies must actually act on the insights, which is not always the case. If “Company X” has used the same name for 30 years, and is told by the research that sales would increase by 70% if they call themselves “Company Y”, their first instinct might be to find a different insight. Market research is very valuable, and companies should use it to make sound and strategic decisions.

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