In Defense of Market Research
Recently, I’ve been coming across an appalling number of discussions on whether market research is dead or obsolete.
The simple answer is: No. It is not dead. It is not obsolete. And it has not been made redundant by the growth of social media platforms.
On the contrary, never has there been so much market research; and never has the need for it been so great.
Just look at the market for “business intelligence,” market research by a sexier name. Even a cursory search of Business Wire, MarketWatch, or any of the sites compiling news releases, give an almost daily announcement of new studies on the size, niches, and trends in business, social media, mobile marketing, the consumer market place, and on and on.
Or take a look at the evolving concept of “big data,” datasets whose very size have required the development of new tools to analyze them.
Or the ever-increasing number of software companies offering the ability to collect, collate, and analyze social media interactions.
All this in addition to more traditional and company-specific research – testing messages, gauging customer satisfaction, gaining insight into new products before they are launched, competitive analyses, etc.
So, no, market research is not dead. But its very vibrancy and the explosion of sources of data, have created some new – or increasingly important – challenges to keep in mind:
1. If you can’t see the data, don’t trust the conclusions.
Quite often, business intelligence firms grab you with a hook of significant conclusions. The mobile market, for example, will be worth $X billion in 2012; or X% of the population will be on social media by 2013. They are selling you the conclusions they have drawn from the data.
But if they don’t show you where they got the data from, how their questions were framed, how they selected which respondents to use or which data to include or exclude, you have no way of knowing if their conclusions are valid. Should you really be comfortable investing the time and resources necessary to implement strategies based on those conclusions or that data?
This comes under the heading of full disclosure. Under the heading of due diligence, it is the job of marketing to look at the data, analyze it, and then decide whether or not to accept it, and decide what the conclusions really are. And this is as true for custom-designed studies as it is for industry-wide business intelligence reports.
2. How were the analytical tools designed?
As social media analytics becomes more prevalent, the question of how the software that creates the analytics was designed becomes more critical. Was the design guided by experienced marketing people? Or was it primarily guided by technical people, whose primary interest is in what can be done – as opposed to what should be done, what data is meaningful, and what is noise.
Gathering data is important. Gathering the right data is critical.
Once again, it is marketing’s job not merely to understand how the tools work. Marketing needs to understand how the tools were designed, why they work the way they do. Then, and only then, can you determine if you are getting information you can rely on and can use profitably. We need to remember that just because software has become more sophisticated doesn’t change the old adage: Garbage in, garbage out.
So the challenges for marketers multiply. We not only have to understand our market place, our products, our customers, and our prospects. And, of course, we have always had to understand how the data on which we base our decisions was derived in order to use it properly.
But with the vastly increasing amount of information available, it is becoming an ever more critical job for marketing to understand which of that information is valuable, which is not, and to turn that information into knowledge: A deeper understanding of our customers and market space; and the ability to translate that into actionable strategies, tactics, messages, and products.
Practical Marketing Rule # 6: In a data rich environment, it is knowledge, not just vast amounts of data, which turns into revenue and market share.