An Overview of Using Surveys for Market Research
Using Surveys for Market Research
Most of us, at one point in our life, have been asked to complete a survey. I know I have certainly been asked to complete surveys - most recently by a PhD student I encountered at the local Starbucks! Having personally never relied upon large scale surveys to guide new product design, I wanted to explore the role surveys could play in launching new ventures. Here’s what I have found.
From a pedagogical level, a survey is a short or long questionnaire designed to solicit feedback on a product or service. They are typically used to assess customer satisfaction, conduct customer segmentation studies, evaluate product usage, and, among other things, understand the perceptions consumers have of a business brand. The data gained through survey information are also descriptive; they are expressed in percentages terms and frequency counts, and sometimes cross-tabulated for the purpose of comparison. And while the aforementioned definition and uses of surveys are simplistic and intuitive, their execution is not. Just like business forecasting, it is part art and part science. And just like business forecasting, garbage in yields garbage out.
The Market Research Survey Process
1. Identify Target Consumers
If you are going to survey a group of people, you better know who they are, and you better be as specific as possible. I know it sounds obvious, but surveying a group of individuals outside your target segment will only result in valueless information. Standard methods of audience identification include geographic segmentation, demographic (age, gender, education, religion, etc) segmentation, psychographic segmentation (personality type, social class), and behavioral segmentation. Social networking sites such as LinkedIn and potentially Facebook have made it possible to conduct highly segmented market research on an unprecedented scale.
2. Design the Survey Instrument
The next step is twofold. You have to design the set of questions sent to the target audience, and you have to determine the format in which to present the survey. The most common forms of survey questions presentation are via a web-based survey tool, via email, via telephone, and finally in person by manually handing out and collecting the survey itself. Determining the right questions is critical to the overall success of the endeavor. Given its complexity, I have saved the mechanics for a later post.
3. Determine the Survey Sample Size
Determining the samples size is another critical step in conducting survey based market research. MarkingMo.com says there are four criteria to consider when determining sample size.
1. Population: The reach or total number of people to whom you want to apply the data.
2. Probability or percentage: The percentage of people you expect to respond to your survey or campaign.
3. Confidence: How confident you need to be that your data is accurate. Expressed as a percentage, the typical value is 95% or 0.95.
4. Margin of Error or Confidence Interval: The amount of sway or potential error you will accept. It’s the “+/-” value you see in media polls. The smaller the percentage, the larger your sample size will need to be.
For example, if 45% of your survey respondents choose a particular answer and you have a 5% (+/- 5) margin of error, then you can assume that 40%-50% of the entire population will choose the same answer.
To get a good sense of sample sizing, I would recommend looking at SurveySystem’s free calculator.
4. Pretest the Survey Questions
One of the main drawback of survey based market research vis-a-vis other methods is its cost. Conducting a survey is just down right expensive. Given the costs, testing the questions, obtaining feedback, and refining the question set will improve the results of the research. McQuarrie writes, “If the questions on the survey are confusing, if the list of answer categories is incomplete, of if the language is wrong, then it doesn’t matter that you have a large, representative sample - your results are still all to likley to approximate garbage.” So don’t forget to test the survey questions against a small subset of survey participants before launching a full blown and costly research effort.
5. Administer the Survey & Analyze the Results!
If you have managed to execute flawlessly upon the previous four steps, then you can safely administer the survey and analyze the results. In addition to a summary of the data, a comprehensive report will include confidence intervals to ascertain true statistical difference between the responses.
Do-It-Yourself or Outsource?
Running a market research survey is a complex, expensive task. If you have limited experience with the endeavor, and if you are planning to use the research to support or reject major business decisions, the rule of thumb is to outsource. The risk of “garbage out” might be too high. If the survey instrument is simply used to ask a few short, basic questions to get have a few pressing concerns clarified, but by all means do it yourself! Time, expediency, and accuracy of results will drive the decision to do it in house or hire a firm that specializes in market research surveys.
References
1. The Market Research Toobox: A Concise Guide for Beginners
2. Basics of Market Research by dobney.com
3. Principles of Marketing
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