Market Research Needs Less Statistical Analysis
February 8, 2010 15 Comments
I’ve noticed a very important shift in market research. Leading-edge firms are relying less on traditional statistical analysis and more on what I’m calling “Contextual insight” which I’ve defined as
Observations drawn from data that resonates with an understanding of the business
To understand the difference between these paradigms, let’s look at an example: A company with a quality problem. Here are two scenarios:
- Scenario #1: Statistical analysis. The market research organization analyzes warrantee data but it takes several months to collect the information. Unfortunately, the problems aren’t coded very effectively so it takes even longer for there to be enough feedback to isolate a specific problem. Six months after the problem started occurring, the market research organization identified an issue that they felt was statistically significant. The product manager contacted the supplier and resolved the problem.
- Scenario #2: Contextual insight. A product manager had a nagging worry about the vendor who was supplying a piece of plastic used in one of his products. It passed all of the quality tests, but he was still concerned. He gets daily feeds of any quality issues with his products. After a few returns that he could interpret as being a problem with that plastic piece, he immediately contacted the supplier and resolved the problem.
Here’s the basic idea…
Businesses are full of scenarios where contextual insight is extremely important; call center managers who have concerns about agents to a Web designers who worry about parts of the site.
While the traditional market research efforts are not going away, the rise of contextual insight will push market research organizations to change how they operate. Instead of delivering periodic reports, new-age market research organizations will need to:
- Develop more ongoing collection mechanisms
- Process data in a more continuous fashion
- Provide tools for setting up personalized alerts
- Tailor reports and analysis to for different roles across the organization
- Trade-off deep analytical skills for business skills
The reality is that most people in an organization have very limited visibility into what’s happening in the marketplace. Providing them with relevant data (that isn’t necessarily statistically significant) will help them make better, faster decisions.
The bottom line: Organizations need to enable more contextual insight.