Market research is as accurate as a coin flip (at best!)
Market research is important in order to know what people want, desire or believe needing.
Market research can be done in many ways like: questionnaires, surveys with multiple choice answers.
The famous 80/20 rule fails for Market Research:
- Your survey or poll covers 80% of your market:
Covering all segments of your market is almost impossible?
Thus addressing 80% of your market is already an achievement.
People who define the questions and multiple choice answers can be biased.
- Your customers express 80% of their thinking in the survey:
Your questions are wrongly interpreted thus wrong answer.
Your multiple choice answers aren’t matching completely with the idea of the customer.
- Your conclusions are converted into actions for 80%.
Your Product Manager needs to interpret the received answers and data: error is possible.
Your Product Manager can be biased towards a certain solution.
A coin flip has an accuracy of 50%
The total conclusion is only:
80% times 80% times 80% = 51% correct of what your market wants!
This means your new product will only cover 51% of the market needs.
Your new product will only respond to 51% of the market requirements.
The result makes you wonder why you have done the survey or poll in the first place.
Any lucky draw has a 50% chance too.
If you want to do better than a coin flip, you need to obtain higher values.
That seems impossible, even how much care you take as we deal with:
- People defining the questions
- People answering the questions
- People interpreting the answers and making the conclusions
Still the percentages used in the example are already on the high side.
Suppose:
75% times 75% times 75% = 42%
70% times 70% times 70% = 34%
Gambling has an even better outcome.
People with market experience and knowledge will score better – without doubt.
How good was your last product defined by market research?
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Market research is always essential for the succes of any kind of business.~.,
all businesses need market research to make sure that a product will succeed.’;*