5 Minute Read

Organizations that embrace market research reap many benefits: an in-depth understanding of their customers, advanced analytics for enhanced results interpretation, and the ability to uncover new market trends as they develop to name a few.

Today, market research goes hand-in-hand with market and competitive intelligence (M/CI). To maximize your understanding of the environments in which you operate, it’s important that your organization practices both of these  disciplines. 

There are a wide variety of market research methods including those that are both quantitative and qualitative in nature so it’s important for your  organization to understand the approach(es) best suited to gather the data you require. Because the quality of any market research is directly correlated with the accuracy of the data that the research is based on, the methodologies used to gather that data have to be carefully considered. 

The quality of any market research is directly correlated with the accuracy of the data that the research is based on.

As with any strategic planning process, garbage in always equals garbage out. It’s vital that organizations know how to source, process, and analyze  market research data in order to build strategies that deliver valuable results. 

-- Article Continues Below --

Market Research

Learn how you can start building a significant competitive advantage with market research. 

Collecting Accurate Primary Market Research Data

Primary market research occurs when an organization gathers new data directly from research participants. This process generally incorporates both qualitative and quantitative techniques and once analyzed the data may uncover actionable insights that were previously unknown or it may confirm existing hypotheses.

The traditional approach to primary market research typically starts with an exploratory phase that employs qualitative research techniques, including focus groups and interviews. From this, researchers generate hypotheses to test on a larger group using a quantitative market research method like surveys or prediction markets. 

While primary research techniques are invaluable when it comes to discovering insights, it’s important that these techniques follow rigorous research standards to ensure high quality data is produced. There are several steps a researcher can take to achieve greater data accuracy:

Partner with Reliable Research Organizations

If an organization is conducting research for the first time, it can often be assumed that market research is as easy as sending out a survey to a few hundred email addresses. But in reality, it’s far from that simple and typically, it’s best to partner with an established market research firm to ensure proper execution and data interpretation. . 

While it can be fine to experience in market research using a variety of available self-service research tools to get answers to highly tactical questions, you should never undertake a large, strategic project without the advice of an expert. An analogy: while you might refill the engine oil in your car, you’d never replace the engine yourself. You’d hire a trusted mechanic. Market research is similar: having an expert drive the process helps avoid costly mistakes and ensures a positive outcome.

Having a market research expert drive the process helps avoid costly mistakes and ensures a positive outcome.

Use an Appropriate Sample Size

It’s critical that researchers use a sufficiently large sample size. Too small, and the data generated won’t be representative of your wider customer base. On the other hand, an appropriately sized sample can provide statistical significance; an important distinction in determining whether meaningful differences exist.

Researchers should choose not only an appropriately sized sample, but also a representative one. Research participants often match your target audience and share similar demographic characteristics, interests, and experiences but this is not always the case when the objective of the research is to get into an untapped market.

Maintain Impartiality

Research participants can be easily misled by the organization conducting the research. It’s imperative that research is conducted impartially, and avoids asking respondents leading questions that unduly influence their answers.

The aim of market research is to uncover the truth, and that’s just not possible if the research organizer is encouraging respondents to answer questions a certain way. This is part of the rationale to partner with an experienced and independent research organization.

Researchers should avoid using any branding or other information that makes it obvious who is sponsoring the research. Ideally, research participants should never know the organization that funded the research. That way, organizations can be sure they’re receiving impartial responses that act as a reliable source of data. 

Collecting Accurate Secondary Market Research Data

Secondary market research consults existing sources of information to build a more complete understanding of an organization’s customers, market, and external environment. Information can be drawn from a huge variety of sources, and adds rich context to information collected using primary research techniques. 

To drive accuracy in secondary data, ensure that only trusted, high-quality data sources are included. By ensuring the provenance of the data sources incorporated into the research, organizations can make decisions with a higher level of confidence. 

To drive accuracy in secondary data, ensure that only trusted high-quality data sources are included.

In working with secondary data, it’s also important to have a framework that is capable of processing and analyzing high volumes of data. Many organizations are embracing sophisticated M/CI platforms like Knowledge360Ⓡ to assist them with this process.

With built-in integrations to dozens of high-quality data sources, AI-based analysis tools, and the ability to collaborate across the organization, platforms like Knowledge360 provide a highly efficient way to organize and curate data resulting in more actionable insights that provide a competitive advantage.

Factors Affecting the Accuracy of Traditional Market Research Techniques

The practice of market research has been around for a hundred years now, and undeniably enables organizations to better understand their customers and markets. However, these traditional methodologies aren’t without their drawbacks. Here are a couple of the most prevalent impediments to the accuracy of market research data:

Response Bias

Traditional market research techniques are centered around asking participants to provide personal opinions. Often, participants ascribe an aspirational lens to this, which clouds the accuracy of the data they provide in their response. This is known as response bias. Behavioral science has proven that people are simply better at predicting the behaviors of others than their own..

Reliance on Historical Data

Many research techniques rely exclusively on modeling historical data to project how future trends and consumer behaviors might evolve. These projects can be characterized as looking in a rear view mirror, when organizations really wish they had a crystal ball.

These projects can be characterized as looking in a rear view mirror, when organizations really wish they had a crystal ball.

Even when fresh data is collected, it quickly becomes stagnant and outdated due to the rapid pace of change in today’s market. Research projects often take months to conduct. By the time the findings wind up in the hands of decision makers, the data can easily be out of date. 

A New Approach: Prediction Markets

Perhaps the most exciting development in the market research world in recent years has been the emergence of prediction market research

Prediction markets challenge research participants to predict the future behavior of others, and require participants to explain the reasons for their predictions. All told, prediction markets eliminate many of the drawbacks of traditional methods and ensure a higher degree of accuracy in market research data. 

Prediction markets eliminate many of the drawbacks of traditional methods and ensure a higher degree of accuracy in market research data.

Prediction market research is proven to deliver a higher degree of accuracy and uses an algorithm to predict outcomes. By asking respondents to predict the behavior of others, response bias is greatly reduced, driving significantly higher levels of accuracy.

An added bonus? When working with an established prediction market research organization, like Cipher, prediction market research can be conducted three to five times faster than conventional market research. 

Final Thoughts on Driving Accuracy in Market Research Data

Market research is a valuable tool for organizations seeking to build a more comprehensive understanding of their customer and market. But at the end of the day, the output of the research is only as good as the input data. Primary research is particularly important in enabling researchers to uncover previously unknown insights that can drive strategic shifts, but it’s important to be aware of its limitations and adapt strategies accordingly.

To reduce the impact of the negative aspects of primary market research, consider incorporating prediction market research. In doing so, organizations can paint a more accurate picture of the future and unlock insights in less time. 

To learn more about predictive market research, schedule a call with one of our experts.