Why do market research on line.

It is absolutely essential when doing market research to get good data.  Really any kind of research requires good data.  We need a good sized sample that is representative of the population, because faulty data leads to faulty decisions.  Right now the best place to get that data is online. 

Online market research is the best medium with which to reach respondents.  Nearly everyone uses the internet.  My Grandmother even bought a cheap computer so that she can use email and visit her church’s website.   People are even starting to spend more time on line than they are watching television. Now that’s a big deal.  In fact you can probably reach a larger selection of people online than you can any other way, except for maybe door to door.  Not just can you reach all these people but it is a lot cheaper than doing phone calls or going door to door.  There is also the benefit of not annoying the crap out of individuals with that phone call that always seems to come right during family dinner, or their favourite TV show for that matter.  With an online survey you can invite someone to respond to your survey without actually interrupting what they are doing at that moment.  Not to mention that it is easy for the respondent to stop in the middle of the survey (even closing the survey) taking care of something else they needed to do and then clicking on the link again and finishing the survey. 

 Granted there is some worry about data integrity.  Every one worries about some freak taking the survey over and over again messing up the results.  But some market research survey software, such as Qualtrics, gives you the ability to turn on ballot box stuffing, or even better to individualize each survey link for each respondent, ensuring good quality data.  There are a large quantity of online survey software providers that can be used to perform online market research.  Admittedly some of them don’t look very attractive for the survey builder or for the respondent.  But some (Qualtrics once again comes to mind) are pretty intuitive and even offer personalized survey skins for clients. 

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Online Market Research not only Economical, but Ecological

A recent special entitled "The Human Footprint" premiered last Sunday on the National Geographic Channel, it's purpose to show how much American consume. It turns out that "Americans generated 251 million tons of trash in 2006"(National Geographic, April 2007). With these figures, as well as a new revival of ecological thought companies around the globe are trying to put on a new environment-friendly front. One particular way that several companies are trying to save excess paper/expenditures is by conducting online surveys for their market research.

The common assumption that only tree-hugging tech companies are switching to online survey formats couldn't be farther from the truth. From ladder companies to large Las Vegas casinos, most companies are phasing out paper and pencil questionnaires. Although ecological reasons are a large reason for this shift, the fact of the matter is online surveys are often cheaper. For example, recently a concert sponsor decided to use online surveys instead of pencil and paper questionnaires at one of their venues. Not only did they save on the printing and distribution costs, but they were also able to reduce the number of employees needed to process the questionnaires. (Most online surveys will provide you with statisical tools already built into the program.) Another example would be a city which sent online surveys to their citizens through email in order to ask them about a new development. Less employees and less printing equals less tax payer dollars.

Many of the companies who provide this software often provide free trials as well, like Qualtrics. So this new format for market research could even be free. Online surveys are clearly the ecological and economic choice of the future.

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Sample Size…what's the deal?

The paradigm

You have deadlines. It's part of your life as the resident concept-test guru. You have a panel of 1000 consumers from your client base and you estimate a response rate of 50% when using your online survey software tool. That gives you somewhere around 500 respondents… Is this enough to make a sound product-launch decision? You call up your statistician friend and ask "How do I compute a sample size?" and he or she will invariably respond "it depends" with a gleeful look in the eye. Statisticians (I admit, I am one of them) love that "I know something that you don't" feeling.

After describing your problem to your friend, he or she returns to the statistician cave. A few minutes later, he or she returns with some astronomical figure, saying "At most, you will need (your current sample size * some large positive number)". You gawk in befuddled amazement and hang up the phone with lingering disgust in your voice.

Welcome to the never-ending battle between the financially feasible and the statistically significant.

The Problem

First, a few definitions:

• Sampling Error: the degree to which your responses don't carry the true opinions of the population of interest.
• Population: the group you're trying to learn about. In the concept-test case, this is the consumer group that you are trying to sell to. Remember that this is not the group that takes your survey, but the group upon which you would like to draw inferences.

Your statistician friend says "at most" because he or she knows no more about the sampling error you'll pick up in your respondent panel than you do. However he or she does know that by making a few reasonable assumptions, a sample-size can easily be computed.

The Basic Solution

First, one has to realize that sample sizes are computed on several values chosen before the concept test is ever sent out. These include your confidence level, the margin of error you want to allow for, and a variance (or standard deviation). For a very large population size (like any group of U.S. consumers larger than, say a few thousand people) we will assume that the standard deviation is equal to p(1-p). 'p' is a proportion, so p(1-p) will max out when p=0.5. (If you want to see any further discussion of this concept, take a look in a basic statistics book.) We can look at several values for the margin of error and the population size. Note that these computations also rely on the assumption of normally distributed responses.

So, because WordPress lacks the capacity to handle equations, here is the breakdown in pseudo-math.

n0 = ((Z-score)*(standard deviation)^2) /((margin of error)^2)

n = n0/(1+no/N) when n0 > .05*N

N: population size (estimate if you don't know)

n: sample size corrected for finite population size

n0: uncorrected sample size

The Advanced Solution

For more information about sample size consult a good sampling text. Try Sampling: Design and Analysis by Sharon L. Lohr (1999). (Coincidentally, I used the same book to make sure my equations were accurate…count this as due acknowledgment.)

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Training Feedback Using Market Research Tools

Starting a new job can be exciting, creating enthusiasm in the new hire and the employers. However, there is one pitfall that all parties in this situation hope/want to avoid …lack of training. Almost every person who has worked in the United States has been hired on, given the reins, and had no clue what they were supposed to do. It's frustrating and although most companies do implement training programs many use ineffective, inapplicable, or outdated training techniques. What then can companies do to better their training programs?

I received an answer to this quandary, this past week when one of my colleagues used Qualtrics, a market research online survey tool, to examine how effective his companies training program was. This software is designed and used by many different corporation for market research, but it transitions easily into an dynamic aide for human resources.

Not only did my colleague give his trainees a survey at the end of their training session to see how his company could improve the training, but he also tested how effective his training was by rigging the survey software to distribute a quiz. He's also planning to send a survey to the new hires, one month after they have been with the company, eliciting further suggestions for bettering their training program. Simply put, a great idea.

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