By Dennis D. McDonald

It’s interesting to see how the mechanics of market research have been impacted by the web based and online tools now available for gathering and reporting information about personal preferences and behavior:

• Online and emailed polls and questionnaire surveys are commonplace.
• An industry has emerged around the measurement and tracking of online behavior that supports the sale and pricing of web based advertising.
• Intrusive “pop up” surveys and polls are a common online annoyance that need to be “batted aside” in order to see a desired web page.
• With or without our knowledge, companies are amassing and aggregating data on online behavior that, when linked to demographic, geographic, or other personal or behavioral information, provide a market research goldmine that would have been unthinkably expensive to develop a few decades ago.

I’m currently helping a client conduct market research into how professional association members assess potential web based e-learning and social networking initiatives. The research is employing a combination of web-based online demonstrations and web-delivered survey questions. The initial target is a small group that is serving as input to an association-wide survey to be conducted later this year.

I’m continually impressed with how easy it is to engage current and potential users of a product or service in a variety of structured and unstructured ways. In addition to formal tools such as online questionnaire surveys, focus groups, and other two-way communications, it’s now possible to “engage” over time with customers, members, and users via a variety of collaborative web based options. These range from informal groups based on generally available social networks, to highly structured panels of respondents where statistically valid and projectable data can be generated.

One impact of the shortened time to market for new products is that delays introduced by protracted research and product development may no longer be tolerated. In some industries, formal research might even be avoided by taking to market a “beta” version of a product or service whose performance can be monitored for immediate feedback. After all, why “study” something if you can get it into the marketplace and gain real feedback from real customers? Clearly, isn’t such an approach better than a highly artificial experience such as a focus group interview or a structured interview with carefully worded questions?

Yes and no. I’m aware of the time and cost pressures that have placed a premium on conducting statistically valid surveys as input into product design and pricing decisions. Besides, when it comes to getting accurate readings of a population’s preferences or willingness to pay for a prospective product or service, there’s no substitute for getting that product or service into consumers’ hands as quickly as possible in order to generate honest feedback. I’ve done enough software product demonstrations to know how difficult it is to garner accurate feedback without showing the customer what he or she will really be getting.

Still, there are certain things about market research that should be preserved, regardless of how tools are evolving.

First, objectivity. This can be tough when the data being gathered is based on a product or service that has been rapidly pushed into the field without much testing in anticipation of getting first-hand real-world feedback. In this type of situation, for whom is the market researcher working? Is the market researcher trying to find out the objective “truth” of what the market needs, or is the market researcher part of the product development or sales team? Will this impact how the market researcher is perceived and performs?

Second, projectability.  At some point someone is going to ask the question, “Based on our research, how big is the market for this product or service? What is the revenue potential?” It’s one thing to follow a viral selling approach as it spreads through a community. It’s another to make an estimate of market size if the market is new and accurate population size estimates aren’t already available. And if population size estimates (number of people, number of transactions, etc.) aren’t available, whose budget will support coming up with (e.g., buying or generating) such numbers?

Third, transparency. Here I’m thinking about whether or not it is possible to expect a “community” that is created around a product or service to be completely impartial when problems arise. We all want our customers, members, or users to be enthusiastic about our products or services. So we may tend to do and say things that are intended to generate enthusiasm. At the same time, if a problem arises, we also want to know about it. If we have created a web based community around a product, and if we rely on members of this community to be “first responders” in providing support to other users, will they be willing to be open and sharing about their problems with the official corporate representatives whom they see as having been so positive in the past?

These are just a few of the items that come to mind when considering the role of market research at various stages of a product or service lifecycle. Objectivity, honesty, and technical validity should always be encouraged in such situations, and different organizations will differ concerning how to accomplish this.

I don’t think that it is unreasonable to maintain boundaries among different corporate groups in terms of how they relate to customers. Just as we want customers, users, and members to be honest and straightforward concerning how they use products and services, they also should know something about the different responsibilities of the organization’s representatives that they are dealing with.

Even though the tools and techniques of gathering and analyzing data about preference and behaviors have become much faster, more accessible, and easy to use, it still makes sense to (a) maintain organizational independence of a market research function, and to (b) communicate that independence to the community of customers, members, and users.

Copyright (c) 2008 by Dennis D. McDonald