How many times have you heard, “according to [consumer insights firm name], millennials live in an experience culture” or some other fact about a huge demographic of the world with broad blanket statements? Having worked in the ad agency world for years I saw a lot of this type of research presented to clients to educate their marketing campaigns and business strategy. I always found this level of research alarming. Sure, research from McKinsey or Iconoculture makes for a pretty PowerPoint deck, but once you take a second to think about how shallow the research you are using to spend millions of dollars on media on it starts to bring up some major concerns.
Sample Sizes May Vary
Even the most in-depth qualitative research is going to have a limit of the number of respondents it can survey, this is simply because finding respondents to take a survey cost money, and analyzing large survey datasets takes researchers time and therefore money. For example, many popular millennial research studies have sample sizes in the thousands like Qualtrics’ The Millennial Report which had 6,000+ respondents or Eventbrite’s MILLENNIALS Fueling the Experience Economy which had just 507 millennial responses. These sound like pretty large groups of people, but if you think about the population they are trying to represent there are projected to be 73 million millennials in the US according to Pew Research Center in 2019. Now if you are trying to figure out if your new marketing campaign is targeting the right interests because you saw that 60% millennials prefer to rent vs own keep in mind that just a few responses could sway that number. And what if you have a more niche product, the insights of the masses is going to help you make good decisions.
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Those Aren’t Your Customers
What’s more important to you, what 507 random people think, or what 507 of your customers think? Who do you think is more like your next customer? With the exception of new businesses, most companies have all the survey respondents they need in their customer pool. While measuring your customer feedback can not only help target your marketing to the features and services your best customers care about, it can also improve your product and operations. By collecting customer feedback you can find the pain points in your onboarding process or customer service model that helps keep your customers happy and their wallets open. Focusing on targeting the right customers, who will appreciate your product is not just a great way to increase conversion rates, but also a way to reduce churn.
So How Do You Make Educated Decisions?
I’m not trying to tell you that you should ignore all market research from consumer insights groups. What I’m really trying to convince you is that your customers will have much better insight that a group of a few thousand respondents that are aren’t in the market for your product. Be careful basing your business on macro trends that aren’t specific to your company or your customers. Look closely at the studies used in the research you are using to influence decisions and look for sample size and representation of OUR target customer.
