Recently, I read an article about mistakes that are commonly made in Marketing Research. Since so many business decisions are made from the results of research, I felt it was important to be aware of some of the most typical pitfalls and how we might be able to avoid them.
1. Halo Effect, or "the common tendency to make specific inferences on the basis of an overall impression." The idea is that if a firm is performing well, people tend to think of it as being customer focused, well-managed, and a whole host of other positive things; however, the reverse happens when the firm starts performing poorly.
· Suggestion: When testing concepts such as “customer focused”, the author suggests not actually asking this question but a series of more fact-like questions such as "Are customers involved in the product design process?" or "How frequently is customer satisfaction measured?"
· Caution: It is important to measure customer attitudes in the most efficient way possible, which typically involves asking one question directly instead of asking two to three questions that get at the idea.
2. Assuming causality from a simple correlation. With a correlation, there is no way of knowing if X causes Y or if Y causes X, just that there is a relationship between them.
· Suggestion: Remember when interpreting correlations that the only thing they tell us is how strongly related the two variables are. Any claims of how one variable impacts another should come from regression results.
3. Assuming that all variables that could possibly affect the dependent have been controlled.
· Suggestion: Pay attention to the R-square values in the analysis. These will let you know how much of the variance of the dependent variable has been captured by the variables we have included in the model.
4. Thinking that following a given set of steps will ensure high performance. The truth is, the existence of competition makes performance relative, not absolute. A company can do all the right things, but if a competitor does them faster and better, typically the competitor’s performance scores will rise while the company’s will fall.
· Suggestion: Collect and analyze competitive information alongside data about your company. This helps get a feel for the true landscape, and is particularly important in highly competitive fields.
Let this be food for thought as you reflect on your own research programs. Think carefully about how you are interpreting the findings and be sure not to fall into any of these common traps!
Reference: Rosenzweig, Phil. 2008. "Common error in marketing research — and how to fix them." Marketing Research, Fall2008, Vol. 20 Issue 3 p:6-12.