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Should you believe what your customers say?

MARKET research used to be about asking consumers questions. But what people say they do and what they actually do are often quite different things.

And market research is expensive.

Is it time to spend that (or even less) money on something more reliable to boost your business? Time to stop focusing on what your customers say and let technology tell you what they really do? Top research director Michael Baker writes:

Market research has, in part, been about talking to consumers to find out, for example, what they do and what they plan to do, what money is spent on, which internet sites are used to get news, preferred retailers, and whether or not would you buy product X if it were on the market.

But the technology revolution, which has left few aspects of life untouched, is also shaking up market research. It is doing this in some simple ways, such as replacing telephone surveys with online panels and substituting digital devices for the old pen-and-paper questionnaires.

Some of the changes are not so simple though. What consumers say they do, and what consumers do are two different things. The challenge is getting behind what consumers say and correctly pinpointing what they actually do.

Consumer research professionals in the retail and shopping centre industry will tell you that there is frequently a big difference between the two.

It's partly because of imprecise recall on the part of the consumer, partly because of time pressure to produce an answer and sometimes, more darkly, in order to deceive the interviewer.

If consumers can't tell you with decent accuracy what they have done in the recent past, there is no way they will be able to give you an accurate prediction of how they will behave in the future.

For example, surveys about buying intentions will often pose questions: "Will you buy a computer this year?" or "How much will you spend on clothing in the next six months?"

The academic literature on such surveys suggests that unless the purchase is to occur in the near future and the purchase itself is large - therefore requiring planning - the answers you get are likely to be too inaccurate for any useful research purpose.

If you ask a person whether he is going to buy a car in the next three months, the chances are you will get a fairly accurate answer. Ask the same person whether he will buy a new phone or how much he will spend on clothes in the next three months and the answer will probably be pretty useless.

Technology cannot help market research respondents better predict their own actions, but it can improve the way information is collected about what consumers have actually done.

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Analysing the collected information can assist to: redesign stores, stock the shelves and co-locate tenants in a shopping centre in ways that improve the shopping experience and leads to increased sales.

A number of competing technologies have their hats in the ring, with perhaps the current favourite being mobile technology, specifically something called 'mobile analytics'.

Just about everyone now uses mobile phones in public spaces, and since each phone broadcasts a unique identifying signal that can be recorded by sensor equipment, it is possible to track people as they move around in a store, shopping centre, museum, or other building, just as it is possible to use GPS to track them when they're outside.

In this way, retailers or shopping centre operators can potentially measure how people are using the facility.

If it's a shopping centre, the owner knows which stores are being visited most frequently, the most popular sequence in which they are visited and whether there are 'dead' or under-utilised spaces that require attention.

If it's a retail store, the owner can find out how shoppers are moving through it, where they are pausing, which products they are buying sequentially, and so on.

If this technology is sufficiently accurate and if people don't sabotage it by turning their phones off, then mobile analytics can gather much of the same information that traditionally has been gathered in consumer surveys.

It has other obvious advantages over traditional consumer surveys besides just its objectivity − it captures information from everyone carrying a switched-on phone rather than just a sample of people contacted during traditional market research surveys, and it does not require interference by a market researcher in the life of the consumer. 

But there is a hitch. The problem − if you can call it that − is the owners' perception of privacy.

A researcher can study a person's behaviour, but has no insight into who the person is and what the person's motivations, demographic affiliation, place of residence, occupation or even gender.

Being able to link actual behaviour to shopper characteristics is a key advantage for the market researcher using more traditional methods.

For this reason, traditional forms of consumer research that does involve asking the consumer questions personally, either online, by phone or face-to-face, are likely to be around for a while yet.

That still leaves us with the problem of inaccurate data.

But this is what can separate a very good market researcher from a not-so-good one: the experience and insight to see where the data is going off the rails - a process generally referred to as 'sanity testing' − and making appropriate adjustments.

It's a dark science, but if it's done well it can illuminate well enough to get the job done.

This article was originally published in Smarter Business Ideas, written by Michael Baker, director of research at the New York-based International Council of Shopping Centers (ICSC) from 1998-2003.

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