People often do research that ends up collecting dust on a shelf. This is partly because people do not ask the correct questions. The best questions that have the greatest ROI impact decision making and make decision makers more informed so that they make better decisions. This is how market research becomes “intelligence.” Questions that are “nice to know” should be deleted from your questionnaires. It’s a bit like packing for an airplane trip and laying stuff out on your bed and then realizing you have too much and putting away the scarves, jewelry and lotions that you probably can live without.
It is critically important that you know what you are measuring. Often I find that people do not do enough research prior to designing a questionnaire and do not look into what the correct “best practices” questions are for gathering the information they want.
Often times the decision makers isn’t screened for on top of asking the wrong questions. Are the people who answered the questions actually in your market? How do you know? Did you ask screening questions to identify them? If the person that writes the checks isn’t answering your survey then chances are that your data is biased. If the person is the decision maker and you are asking “Are you interested?” instead of “Will you definitely buy?,” then you have less solid data for your decision making. This is part of the reason that entrepreneurs often benefit from hiring an objective 3rd party researcher.
For example, “entrepreneurs” sometimes get data back that is “entre manure” because they ask questions like “Would you be interested in my product x?” Even their VC partner may say “wow, 92% are interested.” Just because 92% of Americans are interested in solar PV, doesn’t mean that 92% of all households will make a $20K-$50K investment and mount that investment to the roof of their house.
This week in Congress, “user fees” for airplane landings are being discussed. This is another example of people not understanding what the correct question is. Is the question, how to raise revenue for a safe aviation infrastructure? Then there is already a system in place to raise revenue via taxes on aviation fuel. This incorporates costs to those on private grass airfields and those using public airports alike. If you have a tax on landing at airports you miss some airplanes and you create costs to administer a “new program.” Additionally one should look at behavior when changing price or tariff because, in the case of user fees, that also means pilots might practice fewer landings. Case in point: In England, pilots have landed far fewer times that in the US because of user fees. The pilots in England have more accidents and harsh landings as a result of these user fees as well as fewer trained pilots. In this case, the unintended consequences of not doing a market simulation actually had safety consequences and “program administration costs.” Further unfortunate is that once an inefficient program is in place it is often hard to get rid of – people have plans for the revenue from price changes or tariff increases and they are difficult to remove.
The type of fee or cost structure you use is only one factor or “price” for an activity. The demand for a product depends on price, both out of pocket and convenience, for example. Also important is how that price, tariff or fee impacts behavior. People are often surprised at how a price change or fee changes behavior. The good news is that you can research how change impacts behavior by simulating the market place using market research. Plus, there is often good research that has already been done so you do not have to “re-invent the wheel.” Call your researcher and ask. They may be able to answer your question: “been there and done that study, so you don’t have to waste your time and money on a new study.”