Comments on: Market research is (often) worthless. Here’s why.

By: Leo Dimilo

Leo Dimilo — Wed, 15 Dec 2010 11:08:45 +0000

I find it odd that you chose nordstrom, eddie bauer and “likes to play golf” as criteria for finding customers who wanted to buy high end electronics. Wouldn’t it have been a better option to research other mail order electronics companies and then make offers to the ones who have bought there instead? Or, in the very least choose verticals that are more closely associated with electronics than something random like “golfing”. Maybe even doing something like “likes Jazz” may illicit more of response than some random hobby.
3% conversion for a direct offer to existing customers is absolutely average at best.

By: Bruce

Bruce — Tue, 14 Dec 2010 16:28:39 +0000

I also tend to agree with Dean and Meredith, but I’d like to salt the soup a bit more. In the case cited in the article, the retailer alread had a very expansive advertising presence in the marketplace. There was very little chance that anyone who was interested in high-end consumer electronics was unaware of the presence and position of the retailer. (Certainly anyone who was as much of an enthusiast to, say, subscribe to a tech or hobbyist site.) So…the reason we experimented with this idea was to determine if there was an alternative, supplemental form of advertising that might trigger a buying response. With that intention, we were kind of forced to look for less apparent and obvious characteristics of potential customers.

By: Dean

Dean — Tue, 14 Dec 2010 01:14:19 +0000

Yes, I think Meredith is right. This example only shows that market research is worthless when it asks the wrong questions. Golf-playing and Nordstrom-shopping are likely to be incidental to the purchase of high-end electronics. You might have picked up a better understanding of which leads are likely to spend their disposable incomes on expensive TVs by asking customers which tech sites they read or which mobile phones they own.

By: virtual worlds for kids

virtual worlds for kids — Mon, 13 Dec 2010 20:50:15 +0000

I guess thats debatable. I agree that market research might not be the best investment for all fields but there are several that consumer research is worth its weight in gold

By: Meredith

Meredith — Mon, 13 Dec 2010 12:51:37 +0000

I appreciate this anecdotal experience, but I am not so sure it always applies.
You need some understanding of a company’s target demographic in order to develop a marketing plan that attracts new customers. I’m probably better off advertising for Tofurkey in Vegetarian Times than Guns and Amo, even though there may be the odd gun enthusiast who enjoys Tofurkey or Veg Times readers who don’t.
I know that’s an extreme example but you can probably find plenty of more subtle cases where understanding who a company’s average customer is should influence who they market to.

By: Joseph McCullough

Joseph McCullough — Mon, 13 Dec 2010 11:55:37 +0000

Good read, Bruce. Sorry you had to pay in order to share such insight, but being able to conclude “X doesn’t work” is still a successful experiment. It almost makes me wonder if target market is more of a post hoc illusion.