If you are like most companies, you are making a big investment on market research hoping to gain insights. And these data are used to make very important decisions in various areas, from product development to customer segmentation, or from marketing campaigns to product strategy.
But how can you be positive you are relying on accurate and unbiased data?
In the recent years, the field of behavioral science such as behavioral economics and decision making research are discovering that data can be easily biased based on very subtle cues, such as wording of questions or the order of questions. We’ve been also learning that people (including your customers and ourselves) are not always rational and therefore, we provide inconsistent responses based on the environment or the state we are in.
The implications for researchers, though, haven’t been well documented.
In order to avoid collecting biased data, and hence relying on inaccurate data, what do you need to do?
The first step is to understand how your consumers really make decisions.
For example, do your consumers tend to make decisions mostly based on fast thinking (e.g., intuition, gut feeling, “what feels right”) vs. slow thinking (e.g., deep/elaborative thinking that requires weighs pros and cons from all the alternatives available to you)? I cannot tell you the answer without knowing your customers and your products/services. But I can tell you that they are relying more on intuition than you might think – or you might want to believe.
In fact, some behavioral researchers including myself believe that 75-85% of decisions we make are mostly based on intuition and not based on slow thinking.
That is because we simply do not have enough resources, such as time, energy, cognitive resources, and willpower to make all the decisions based on slow thinking. For example, how did you decide what to have for breakfast? Did you weighs pros and cons of all the possible options from your pantry and decide which one to have? The answer most likely is no. You grabbed whatever that comes to your mind first.
But wait, you might say, I know most people don’t think much before they decide what they’d have for breakfast but our customers do when it comes to our products. After all, your customers in your focus groups tell you all the reasons why they chose (or didn’t choose) your products over your competitors. Isn’t that evidence that they are thinking when they are deciding?
Or you might say that your products require careful thinking because your products come with consequences, such as financial and health/medical services.
Decades of research in behavioral science tells you otherwise.
Namika Sagara, Ph.D., President