The world of market research can seem wonky to outsiders. Businesses have a simple question that needs answering and yet to many, market research can make that question far more complicated. For a newcomer, the fundamentals are often skipped. Important questions such as “why is this important” and “how does it work” are completely ignored. You are left with a feeling of frustration, and you don’t come away satisfied. Market research should be accessible and understanding your customer shouldn’t be hard. In this blog, we explain the basics of one of the most common techniques in market research, the consumer panel.
By definition, a consumer panel is a group of individuals selected by a business or organisation to provide input on products and services for research purposes. Consumer panels are a useful technique to gather feedback, test hypothesis, discover behaviours and gain insights in a controlled method. It is fundamentally a standard data collection technique for a business’s market research.
The activities of consumer panels can range from focus groups to answering surveys and questionnaire. The former, which involves gathering a small group of consumers in a room for discussions, is costly and labour-intensive. Using the right technology and incentives, you can get the same high-level engagement and input from consumers by distributing a survey to thousands of respondents and do it for a factor of the cost. In this instance, a consumer panel can range from 100 respondents to thousands.
The consumers in a panel can represent a cross-section of the population, but more likely, they reflect your target audience. It all depends on a company’s target customer and the purpose of the research. Here are some examples:
Other demographics that you can target can include; social status, whether they’re an alcohol drinker, their location, profession, parent or not, the possibilities are endless. The capacity to target at a high-level detail is what makes a provider of consumer panels stand out.
You may be thinking what makes distributing a survey to a consumer panel different from posting a survey on our business’s social media or sending it out to your mailing list. It’s all down to research quality and avoiding confirmation bias. Confirmation bias is the tendency to search for, interpret, favour, and recall information in a way that confirms or supports one’s prior beliefs or values. There is no point in performing market research if you are not challenging your assumptions.
To illustrate this, imagine you are a business trying to improve your brand. It doesn’t make sense to only get responses from people who follow your social media as they probably already like your branding. What you want is to reach customers who don’t engage with your social media and understand why. This scenario would be even worse if the company was looking to gather research on a new customer base. By outsourcing to a consumer panel company, you can easily connect to people who aren’t your regular customers and get the fresh perspectives you need to improve.
When making any business decision, you should have the evidence and data to back it up. Assumptions and instincts don’t result in long term success. You must be able to trust the data that you gather and know that it hasn’t been influenced by confirmation bias. Performing market research this way gives you certainty in your decisions and allows you to embrace strategies fully.
There is another benefit of the consumer panels that can be summed up in the Hawthorne Effect. This phenomenon was discovered when asking workers for feedback on working conditions. When the feedback, such as better lighting, was implemented, the workers became more productive. This effect has been proven in study after study. Essentially, it shows that engaging people in marketing research leads to loyalty and advocacy as they tend to feel more privileged, valued and important. Consumer panels open up a whole new way to engage customers, both old and new, and it brings your company closer to the customer, inspiring more loyalty.
Interested in more tips on consumer panels? Check out our previous blogs covering them.