Let’s look at a major marketing misconception today: the more marketMarket definition in B2B and B2C - The very notion of "market" is at the heart of any marketing approach. A market can be defined... data you have, the easier it is to do your marketer’s job. And thus to sell. Paul Millier, one of the world’s leading experts in B2B marketing, has explored this in an explanatory post on his blog and shows exactly the opposite.
Do you need bigger or better data on a market to improve sales?
In terms of B2B innovation, I am a bit partial. Because I had a professor at EM Lyon whose work I particularly admire: Paul Millier.
Paul is the author of various fundamental works such as “Marketing the Unknown” and “The Anti-Bible of Marketing and Management.”
An innovation blog to read and reread
A few years ago, as part of the Master’s degree in Technology and Innovation Management at EM Lyon, Paul launched a blog on innovation.
I thought this blog had disappeared, but I am happily realizing that it is still there (although only available in French).
This is a perfect opportunity to revisit one of the clichés of innovation and marketing. Namely, the belief that the more market data you have, the better you know it and the better you sell. Or the better you do your marketer’s job, depending on your interest.
In a previous article, we discussed the difficulty of making customers express their needs. When it comes to the analysis of emerging markets, another difficulty has to be overcome. It is more behavioral than methodological per se.
Market data: logic and the principle of reality
Indeed, logic and common sense tell the rational mind that the more information we gather on a subject, the better we know it. And even more, the less risk there is of making a mistake.
However, there can be a major drawback to gathering as much information as possible. A problem related to the amount of data processed.
Indeed, research has shown that when we collect more information to form an opinion or make a decision, it is not the relevance of the judgment or decision that increases. What grows is the degree of confidence we gain in the judgment we make.
Let’s take an excerpt from Paul Millier’s post
Excerpt from Paul Millier’s post-Third paradoxical principle
Gather as much information as possible about the market before attacking it
“In conclusion, even though managers tend to overvalue the conscious decision-making process, there is no need for long, heavy, and expensive market studies.
“When the market is just emerging, intuition based on field observations, on quick initial experiments and feedback from potential future partners, often gives sufficiently good results to get started.
In any case, at this stage, it is unnecessary and costly to perform data analysis on “representative” samples of 999 people.
A study (A. GRIFFIN, J. HAUSER The voice of the customer. MIT Marketing Center, working paper n° 91-2, January 1991.) in fact shows us that interviewing 6 to 12 customers provides about 60% to 80% of all the information that we would get from interviewing a large number of customers.
Let’s finish with the futility of quantitative approaches based on samples. We could perhaps keep in mind that a sample must be representative of the population to be studied.
But how do you constitute a representative sample of a market that doesn’t yet exist?”
Cf. www.blog-innovation.com “Third paradoxical principle: Gather as much information as possible on the market before attacking it” by Paul Millier (only available in French)
From the learning curve to gathering market data
Paul Millier’s explanation is clear even if it is counterintuitive. The basic marketer will in fact swear by, I quote, “the representative sample of 1,000 people.” Even if they know nothing about their market and are therefore unable to describe what a “representative sample” of an unknown population is.
The goal in this case is not to better know the market but to reassure oneself with supposedly scientific tricks (a margin of error). This can also be seen as a desire to cover oneself in case of failure (“We measured everything, boss!”).
Precise and inaccurate data
How many times have I seen clients boasting about precise data collected from a supposedly representative sample when a simple qualitative study would have been more than sufficient? Even better, the latter would have provided much more useful market data.
I won’t even mention those qualitative studies that are carried out on a sample of 300 people, because “you can never be too sure of the result.” Don’t laugh, it’s real life.
The experience curve at 10-12
And for that, you need to know the experience curve. It’s not at 300, and even less at 1,000, but between 10 and 12. Of course, the more you repeat obvious things like this, the more customers you’ll find doing the opposite.
And that’s great because that’s how research firms get rich.
To understand the experience curves in qualitative interviews, you can refer to this post.
