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Sample Quality is a Function of Sample Pricing

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by Matt Dusig, co-founder & CEO

I recently attended a session on online panel quality at the ESOMAR Congress in Amsterdam. The discussion, led by a panel of experts, digressed from quality to privacy, and I found myself wondering why price, a critical factor that affects online panel quality, was omitted from the debate.

In my previous blog post on sample quality, I emphasized the importance of viewing sample frames as groups of real people. I also suggested that the pricing model for sample should shift from strictly cost-per-complete-based pricing to cost-per-finish pricing.. This model would allow invited respondents to always be rewarded for their time spent attempting or completing surveys.

Why am I so passionate about price point? I believe the MR industry is in danger of putting a tourniquet around the supply side of our business. Many market research companies are being continuously pressured to provide the highest quality service at lower prices. Consequently, as pricing pressure occurs, it squeezes the cost that sample suppliers can charge, and creates bidding scenarios where the lowest price wins. The challenge: Most research firms want attentive, thoughtful answers (quality sample), but many internal research teams ordering sample are rewarded for obtaining the lowest-cost sample.

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October 5th, 2011

Posted in Uncategorized

Online Sample Quality in a Changing Market Research Industry

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by Matt Dusig, co-founder & CEO

During the past few years, there’s been a great deal of talk within the market research industry about online panels and sample quality. I’ve been in online sampling since ’99, when my business partner and I started our first sampling firm, goZing.com, which we sold to Greenfield Online in 2005. I’m currently co-founder and CEO of uSamp (www.uSamp.com), a technology company providing panel and sampling solutions to market researchers worldwide.

As someone with a vested interest in the long-term viability of quantitative research online, I want to share my thoughts about areas that need attention. My critique of what can and should be done to preserve the field’s integrity is intended to be constructive throughout, informed by more than a decade of observing both vendor/client and consumer behavior.

Addressing sample burn

Panelists are people. Over the past several years, brands across the globe have become increasingly invested in collecting, interpreting, and monetizing data. To many, data is a means to an end, quickly forgotten as results become more important than processes. We often refer to panelists as “sample,” not “people,” but to market research professionals working in an industry founded on such data, panelists should be regarded as living and breathing entities. They are our neighbors, our friends, our family members. These panelists eat and sleep just like us, and understand the concepts of time management and reward motivations.

Participating in an online research panel can be a tedious experience, during which panelists attempt surveys with the best intentions, and spend a great deal of time trying to qualify inside of narrow quota segments — only to frequently be terminated or screened-out with little or no compensation for their time. Many opt-out and stop taking surveys altogether.

Sampling firms do their best to manage this panel burn, but due to complex business requirements and certain persistent gaps in technology between sample suppliers and research survey software, it’s impossible for sample companies to know exactly what quotas market research firms require. Sample firms are mostly blind to the real-time needs of survey quotas, largely because industry processes are heavily manual and lack full transparency.

Imagine that survey software was able to communicate with sampling databases, and, in real-time, deliver exactly the right people at the right time. Panelists wouldn’t waste time and sample companies wouldn’t disappoint panelists (in other words, burn sample).

When panelists stop taking surveys, sample firms need to refresh the panel with new people – and there are real costs associated with managing this attrition. These costs are passed on indirectly through the CPI (Cost-per-interview)-based pricing model. The fewer panelists used in a survey, the lower the price. Higher incidence (and better targeting) likewise means lower pricing.

As it gets harder and harder for sample companies to retain panelists, the industry has been placing constraints on sample companies. Many initiatives require address-validated panelists. Ask a family member if he or she is willing to give personally identifiable information to a sample company simply to earn $25 a year for taking surveys. Does this mean that panelists who are not willing to give personally identifiable information to a sample company should be left out of online sampling methodology? What does this do to the scalability of online quantitative research? Will we reach a ceiling where companies can no longer fill quotas?

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September 7th, 2011

Posted in Uncategorized