MIT Sloan Management Review Article on The Big Data Problem That Market Research Must Fix

Big data can support smart market research, but only if researchers embrace the basics of understanding what it is they want to measure — and how.

Today’s businesses see market data as a commodity. Readily accessible information about consumer activity and preferences allows market researchers to develop large data sets to mine for consumer insights. And indeed, a look through recent market research industry publications shows that discussions in the field have been dominated by a focus on data analysis.

But more often than not, insight into what customers really care about is hampered by the quality of the data being collected. Some market researchers conflate the idea of data quality with sample size, with the belief that reliability, validity, and other characteristics of “good measurement” derive solely from the amount of data collected. This is certainly not the case.

A heavy emphasis on data collection and analysis is irrelevant if it omits the first and most important step of market research — the design of the metrics. In the psychometric tradition, survey development and the construction of specific survey questions has been emphasized as the most important step in the research process. Unfortunately, this step is getting short shrift by most market researchers today.