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How to use research to harness the ‘Wisdom of Crowds’

How to use research to harness the ‘Wisdom of Crowds’

By Chris Radford (pictured), director of marketing consultancy Differentiate

Market research can result in a wide variety of responses, some expected, and some not.

The inability for a respondent to remain objective, honest and unbiased is a common problem. Individuals believe that they can help produce ‘better’ research if they examine why they are being asked specific questions, thereby ‘helping’ the researcher out.

Of course, this is contradictory to the purpose of the exercise! Chris Radford, director of marketing consultancy Differentiate, considers how best to examine research results, the wisdom imparted from a consumer and how to translate this into insightful conclusions.
The Wisdom of Crowds is an idea that we came across and have translated into methodology that helps you create insights about what is important to customers when they are choosing between one brand and another.

The Wisdom of Crowds is about why the many are smarter than the one.  This idea not only explains why big crowds (i.e. quantitative research) can be so valuable, but also explains why a well-organised consultation with a few people can still produce powerful insights, when time or money does not permit formal quantitative research.

The insight of the group will always be more powerful than that coming from any individual or expert within the group.
James Surowiecki’s book, ‘The Wisdom of Crowds’, opens with an anecdote about a country fair where there was a prize for guessing the butchered weight of meat from a live ox.  The average of the guesses from the public was not only just about spot on; it was also more accurate than that of any of the cattle experts.
This is exactly what happens when we collect insights about what influences customers’ choice of products within a market.  In over 20 different studies the collective view seems much more accurate than that of any one person. 
In each of these studies we seek to identify Power Attributes.  These are attributes that influence customers when they are considering the purchase of a product.  To collect this insight we work with managers and customers in workshops.

As part of the workshop we ask each manager or customer to produce their own ranking of which attributes are most important.  In every case when we analyse the ranked scores for each attribute, the group result seems to make a lot of sense.

The evidence for this is that individuals within the group are often happier with the group score than their own individual assessment.  

So why does this work and what are the practical implications of this for gathering insights and making decisions?
The first thing is to appreciate that not all crowds are wise however as anyone who heavily invested in the stock market during the dotcom boom will tell you.  So to get a crowd with wisdom, we need follow some guidelines.  Here are four criteria that separate wise crowds from those that make bad decisions or create bad insights. 

- You must have diversity of opinion - In the event your group is an internal management team, ensure there is a cross section of opinion from sales marketing, R&D, operations etc.  If it is a customer group, try to be representative of your target market.

- People need to be thinking and acting independently - always collect individual votes and responses.  Even in a group meeting it is possible to collect individual scores as well has have a lively debate.

- People must rely on their own experience and knowledge; they must say how it would be for them, rather than try to predict what other people might think or do?  Make sure people report on what they think and not what they think someone else thinks.

- There needs to be a way to aggregate all the private opinions of the participants into a collective decision - do some good analysis on the results, count the responses, collect scores and analyse them properly.

If you use these principles, you can gather useful opinions from a smaller group as well as larger scale quantitative work.  This can be done in a workshop meeting where you can focus on the questions and generate discussion and consensus, or it can be done via simple online surveys, which take up less time and are often quicker. 

Whilst well structured quantitative assessments of large groups of customers will always provide the most robust insight it is often not affordable or just impractical. 

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