Eric asks, “Under what circumstances would you support primary research vs using imperfect secondary data?”
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What follows is an AI-generated transcript. The transcript may contain errors and is not a substitute for watching the video.
In today’s episode, Eric asks: under what circumstances would you support primary research versus using imperfect secondary data? I generally suggest primary research when you have the budget, time, and resources to do so because primary research is the primary source of data that you own, and you have the opportunity to ask the exact questions you want to the people that matter the most to you, in the way you want to ask them. Now, a lot of the time, that means that the data you collect may not necessarily be suitable for others, it may be something that is only helpful to your company, but it’s the best there is. Generally speaking, whether you choose to use primary data or secondary data depends on risk. What is the risk if you get it wrong? If you are trying to figure out, for example, how to make more engaging tweets, this is not a high-risk technique.
So, if the data you’re working with is imperfect secondary data and the risk is low, such as using the wrong emoji in these tweets, that’s fine. If you get it wrong, the consequences are very small. If you are trying to buy a company worth a billion dollars, that seems to be the kind of thing you want to invest more in to make sure you get it right. The general rule of thumb is that 10% of anything spent should be on the measurement of that thing so that you know what you’re doing. If you’re spending no time and no money on Twitter and just kind of tweeting randomly, your investment in research, data, and analytics should be 10% of that, which is nothing because it doesn’t matter. If, on the other hand, you’ve got a billion dollars, then 100 million of those dollars should be earmarked towards making sure you’re going to make the right decision.
If you can’t earmark that amount of money, there’s a good chance that things are going to go off the rails, that things will not go as you expect them to. Again, primary research is the best thing to have when properly done. That raises the question of capacity capability. Primary research done by people who are not market researchers tends not to be of very good quality. For example, imagine sending out a survey to consumers about your company and asking them, “What’s your opinion of left-handed Smoke Shifters Incorporated? Are we great, really great, or awesome?” Of course, that research is flawed. It was put together by someone who doesn’t know what they’re doing when it comes to market research.
So, if you don’t have the skills to do primary research, imperfect secondary data that’s still of better quality than what you produce is the better choice. You always want to go with the best quality possible with data, just like you want clean water. Given a choice of different types of water to drink, you generally opt for the cleanest water you can. The same is true for your data. So, risk matters, skills and capabilities matter, and application matters. These are the three big factors I would use to make that decision. Always opt for the best quality data you can, given the circumstances you find yourself in. Thanks for the question. If you like this video, go ahead and hit that subscribe button.
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