At 1Q we talk a lot about the Golden Rule. It’s not a rule for marketing research. It’s a rule for life, probably the first thing you teach your kids. Treat other people as you would like to be treated.
Pretty simple rule. So why does the market research industry seem so bad at following it? Why doesn’t it value the respondent's time or compensate them for their opinions fairly? Why isn’t the system more transparent? Most importantly, why does the entire quantitative sample survey business model rest upon the intentional deceit of consumers?
Let me explain. Our industry tells consumers they value their time and opinion, and that their time is worth our client’s money. That’s how things should work. But it’s not how they do work.
Instead, what happens is something like this. A consumer signs up to earn money for completing surveys. They start answering questions - and they answer more and more, and find they’ve earned $2.50, but they can’t redeem that money until their rewards hit $20. They’ve been filling in surveys for hours, and they’re getting peanuts. It’s humiliating and it feels unfair, so they quit, thereby giving the research company all their answers up to that point for free. It’s called breakage and many market research companies count on this model in order to hit their margins. It’s institutionalized trickery! Hold that thought.
Another consumer sticks with it, racks up the rewards for completion, and it’s all going well until they start getting near that point where they can redeem their banked credits. At that point the surveys slow up, or they suddenly seem to qualify for less of them, leaving them in a tough fight to make it to the payout threshold. They feel ripped off, so they quit too.
That is a system that treats honest respondents badly.
Unfortunately it is also a system that treats dishonest respondents well.
The respondents who are rewarded are those who look for alternative systems where they can choose from a list of surveys. They’re called “Professional Survey Takers.” These are people who have learned what to say to qualify for more studies, and which surveys will give them greater rewards. This drive for the most expedient route for payout is an effective gaming of the system that is built to game them. It creates the motivation to complete surveys as fast as possible to efficiently get to the next one. Obviously, data quality can only suffer in this paradigm.
Both experiences drive great respondents to quit and cultivates professional survey takers. To make matters worse, while online survey platforms grew in popularity, so did survey taking bots. With a push for “faster and cheaper insights” on one side and surveys being put into the field with little or no anti-bot barriers or screening, the likelihood that bots are providing the answers for your data is high. Any system that does not require tokenization or have a way of asking follow-up questions to specific respondents is perfect for these professional survey takers or bots.
All three of these outcomes are not ideal, nor are they a sustainable system for quality insights. And all because we don’t follow the Golden Rule - treat people how you’d want to be treated yourself.
It all comes down to the breakage model. Breakage is a technical term across many industries, having to do with prepaid goods that aren’t redeemed. If you buy a gift card for your grandma, and she forgets to use it, that’s breakage. With a gift card, you’re spending money on a promise of future goods. If the goods never appear, that money is wasted. But you’re actually buying that gift card to make your grandma happy, so the potential breakage doesn’t really affect how you feel about the deal. But this most common example is familiar to consumers and carries with it no additional barrier to use or redemption.
In survey samples, breakage is more insidious. Here, people are asked to spend time on a promise of future reward. If they give up before they reach the threshold level for payment, which a majority do, the survey company still gets the benefit of the time they’ve already spent. That time created data and more importantly a “complete” for which the company is compensated but no longer incurs an expense from the consumer. So by setting an artificial barrier between giving opinions and qualifying for rewards, survey companies profit from breakage – and in fact intend to profit from that breakage. And in a business with constant pricing pressure, that can make all the difference, or so it seems.
It’s maybe not so obvious why this is a bad deal for brands and research agencies. At first glance, this looks like a great system to get free consumer opinion. But insights professionals are charged with not only obtaining data, but obtaining quality data. In a deferred-payout system, there’s zero incentive for consumers to participate honestly while working towards those rewards - in fact there’s often incentives not to be, so you can get through quicker. When the only motivation for participation is speed, the truth of the customer’s opinion becomes secondary.
As more consumers become wise to the fact that their time is not valuable or compensated, the industry creates a growing distrust for survey participation. Already, we see the once lauded internet survey, increasingly relegated to the dustbin due to data quality issues. In an increasingly consumer-centric business environment, more voices for change will emerge demanding transparency in how the data is sourced and collected along with how respondents are compensated. Companies who lead with values like the Golden Rule will likely be viewed as not only consumer champions, but data quality champions.
Following the Golden Rule means reversing those bad incentives. It means paying people for their time and opinion, right away, every time. The impact on research is revolutionary. Consumers do know when their time and opinion is valued. If you do treat them fairly, they’ll go out of their way to be open, honest, and provide the answers your business can rely upon. The Golden Rule is reciprocal.
Whether we’re paying respondents immediately or giving them multiple ways to answer, we’re always thinking about the experience from their perspective. Our tokenized and verified audience of over one million is ready and willing to provide a simple answer to a simple question or engage in longer dialogue for studies covering difficult subjects. Either way, the 1Q platform is driving higher quality responses for rich insights because we treat consumers fairly.
Brands, agencies and MR firms need to insist on partners who believe in the value of consumer opinion and demand to know how those consumers are compensated. The industry must leave behind the outdated breakage model and look for partners who live their values by how they pay respondents - not with rewards, teddy bears, or sweepstakes, but with cold hard cash. Your data will be faster, richer and better - and all because you followed the Golden Rule.
About the Author:
Keith Rinzler is founder of 1Q and is passionate about bringing fairness and quality back to consumer engagement. This op-ed piece is the first in a series of showcasing executive thought leadership and the power of 1Q.
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