The Inconsistent Wisdom of Crowds and Market Research

James Surowiecki wrote “Why the Many Are Smarter than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations” back in 2004. The book reinforced the now ubiquitous term called the “wisdom of crowds”. Used by academics and marketing gurus alike, the cliché tells us to listen to the needs, or better said, the rants of the crowd rather than the reason of a single member of a group.

Crowds can be great at determining a consensus view where the right wing cancels out the left wing and we are left with the middle ground occupied by the statistical mean, or the “silent majority” as former US President Nixon called it. In politics and other venues this type of group thinking can be powerful and correct.

Surowiecki actually argued that crowds are often wrong, but that message seems to have been lost on most readers (remember the average North American buys only one book a year and seldom finishes it). He suggests that crowds can get it wrong by listening to gossip or innuendo, instead of objectively looking at the facts. Sometimes a pretty face or a charismatic leader can sway the crowd and lead them to a disastrous conclusion such as riots, Nazi Germany, and conclusions from market research studies (OK, I guess you saw that one coming).

Crowds and market research sample groups are wrong for the same reasons:
– They are too much alike and lack the diversity of the population; the sample was not random or representative.
– There is regional bias such as only doing focus groups in Manhattan; the people in Chicago and LA may feel very differently than the folks in the Big Apple.
– The respondents don’t tell the truth; instead they say what they think the researcher wants to hear.
– Respondents can be like sheep in that they follow the flock; they can be heavily influenced by others. They read it in People Magazine so it has to be true.
– Focus group participants can be overpowered by a biased moderator (they are not supposed to be biased of course).
– Their decisions are selfish or fear based rather than what is good for the group. They are not like Star Trek’s Mr. Spock who said “The needs of the many outweigh the needs of the few or the one”.

So, when doing market research, pick the crowd carefully to insure that it is representative of the total population. Ask the questions without bias or influence. Probe deeply to understand why people answer as they do. Avoid biases in the sample.

Listen to the crowd, but beware of the mob.

John Bradley Jackson
© Copyright 2006 All rights reserved