Thought Leadership

An Alternative Solution to Market Research Panels and Online Communities

December 19, 2017
An Alternative Solution to Market Research Panels and Online Communities

We live in a world where consumer data are growing rapidly. Nearly every behavior on the internet is tracked, wireless devices constantly share our location and activities, and smart appliances disseminate troves of data into the ether. And, by some accounts, global data are expected to double every two years for at least a decade.

While this is not a new phenomenon, the impact is still hard to understand. Thanks to this explosion of data, many energy utilities have access to exponentially more customer information than just a few years ago, and this information is often used ineffectively, and in some cases, not used at all. From detailed demographic and profiling data, program participation histories, and rich behavioral data, the opportunities for market research insights are immense.

It’s no wonder that many utilities are looking to leverage these data to build custom online panels and Market Research Online Communities (MROCs) to support their research needs. Both offer a means of gaining quick and valuable insights without having to negotiate some of the more challenging aspects of market research, namely, sample preparation and respondent recruitment.

Custom Online Panels vs. MROCs

Though the terms “custom online panel” and “MROC” are sometimes used interchangeably, the tools differ in important ways.

Custom online panels are best suited to support traditional research needs like collecting online surveys. Panelists typically complete tasks independently of one another and rarely, if ever, interact with other panelists. Custom online panels are usually larger than MROCs and typically intended to be representative of a larger population (e.g., company’s customer base). They are an excellent tool for time-sensitive research needs, and allow researchers to conduct multiple studies without recruiting for each one independently.

MROCs, on the other hand, comprise a connected group of participants, often much smaller than a custom online panel. Researchers use MROCs to conduct online bulletin boards, live chats and focus groups, among other things, and these research techniques help companies better understand customer needs. MROCs can also be particularly useful for research that spans a longer time frame, such as a product design life cycle.

Escalent has been talking with our clients about the benefits of MROCs and custom online panels for a few years now. In many cases, the benefits that these tools can offer align perfectly with our clients’ research needs, but there are clear challenges to overcome when executing a custom online panel or MROC.

Challenges to Building and Maintaining Custom Online Panels and MROCs

To put it simply, it can be expensive and time-consuming to build and maintain healthy custom online panels and MROCs. First, the right kinds of participants must be identified and recruited into the panel or MROC. Membership in a panel or community is a much larger commitment for someone to make than taking a single survey: rates of opt-in are usually low and the initial build can be costly as a result.

Consistent attention must be paid to keep a custom online panel or MROC alive and healthy. If neglected for even a relatively short time, member engagement can wane and attrition become a problem.

Research activities must be offered regularly to keep members engaged, even if there isn’t a pressing research need at the time. And these activities often require incentives to be paid, which can add burdensome costs, especially if the panel or community is large.

Despite how well-maintained the panel or community is, attrition is a logistical factor to manage. Members who choose to drop out or simply stop participating need to be replaced, ideally with someone who has similar characteristics. This means undertaking an ongoing recruitment effort to maintain a balanced panel or community.

It is often questioned whether online customer panels are ever representative of all customers. Panels largely comprise customers who are engaged enough with a company to agree to be part of an extended period of research. Many people who would be willing to do a survey here or there would not be willing to sign up for the kind of a commitment that a panel requires, much less an MROC. In light of this, how do we extrapolate the results obtained from a custom online panel or MROC to the larger population?

Can We Build a Better Mousetrap?

Given these challenges, we’ve asked ourselves, is there a better solution? Can Escalent come up with something that gives our clients the same benefits of a custom online panel without the drawbacks?

The answer is yes! We quickly determined that the hardest part of building a panel or a community is finding the right people and getting them to join. But many of our clients already have a database that contains just the right group of people (their customers) with plenty of data available about them. Instead of restricting research to a small subset of customers who agree to sign up for a big commitment, why not leave the door open for any qualifying customer to participate? This is how our Actively Managed Participants (AMP) database was born.

AMP, the Alternative Solution

With AMP, we take full advantage of the wealth of information available in a customer database without ever needing to build an opt-in panel. AMP starts by profiling the customer population, allowing us to draw strategic samples that can meet most research goals.

As research is conducted, we incorporate information we learn from each recruitment back into the database to enhance future research efforts. This feedback loop includes not only response behaviors, but also survey data that can be used for micro-targeting in the future.

From all these data, we customize an algorithm that allows for a representative sampling that mixes past participants along with customers who’ve never responded before to create a balanced and representative sample. By zeroing in on the best mix, we can recruit quickly and efficiently while attaining excellent data quality that truly represents the population.

The best part of the AMP process is that there is no need for either expensive opt-in panel recruitment or constant replacement of panelists who drop out or stop responding. Further, we can choose to provide incentives on a study-by-study basis, unlike traditional panels and communities, where incentives are expected for most any research activity.

As with all good market research practices, the devil is in the details. To learn more, please send us a note.

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John LaFrance
John LaFrance
Vice President, Research Methods & Sampling

John LaFrance is vice president of research methodology at Escalent. He leads a strong team of methodologists and sampling statisticians who are responsible for the development, implementation and execution of complex sampling and weighting designs. John’s team has expertise in survey methodology, research design, sampling theory, data weighting, multi-mode research and data quality best practices. John has helped Escalent stay on the cutting edge of research best practices, smartphone survey design, TCPA compliance, and multi-mode sampling techniques. He has published and presented on topics such as techniques for inclusion of cell phone dialing in CATI research, multi-mode research best practices, smart phone survey taking behaviors and cross cultural survey response variation. Prior to joining Escalent in 2008, John received an M.S. degree in survey methodology from the University of Michigan’s Institute for Social Research (ISR).