When conducting market research, many entrepreneurs have fallen short of creating products that customers really want. Thus, the business doesn’t achieve momentum. In fact, very often startups fail.
One of the reasons why this is the case is due to confirmation bias and positive test strategy.
Let’s understand the two, shall we?
Confirmation bias is when you go out to perform market research and instead of being open to information that may not agree with your beliefs, you instead search for information that confirms what you think.
On the other hand, positive test strategy occurs when instead of asking objective questions, we design questions that are meant to give us the answers we are looking for.
These two psychological problems need to be overcome if you are to take your business to the next level. Let’s find out how.
1. Develop hypothesis from your assumptions
Every entrepreneur finds themselves making assumptions about their customers and what they need from the business and its products. However, nothing beats real, genuine and objective information.
Instead of guessing what your customers want, find out the truth and one way to do this is to turn all those assumptions into hypotheses and then search for answers to those hypotheses.
For example, suppose you assumed that when you lower the price of your products, customers would buy more resulting in an increase in revenue. Turn this into a hypothesis that states, if you bring down price, there will be an increase in sales.
If you assume that being active on social media will create customer trust, the hypothesis to this would be, if I answer customer questions on social media, there will be an increase in revenue and customer trust.
2. Testing the hypothesis
The next step is finding out whether the hypothesis is true or not. If you are testing customer reaction to price reduction, lower the price and see if there are more sales after a predetermined time span.
If on the other hand you are testing customer loyalty through social media engagement, track a number of specific customers who you reply to and see whether they make repeated purchases over and above the customers you do not reply to.
3. Ask quality questions
The right questions will help you overcome confirmation bias as well as positive tests strategy. The trick is to avoid leading questions such as “did you base your buying decision on the price?”. Instead ask “what was the main reasons why you made the purchase?”
In this way the customer is far more likely to provide you with the whole truth instead of answering a direct question. You might find that what you were assuming is far from the truth. While you might think that price was the main reason the customer bought more, you may find that the quick delivery and fast response was actually the determining factor.
Simply put, you cannot just make business decisions based on what you are thinking as the possibility of error is high.