Market Research Mistakes #1 Binary Buying Intent Surveys
In this Market Understanding 2.0 Series, I help business owners, brand managers, and investors better understand the information that being presented to them, in order to improve their market understanding to help them make better business decisions.
Market Research Mistakes - #1 Binary Buying Intent Surveys
One of the most common mistakes in market understanding I see consumer brands make is using pre-launch market research to create a narrative of "guaranteed success" to their stakeholders, potential investors, and retailers — well before the proof of concept (POC) stage is complete. While many will see through this kind of oversimplification, some might still be swayed by it. However, this approach can be highly misleading, and it's important to recognize why.
Market Research Mistakes - #1 Binary Buying Intent Surveys
For example, take this actual 'buyer intent' study result I was sent as a potential investor in an Energy Drink startup (see pie chart), which suggests a strong preference for their concept/challenger brand over the market leader. The framing of these results gives the false impression that their brand is poised for automatic success, which is far from reality.
Beware of misleading narratives from flawed market research parameters.
There are two major flaws with using studies like this to imply inevitable market domination of your incumbent competitors:
1. Sample Size and Representation
In this particular study, conducted in the U.S., only 134 people were surveyed out of a population of 335 million. That represents just 0.0000004% of the total population—hardly a meaningful sample size on its own.
While small panels of 100-200 people can offer indicative insights if they are carefully selected to reflect a target audience, this number is inadequate for a broad claim about market potential. Even more critical than size is the representativeness of the sample. If those 134 respondents don't accurately reflect the demographics, behaviours, and preferences of the wider market, the results can easily distort reality. This leaves stakeholders, investors, and retailers with a false sense of security about the brand's future.
2. Binary Choice Research is Oversimplified
This type of research often presents a binary choice between two brands, asking respondents to choose between the incumbent and the challenger. Studies have shown that when given only two options, results typically fall between 40% and 60% for either side, regardless of the brands involved. While this might suggest a near even split in preference, it doesn’t provide meaningful insight into how these consumers would actually behave in a real-world shopping environment.
Real buying decisions are influenced by a wide range of factors—price, product placement, promotional activities, and competitor actions—that this kind of research simply cannot capture. A simple 60/40 preference in a controlled survey setting does not guarantee that the challenger brand will outperform in the market. As such, using this data to suggest future market share or purchase intent is highly misleading.
The Danger of Misleading Investors and Retailers
Startups that present these types of results as evidence of future success are setting themselves up for failure. Most stakeholders, investors, and retailers are well aware that early-stage market research, especially when based on simplistic 'buyer intent' surveys, is not a reliable predictor of actual performance. Even if some may initially be intrigued by the numbers, they will quickly demand more substantial proof, such as real-world sales data, pilot tests, or detailed market segmentation.
In short, buyer intent studies like these should not be used to imply guaranteed success. They can be a useful tool as part of a broader market validation process, but by themselves, they don't tell the whole story. Startups must be careful not to rely too heavily on this type of data, or worse, use it to mislead potential partners into believing success is a foregone conclusion.
Have you experienced this kind of misleading market research?
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