The two biggest wastes of market research money are performing the wrong research, then performing research wrong.

Market research doesn’t have to be expensive. Yet not performing research is more expensive because it leads to bad strategic business decisions, inappropriate campaign tactics, and your sales team compensating for poor marketing results via buying three martinis for every prospect they take to lunch.

Given that everyone has to do market research, they most often waste their research budget studying the wrong thing, and then studying it incorrectly (or, upon occasion studying the right topic the wrong way). In either case it is pure waste – money spent for no meaningful result or, worse yet, guiding a company down the long, dark road to bankruptcy.

Performing the wrong research comes in two flavors. First is the natural bias every human carries with them, seeing the world through their personal frame of reference. If a young CEO thinks that social media is the marketing end-all, their research may cause them to study social media channels to the exclusion all other modes of communication. Second, people have biases about their market and may study the wrong aspects of it. I encountered one company who had intently studied the motivations of a purchase influencer genotype who had very little actual influence on the final purchase. Because the CEO of this company had once held that same role in a previous career, he thought people with the same job title were key to unlocking his market.

Even when a company identifies the right things to study, they can study them incorrectly. I recently endured a start-up CEO who insisted on performing a survey (quantitative research tool) to perform a green field needs analysis (qualitative research). A survey might have led him to the information he sought – but wouldn’t for a whole host of methodological reasons – where as “deep interviews” or other processes likely would have.

(While I have resurrected this subject, you need both qualitative and quantitative research. The former tells you much about market needs, buyer motivations and communications. The latter tells you if there is enough need and motivation to make a business case. Check your research budget … it likely isn’t big enough.)

Knowing the problem to be solved tells you what and how to research. Unclear definition of the problem makes you to dig for gold but only find dirt.