Statistics, generally speaking, can be dangerous

I read a Media Post story, recently, which quoted some research about consumer preferences toward environmentally-friendly providers. I will paraphrase: “Nearly 80% of consumers said they would rather buy from companies doing their best to reduce their impact on the environment.”

Really?

I’d love to see the make-up of the remaining 20%. I can only guess, but my hunch would be that a very small percentage of consumers (a fraction, hopefully) simply hate the planet and would rather buy from companies bent on destroying it. Another share of this remaining group could have been demonstrating their ignorance or apathy (“I don’t know,” or “I don’t care”). And yet another part of this group had to be thinking, “What a stupid question.”

Implications: Don’t get too far ahead of me, here. I’m not out to indict this body of research. My purpose with this posting is to remind companies that when statistics are used to season a “story”—whether in the trade-press or main stream media—one seldom benefits from the deeper, meaningful data that was uncovered in the study being quoted. Companies must be cautious about using snippets like this as if they were actionable data. General statistics like this might make for an interesting news story or blog post… but they hardly constitute the basis for sound, strategic decisions.

Good research is balanced and unbiased. It yields useful insights and actionable knowledge. It is a process of discovery… not a search for evidence to support existing assumptions.

Okay, so consumers would rather buy from companies who are trying to reduce their impact on the environment. To what extent will they put their money where their mouth is? Would they pay a 5% premium? 10%? 20%? Do attitudes vary by product category, and if so, how? How does their willingness to pay an environmental premium change, relative to socio-economic background or geographic location?

Many of us enjoy interesting statistics. But beware… there is a difference between “interesting” and “actionable.”

Here's why I raise the issue: The Great Recession has been marked by sweeping assertions that consumers are cutting back on “want” spending, and spending only on “needs.” While generalized statistics may show that frugality is the tendency of many right now, it is certainly not true of everyone. And even for those who have altered their spending habits, there are varying degrees of “cutting back,” and differing definitions of “need” and “want.”

Case in point: Go to the grocery store and conduct exit-interviews with a few shoppers. Hold up a $600 Big Bertha golf club, and ask them whether the item is a want or a need. Then, head for the first tee box at your local golf course, and ask the same question. You’re likely to get two starkly contrasting sets of answers. Among other things, the answers will depend on whom you have asked, the context of the question, and the perspective or world view of the person at the time the question was asked.

Humans are fascinating people. We are at times unique, conforming, responsible, serendipitous, moody, spontaneous, well-planned, unorganized, rational and irrational. We are capitalists one moment, and environmentalists the next, leaders and then followers, risk-takers on one matter and then safe players on the next.

That’s why, when it comes to consumer research, I implore you to be wary of sound-bite statistics. They often disguise more than they reveal.

Mike Anderson