Lies Consumers Tell

I really like Paymnts.com. Read it every day. Love the content. But I really hate misleading headlines and questionable conclusions on market research. And Paymnts.com may be guilty on both counts.

The site recently ran the headline: 90% of Consumers Would Pay for Mobile Payment Options.

Nothing gets my BS-alert-o-meter buzzing like a vuvuzela at the World Cup like a “90% of consumers” statement.

Reading a little further, here’s what I found: 57% of consumers are interested in having mobile payments on their phone; 90% would pay for the service; 64% would switch carriers in order to have access to mobile payments services; 58% would switch banks in order to have access to mobile payments services.

I’m guessing here that it’s really 90% OF THE 57% that said that they’d pay for the service. Which, if I’m correct in my guess, would make it “51% of consumers would pay for mobile payment options.”

That’s a little more reasonable.  But still not realistic.

I am loathe to criticize or critique any other firm’s market research, and I hope that’s not what I appear to be doing. But the “57% of consumers are interested in mobile payments” is a far cry from what Forrester Research found in April 2010. According to Forrester, “18% of US online adults express interest in mobile payments.”

I don’t know who’s right. Personally, I tend to agree with whoever has the more conservative numbers. Why? Because consumers lie.

There are probably more reasons than the ones I came up with, but here are four of the most common lies that consumers tell (usually to market researchers) in particular order:

1. I’m going to tell everybody I know how great you are. Net Promoter Syndrome Sufferers should stop reading this post, because they’re not going to like this. On the other hand, it’s been said so many times in the past four or so years, that they’ve probably developed a keen ability to ignore this: The gap between the percentage of people who say that they’re likely to recommend your product or service and the percentage that actually do is huge. Survey someone right after a positive experience with a firm, and you’re just asking for an even bigger gap.

2. I make well-informed, carefully considered decisions. I’ve yet to do a consumer study, or seen one from anybody else for that matter, in which any significant percentage of consumers said “I had no rational or logical basis for why I chose the provider I did” or “I flipped a coin, threw a dart, or rolled the dice” or “The woman I talked had a nice blouse on”. Consumers will always tell you that their decisions are the result of intelligent thinking.

3. I’d switch providers for that one thing you just asked me about. If 57% of consumers are interested in mobile payments, why would a higher percentage be willing to switch carriers for the service? What about the fees they’ll get hit with for breaking their contract? When push comes to shove, consumers lie down and don’t do anything. In the world of financial services, the percentage of people who actually pick up and leave their bank because someone else has a service their current bank doesn’t have is small. Really small.

4. I’m willing to pay a lot of money for that if you build it/develop it. Sure, go ahead and ask me if I’d be willing to pay for some new product or service you’re thinking about. No skin off my back to tell you “yes.” But did you ask my wife if she’s going to let me pay for that product or service when you release it? 🙂 More seriously, though, in hypothetical situations, consumers are always more likely to say they’d pay for a service. But what happens when they’re presented with a real-life choice of five add-on services? They might have said in research they’d be willing to pay for one, but they didn’t say they’d be willing to pay for all five, at the same time.

But hey, don’t let me dissuade you from thinking that 90% of consumers would pay for mobile payment options.

19 thoughts on “Lies Consumers Tell

  1. HA – I’m a researcher, and my years of experience suggest that you are absolutely right. You just cannot take what people tell you at face value, or you are going to be making decisions based upon information the consumer thinks you want to hear!

    That’s why it’s essential to have a researcher that fully expects people (not to “lie”; that suggests willful and malicious behavior to me) to exaggerate or overstate their interest in what you are selling or trying to measure! And you just have to have other questions programmed in, that will bring you closer to what is a “real” number.

    Fantastic post!

  2. Kudos. It’s so nice to see some common sense emerge around these memes.

    The gap between what people say versus what people do is usually quite large. And of course, there’s the simple ‘House’ mantra:

    People Lie.

  3. This post is right on point. As disconcerting as the ‘news’ that consumers overstate their intentions on surveys is the apparent misreading/misrepresentation of the research. You shouldn’t have to guess that it’s really 90% of the 57%–that should be clearly stated in the results.

    Survey questions can, and should, be constructed to minimize bias and overstatement by consumers. But the researcher needs to also pass the results against the ‘sniff test’, including comparisons to other similar research–as you’ve done–and then state them clearly so they can’t be misinterpreted.

  4. Frank: Thanks for commenting. You’re absolutely right about survey respondents not “lying.” As George points out in his comment, the onus is on the researcher to construct a survey that anticipates the bias consumers will have in responding. But what I’m really lashing out at here is not the researcher (or survey) but the poor (misguided?) use of the raw survey results.

    AJ: Thanks for your comment. As Frank Martin pointed out, they’re probably not lying in a malicious way. If you ask me on a survey how good looking I am (scale of 1 to 10), and I say 10 — am I “lying” or just “delusional”? 🙂

    George: Couldn’t agree with you more. I think what we’re seeing more and more of is “PR for PR” — propaganda research for press releases. Studies designed simply for marketing and PR purposes than for making business decision.

  5. As usual, there is a difference between what people say they will do, and what they will actually do when it comes time to do it. The two are more independent of each other than we think… especially when it involves us taking $$ out of our pockets.

  6. Not always. This has much to do with the skill of the questioner and the topic. For instance, we can predict with good accuracy who is going to win elections. It’s much harder to predict how many will buy a new product, but not impossible! In our business we never deal with certainty – but with “confidence levels” and “margins for error”.

  7. How do we know you’re not lying about what the market researcher said or found… Ooooh… I’m suspicious!

    OK, I KNOW you’re spinning but using reliable data to do it….

    Well, I think you are….

    You’re right, I’m just bustin’ you.

    I do think the term “lie” is often a stretch. Its provocative but reading your own text the consumers are often asked silly questions and they’re just providing silly answers.

    One thing is for sure, in marketing, but also in project management (i.e. in the building of a web-site/service/product). People rarely know what they want until they see, tangibly, what’s available…. and then its different.

  8. Frank: Good points. I think what you’re getting at is that not all consumer decisions are created equally. “Who will you vote for?” is a different type of decision than “what will you pay for a product or service that isn’t out yet and that you may or may not even be able to conceive of?”.

  9. “Half-Truths Consumers Tell” would not have generated as many hits to this post as “Lies Consumers Tell.” I’m not ashamed to admit it. 🙂

  10. JP: Good example. Part of the problem here isn’t just consumers’ responses, though. The ways that questions are asked contribute to the poor results. In the example you just cited, it’s possible (maybe not on that specific survey, but on other similar ones) that respondents have no clue what “social media” refers to, or that “socially connected” isn’t well defined. And then there’s my favorite example: The not-so-insignificant percentage of consumers who think “mobile banking” is a “bank on wheels.”

  11. Ron, you took the words right out of my mouth. We cannot expect clarity of conclusions if the questions are not clear. This is a very common problem with surveys, and gets to my comment regarding the skill of the questioner.

    That said, JP is right about people over and underestimating – they do it all the time, no matter how skilled the questioner. Which just means we have to look at the information from a variety of angles!

  12. From my days in retail, there was also the “I’ll never shop here again,” which often turned out to be an inaccurate statement (no hard data, only my own two eyes). This brings out a further interesting parameter, namely, customers overstate their intentions in order to manipulate merchant behavior to fit their goals.

  13. Jonathan: Yeah, that’s a good one. There’s a direct correlation between the price of a product/service and the length of time the “I’ll never shop here again” threat lasts for. The less expensive the product/service, the faster that threat dissipates.

  14. I am not an expert so wanted to hear if I am putting too much store in my interest in net promoter. We participate in an industry benchmarking program which illicits tens of thousands of detailed responses (business 2 business). The ultimate ranking is Net Promoter Score for the overall experience although there are many other specific areas of detail scored too. I follow NPS to gauge our overall customer satisfaction level and trend – I dont really have an expectation that every advocate will recommend. Is this a safe policy? Do customers consistently lie/bias their response?

  15. Tim: There are some things I think you should read re: NPS:

    https://marketingroi.wordpress.com/2007/12/18/what-does-the-marketing-science-institutes-award-say-about-net-promoter-score/
    https://marketingroi.wordpress.com/2007/11/01/looks-like-word-of-mouth-could-use-a-shot-of-collagen/
    https://marketingroi.wordpress.com/2007/10/10/behaviors-versus-intentions/
    https://marketingroi.wordpress.com/2007/06/29/the-great-customer-advocacy-hoax/
    https://marketingroi.wordpress.com/2007/01/11/stop-measuring-your-net-promoter-score/

    I don’t think that consumers “lie” about their intention to refer products/firms to their friends/family, but their behavior doesn’t match their intention. Another issue here is that not all consumers provide referrals to their family/friends. Younger consumers are more likely to refer than older consumers. An uptick in your NPS may simply reflect a shift in the demographics of the customers surveyed or of the customer base as a whole.

    The question a manager has to ask is: What are we going to do with the results of a metric that we measure? NPS might — might — provide some predictive value in future sales, but as a operational metric (i.e., something to use for making day to day operational and business process improvement decisions), I’d argue NPS isn’t that good. Actually, I’ve already argued that in the blog posts linked above.

  16. Interesting Ron! Mystifies me how people are always looking for one single silver bullet solution to issues that can be complex and multi-faceted. To wit: NPS. It’s not as bad as you suggest, nor is it as effective a prognosticator of growth as many would hope to believe. So MUCH depends upon type of business, cost of product, etc. It is an interesting measure on one important thing, that should be combined with other quantitative and qualitative measures of other important things to derive an understanding of just how happy your customers are with you, your product and your service.

    Gotta say: it’s been fun to interact here this week. You’ve a good blog, and an interesting perspective. Best,
    Frank

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