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In July of 2012, FiduciaryNews.com surveyed its 4,000 subscribers on a number of topical national and industry issues. But all we really wanted to know was how readers wanted to receive our newsletter. With that in mind, it’s important to know survey done for the purposes of market research (like this one) require less statistical rigor than surveys conducted for academic studies.
In other words, this is not a scientific survey, but more of a straw poll. Both forms of information gathering can yield useful results, if interpreted corrected. For example, while a scientific survey allows the researcher to make fairly reliable conclusions regarding the entire universe of respondents, as straw poll provides an idea for how motivated the market is.
It works this way. Let’s say you need to sell 100 widgets to attain profitability and your market includes 100,000 people. If your only objective is to achieve profitability, then all you need to do is sell 100 widgets. A straw poll will tell you quickly and cheaply if you have 100 potential customers. Now, let’s say your objective is to capture a 25% market share (a.k.a., sell to 25,000 people). In this case, the scientific survey is cheaper than the straw poll survey. The straw poll gives you a more certain answer (think of it as cold calling), but it can become unwieldy and expensive for larger sample sets.
So, what did our straw poll reveal?
Here are the answers to our market research questions:
Question: Which FiduciaryNews.com newsletter format do you prefer?
Weekly with articles from a variety of sources: 51.2%
Monthly with just FiduciaryNews.com articles: 48.8%
Question: Regardless of how you answered the above question, if we offered a weekly newsletter, which option would you most prefer?
Free with lots of advertising: 78.6%
$25 annual subscription with minimal advertising: 16.7%
$99 annual subscription with no advertising: 4.8%
Question: Please suggest the general categories or specific names you would NOT like to see as an advertiser in the FiduciaryNews.com newsletter:
- Plaintiff’s/class action lawyers
- Non-fiduciary players, i.e. wirehouses, insurance companies, etc.
- Health care products
- It is a free country I do not have to read anything they write.
- The current format looks fine to me. Thanks for giving the opportunity for input.
- Anyone in the immediate industries that sell and service retirement plans
- Investment Managers
- Insurance companies/organizations, FINRA, B/D organizations, anyone who has opposed the fiduciary standard
- No problem with any firm. Users of a free publication cannot be choosy.
Question: Please suggest the general categories or specific names you would like to see as an advertiser in the FiduciaryNews.com newsletter.
- Independent investment advisors,
- E&O insurance 401k Recordkeeping platforms
- Anyone who will pay for the exposure
- Service Providers to the retirement plan space
- TPA services Financial advisor services White papers
- fi360 Center for Due Diligence (CFDD)
- Financial services firms, fiduciary service providers, general market news services, etc
Analysis: You can see it’s going to be difficult to satisfy everyone with one “product.” Half the subscribers want monthly while the other half want weekly. On the bright side, the vast majority of subscribers would prefer free with advertising, which is a lot easier to administer than collecting subscription dues. The trouble is, there’s some discrepancy among readers regarding preferred advertisers. For example, some would not want to see investment advisers advertise while others would accept investment adviser advertisements. You guys aren’t making this any easier.
Industry Issues: There were several timely industry issues we surveyed. Here are the raw responses on the analysis.
Question: How would you best complete this sentence: “I believe the new definition of ‘fiduciary’ as originally proposed by the Department of Labor…”
Goes too far. 40.5%
Is just right. 28.6%
Doesn’t go far enough. 31.0%
Question: By bringing it closer to the fiduciary standard, do you believe FINRA’s new definition of the suitability standard…(select one):
- Will make it easier for the Securities and Exchange Commission to adopt a uniform fiduciary standard. 43.9%
- Will make it harder for the Securities and Exchange Commission to adopt a uniform fiduciary standard. 22.0%
- Will have no impact on the Securities and Exchange Commission’s decision to adopt a uniform fiduciary standard. 34.1%
Analysis: Don’t be tempted to automatically assume the answer with the highest percentage is the winner. In these types of questions, you must consider the logic (as in “formal logic,” not Mr. Spock logic) of the wording. Take the first question, for example. Even though “Goes too far” scored the most votes, it ends up being the loser. Why? Because “Is just right” is a subset of “Doesn’t go far enough.” This means if we had to pick one of the three answer which would satisfy the most people, we’d pick “Is just right” even though it wound up the least favorite. That’s because, while 31% would like to see the definition go further, at a minimum they are in agreement with what it is currently doing. Translation: 59.6% of the people (the sum of “Is just right” and “Doesn’t go far enough”) would be upset if the new definition is reversed. Contrast this to the “Goes too far” crowd, who want to see the proposed definition erased from the books.
The second question doesn’t have this kind of logic. It’s more straight-forward, so the numbers are what they are.
National Issues: Long ago, when learning the ins and outs of market research, I asked a nationally recognized pollster (he was working for Newsweek at the time) what types of things I should do to increase responses. He told me rather bluntly, “Ask them whether or not they believe in abortion.” I was shocked. I wasn’t doing that kind of polling and that question had nothing to do with what I was really looking for. He told me it didn’t matter. People get motivated to answer surveys when the first question deals with a hot national topic. He said picking the topic is easy very four years – just ask the typical presidential horse race question. Otherwise, pick a hot topic. And, he advised, the longer the survey, the better off you are if you throw in a different version of the same question. We didn’t get a good response in the last two surveys we conducted, so I added the hot issue questions in this one. And, BANG! The theory worked. We got nearly three times more respondents than our last survey and more than ten times more respondents than the one before that. Here are the answers:
Question: If the presidential election were held today, who would you vote for?
Mitt Romney 76.2%
Barack Obama 16.7%
Undecided 7.1%
Question: How would you describe John Roberts decision to declare The Patient Protection and Affordable Care Act (a.k.a. “ObamaCare”) constitutional because it’s a tax rather than unconstitutional because it violates the Commerce Clause?
It’s good for the country 31.0%
It’s bad for the country 66.7%
It doesn’t really matter. 2.4%
Which president candidate will offer policies that will lead to better long-term growth for retirement plan assets?
Mitt Romney 71.4%
Barack Obama 11.9%
I don’t know 16.7%
Analysis: First, remember, this is a straw poll, not a scientific survey, so don’t read too much into these numbers. That being said, they are consistent with other (scientific) surveys of financial industry professionals. One interesting thing is the similarity in responses between the first and third questions. This sameness in responses (regardless of what the actual numbers are) is something that you would expect is a well-constructed survey. The second question is an example of a “hot topic” question. Chances are, if you took the survey, this question made your blood boil. Chances are equally likely not only is your blood not boiling (or at least boiling less), but you haven’t even thought about this topic in the month since the survey was sent. That’s the real test of whether a topic is “hot” or not.
Finally, I did get one complaint from a reader asking me why I should know who she’s voting for. I told her I didn’t care to know and, since the survey is anonymous, I would never know how she voted. I then explained what my professor (the national pollster above) told me, but I could tell she was still upset. Finally, I told her she could just skip those questions since they weren’t important to me anyway. After all, that’s always an option.
Now here’s the interesting thing. I looked back as the number of responses for each question. There were only three questions that all respondents answered. They were these three National Issues questions. Go figure.
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