AXA, for example, recently hired TNS and Gfk NOP to interview more than 10,000 subjects across the world to assess their Christmas gift-giving behaviours. The results suggest that after our US friends (who spend on average a whopping £764 on gifts), we British are the most generous present-buying nation, with an average spend of £600 per person. This far exceeds the scrooges of Spain (£432), Italy (£373) and Belgium (£272). Bah! Humbug!
The problem with AXA's market research is that it is, both literally and metaphorically, very average. Like most British marketers, it appears happy with an arithmetic mean as a basis for analysing consumer response.
In reality, despite its preponderance in marketing departments, calculating averages is just about the dumbest, most dangerous thing a marketer can do to market research data.
Averages are misleading. Divide the total number of working testicles in the UK by its population and you arrive at the disconcerting conclusion that the average British citizen has one testicle.
Averages also hide the true complexity of a market. Averages are predicated on ignoring and absorbing any and all variations or distributions in the data. For example, in the AXA study, the average figure of £600 could be masking the presence of two distinct segments - super-generous givers (10% of the market, spending £5000 on presents) and the cash-strapped typical givers (90% of the market, spending a sub-Belgian £111).
Averages are the enemy of market segments. More often than not a marketer will commission research that could reveal the presence of multiple market segments. But thanks to the appli-cation of the trus-ty average score, these segments remain hidden from view and any future marketing strategy. There is a common misconception that you must commission a special piece of research to reveal market segments. This is only true if you are applying averages to all your market research data. If you venture beyond the mean and into the heady territory of standard deviation and cluster analysis, any market research has the potential to reveal the presence of segments.
Averages are also peculiarly inappropriate to marketers because of their inherent focus on the mass at the expense of the target minority. For example, we can ask consumers how positive they feel about brand x on a scale of one (very unhappy) to seven (very happy). If we then apply an average to this data and receive a score of five, we probably conclude that we could do better. However, the score could indicate a brand that is generally well thought of by most consumers (in which case it is unlikely to generate large market share when faced with more positively rated competitors), or a brand loved by 20% of the market and disliked by the rest (indicating a brand likely to be wildly successful).
If you're working out how much wood you have in your truck, knowing the average length of your planks is generally useful. In marketing, where even the biggest brands derive their sales from engendering passion in a relatively small sub-group of consumers, the average score is a highly inappropriate measure.
It is doubly unfortunate that a discipline that requires a sensitivity to deviation is populated by a workforce whose statistical training ended with a bad GCSE in Maths and a blind faith in applying an average to every data set encountered.
30 SECONDS ON ... AVERAGES
- The average woman says 7000 words a day. Men manage just over 2000.
- On average, right-handed people live nine years longer than left-handed.
- The average human head weighs 8lb.
- The average person drinks about 16,000 gallons of water in a lifetime.
- The average person laughs 15 times a day.
- The average person falls asleep in seven minutes.
- The average person loses an average of 40-100 strands of hair a day.
- On average, 100 people choke to death on ballpoint pens every year.
- 80% of the average human brain is water.
- The average snail moves at approximately 0.000362005mph.
- The average human heart beats 70 times a minute. The average blue whale heart, weighing 1300lb, about 10 times a minute.
- The average person spends two weeks of their life waiting for traffic lights to change.
This article was first published on Marketing