Craggy Peak Research
Better customer insights.
Better marketing.

The value of research - and the cost of not doing it

Todd Haskell and Sophie Bird | September 24, 2020
“The first principle is that you must not fool yourself — and you are the easiest person to fool.” – Richard Feynman

Research is hard to do well, and is often expensive and time-consuming. It can be appealing to just trust in intuition and common sense. And to be fair, those work reasonably well much of the time. But sometimes they can steer us astray. In fact, psychologists have spent many decades cataloging all the different ways we can go astray, and the situations when it’s most likely to happen. It turns out there are recurring patterns, one of which we’ll call the “it depends” pattern.

To understand what leads to an “it depends” situation, it’s helpful to look at some of the sayings that people offer up as advice – part of what makes up that “common sense” that people like to talk about. An example would be, “too many cooks spoil the broth.” But wait, don’t people also say “many hands make light work”? So it is better to have many people or few work on a project? Let’s try another one: “haste makes waste.” But then again, “time waits for no one.” So should we hurry or be patient?

Does that mean these sayings are just useless advice? Well, most people could probably think of situations where hurrying would be the best course of action, and others where patience is a better strategy. So the best answer to the question of whether we should hurry or be patient is “it depends.” Which leads to a more useful but also more complicated question: Depends on what? When should you hurry, and when should you wait?

There are several ways an “it depends” situation can arise. The one we’re going to focus on here is when you have two factors that act together to determine an outcome. As a concrete example, we’re going to use a research study by Christine M. Bennett, Hakkyun Kim, and Barbara Loken published in the Journal of Consumer Psychology. In their research, they looked at when people are willing to donate to a nonprofit. The two factors that were at play in this situation are principles from social psychology. The first is called social proof. Social proof involves looking to other people’s behavior to decide whether something is a good idea or not. So, if we see other people donating to the nonprofit, that tends to make us more comfortable with the idea of making a donation ourselves. The second principle is called social loafing. Social loafing occurs when people are working together toward a collaborative goal. Numerous studies have found that people put in less effort in that situation than if they are working toward a goal on their own. There are many things that can cause social loafing, but one of them is a feeling that our individual contribution doesn’t matter very much. So, if we know that many other people have already donated to the nonprofit, we may feel that our own donation isn’t going to make a difference, which could make us less likely to donate. So the question is, does telling someone that other people have already donated to the nonprofit make them more likely or less likely to make a donation themselves? Well, it’s going to depend on whether the effect of social proof is larger or smaller than the effect of social loafing.

And that’s where things get interesting. One of the things Bennett, Kim, and Loken did was compare what happens when the listed donors are corporations versus ordinary citizens. What they found is that listing corporate donors made people less likely to donate, while listing individual donors made people more likely to donate, compared to not listing any donors at all. As part of their study, the researchers also interviewed a number of nonprofit managers and asked them what would be the effect of listing corporate sponsors on a fundraising appeal. Most of them thought it would make the appeal more effective, not less. This reinforces the point that intuition and common sense is not always a reliable guide. And that research is an important tool to keep from fooling oneself.

The real benefit of research, though, comes from what happens next. Bennett, Kim, and Loken had discovered something unexpected. And then they asked, why? Their explanation involved both the social proof and social loafing side of the equation. On the social proof side, we are more influenced by people who are more like us. So, when someone was considering a donation, they were more influenced by the behavior of other individuals like them than by the behavior of a corporation. On the social loafing side, how much our own donation matters depends on the size of the checks that other donors are writing. Corporations typically make larger donations than individuals, so when we learn there are corporate donors, it makes us feel like our own donation will be insignificant in comparison.

Fortunately for nonprofit managers, this explanation suggests a way to amplify the impact of social proof: Make people feel more connection with the donors. To test this idea, Bennett, Kim, and Loken tried a variant of their experiment where people first experienced an intervention to make them identify with managers at a corporation. Under these conditions, there was no negative effect of listing corporate sponsors on the appeal.

At this point it’s hopefully clear that we have gone way beyond the realm of intuition and common sense. It should also be clear that research can not only help us identify our misconceptions, but also be a powerful guide to action. For example, another idea that comes out of this study is to emphasize the impact that an individual’s donation will have. Many nonprofits do in fact use this tactic. For example, the Austin Zoo has an "animal sponsorship" program which indicates exactly what the impact of your donation will be, such as "$50.00 – Feeds Austin Zoo’s tortoises for one week." This approach should reduce the effects of social loafing. Note how it not only makes the impact clear, but also reframes the situation as an individual task rather than a collective task.

So is research expensive and time consuming? We would argue that this is the wrong question. The real question is which costs more – doing research or not doing research. With any luck, we’ve persuaded you that research can often yield a substantial return on your investment, and that not doing research can be costly indeed.