I’m not some fancy market research expert. Let’s just get that out in the open right now. I’m a marketing strategist that uses research and I’m a small business marketing expert that’s always looking for creative ways to conduct engaging low cost research that helps small business owners make decisions.
Given these two levels of perspective, when I find something that’s practical, low cost and helps you improve the quality and profitability of your decision making — I’m all over it.
Prediction Market Research is Engaging
In my wanderings among market research experts and their blogs I ran into this fascinating article by Kathryn Korostoff (a.k.a Research Rockstar). Kathryn is a market research professional with a special interest in how organizations conduct, manage and apply market research. She wrote an article about “Prediction Market Research” and I was hooked.
First things first – what is “Prediction Market”? I had no idea, even though the phrase or name is rather descriptive, I was unsure. Here is a fairly decent definition:
Prediction markets (also known as predictive markets, information markets, decision markets, idea futures, event derivatives, or virtual markets) are speculative markets created for the purpose of making predictions. (Wikipedia)
In other words, this is a concept borrowed from the financial markets that can also come in fairly handy in the market research world as well. As it turns out, Fortune 500 companies are looking to Prediction Markets as a form of market research. It certainly can make sense as markets become more segmented and we see the growth of hyper-engaged communities.
We know the Fortune 500 have the resources to create their fancy Prediction Market communities — but what about the rest of us? Is there a way that we can leverage the power of Prediction Markets for our own purposes? Of course there is — and here are some tips on how to create your own — on a budget.
How to create your own “Prediction Market” on a budget
- Create a Facebook Group — Consider making it private. If you have more money at your disposal, you could consider creating a panel community, but if you don’t have at least $6,000 per year to spend on this platform, then Facebook is the way to go. Granted, you will have to work a little harder, but it certainly isn’t impossible.
- Craft a series of questions and posts that will engage the community. Remember, this isn’t just random posting — this is posting with purpose. You will be measuring likes and comments as engagement.
- Track your data: Facebook has some powerful analytical tools that you can use. You can read about them here.
The really exciting thing about Prediction Market research is the idea that you can use real comments and engagement from your audience to create your own mini marketplace. Granted, it’s not going to be as statistically “valid” as if you were using customer or market panels. But the bottom line is, you can use this information as a starting point and then use your QuestionPro survey tool to post simple and short surveys to the group and confirm the responses is a more statistical way.
What experience have you had with Prediction Market? Have you heard of it? Have you used it? We’d love to hear your experiences in the comments below.