January 27, 2005 | Issue 26

Editor's Note

	MR Perspectives is a twice-monthly newsletter that provides perspectives on market research topics of interest, best practices tips, emerging trends, quick case studies, and other useful information. Subscribe View Past Issues

Events

	Feb. 3-4, 2005 New York City Project Directors Training Conference The Council of American Survey Research Organizations (CASRO) is hosting a Project Directors Training Conference aimed at project directors and marketing analysts with less than two years experience at The Roosevelt Hotel in New York City.

	Feb. 7-8, 2005 San Francisco, CA AMA Marketing Research Boot Camp The American Marketing Association will host a Marketing Research Boot Camp at the Crowne Plaza Union Square in San Francisco. Feb. 10-11, 2005 Atlanta Marketing ROI Techniques The American Marketing Association is hosting a training series called Marketing ROI Techniques: Improving Campaign Strategies, Analytics and Profitability at the Grand Hyatt Atlanta in Buckhead. This event is sold out; it will be offered again Feb. 21-22 at The Weston Horton Plaza in San Diego.

New at Polaris

	Project Manager Hired Veteran marketing researcher Christina A. Gallagher has joined Polaris as project manager. Gallagher comes to Polaris Marketing Research from The Zyman Group in Atlanta, where she was an insight analyst and project manager in its Latin America practice, overseeing research projects for several business-to-business and business-to-consumer Global 1000 corporations. Prior to that, she served as a market research analyst for Scientific Games International, based in Clifton, N.J. Previously, she lived in Tallahassee, Fla., where she was director of marketing for Kerr & Downs Research, directing a team of research associates and interns and managing a variety of research projects in the agriculture, health care, nonprofit and government sectors. She also worked as an international marketing specialist with the Florida Department of Agriculture. Gallagher holds a master’s degree in international affairs as well as a bachelor’s degree from Florida State University.

Keeping Sweepstakes Legal

Many marketing research studies use some sort of incentive system to assure an acceptable level of respondent participation or response rate for their surveys. Panel companies that do Internet or mail surveys and pre-recruit panelists to take surveys use point reward systems, cash, give away and other types of incentives, and recruiters for focus groups typically use stipends (i.e., $75/ consumer respondent). Sweepstakes also can be used as a method for boosting response rates, but making sure they are conducted legally can be tricky.

In the United States, sweepstakes and contests are regulated Federal Trade Commission at the federal level, which regulates advertising and unfair trade practices. Sweepstakes are generally permitted in most states as long as participants are not required to pay for the chance to win. Additionally, a practice known as "alternative free means of entry" is often employed where "no purchase is required" to win and anyone (participant or not) can enter to win through alternative means -- such as sending a postcard to a specific address. The postcard option is important to consider as an Internet option for a sweepstakes entry could be considered exclusionary to those without Internet access, and therefore illegal.

Different states have different laws that govern sweepstakes, which definitely should be taken into consideration. Almost every state has specific and monopolistic laws governing lotteries, but in the case of sweepstakes, as long as there is a prize and a free and equal change of participating and winning the prize, the process can be fairly easy. Keep in mind that Florida and New York require registration of games if the prize is valued at more than $5,000, and states such as Arizona and Rhode Island have strict and somewhat different sweepstakes regulations. Legal counsel should always be obtained.

With an Internet sweepstakes, sponsors must be careful as the World Wide Web is indeed open to potential participants worldwide, and could therefore be governed by foreign laws governing sweepstakes. To avoid any issues, sweepstakes sponsors should somehow restrict participation to residents of the United States (IP filtering, for example).

The important thing to remember is that any sweepstakes is a contract between the sponsor and the potential participants, so the rules need to be clearly stated and not changed. All sweepstakes should absolutely be accompanied by "official contest rules" that are written in a clear and unambiguous manner and should include specific details about the sweepstakes.

At a minimum, included in the "official sweepstakes rules" should be:

Alternative means of participation
Clear entry deadline
Consequences of tampering
Date prize will be rewarded
Description and value of prizes
Eligibility and disqualification rules
Frequency of entry
How to enter the survey (means of participation)
Information on obtaining winner list
No purchase necessary
Odds of winning
Process for unclaimed prizes
Sweepstakes begin and end dates
Transferring of prizes
Winner notification process
Your lack of responsibility for circumstances beyond your control

Calculating Incidence Rates

Simply defined, incidence is the frequency of something occurring in a given population, for example, x percent of adults in the United Stated chew gum. In the marketing research world, the incidence rate is used to measure the level of effort needed to reach respondents that are qualified to take a particular survey (pass the survey screeners).

As defined by the marketing research industry, "net effective incidence" is a summary measure of the frequency of individuals who meet all the qualifying criteria. The "net incidence" goes one step further and is the frequency of individuals who meet all qualifying criteria and agree to take the survey. These two calculations play a key role in the cost of market research because they describe how much resources (time and money) will need to be dedicated to the data collection process.

Most list and panel companies have subscribers profiled to varying degrees and are therefore able to estimate final survey incidence numbers. As a test of those assumptions, a soft launch with 10 percent of the anticipated total sample can be conducted to better estimate the net and net effective incidence. Greater care must be taken when using lists or working with panels that have not yet profiled their subscribers by the particular area of interest of your survey.

This is especially true of business-to-business research. If, for example, you purchase access to a group of subscribers who have maintenance titles, you cannot be sure they purchase the particular cleaning product of interest. Further, assumptions must be tested carefully, as maintenance personnel at larger companies or in different parts of the country may have distinctly different needs and buying patterns.

The differences are significant. As an interesting example, if you wanted to collect 400 completed surveys and the expected "net incidence" is from 80 to 90 percent, you could expect to contact between 450 and 500 potential respondents. If the "net incidence" is from 5 to 15 percent, you could expect to contact between 6,000 and 8,000 respondents. So, as the "net incidence" drops down the percentage scale, the difference has much larger pricing consequences. For this reason, wherever possible, researchers should try and obtain the most targeted sample list possible while maintaining random stratification within the group.