How Online Surveys Work

Companies invest in market research because it gives them hard data upon which to base their important decisions [source: Business Week Buyer Zone]. That data can come in the form of objective numbers (how many times the average consumer buys popcorn each year) or subjective opinions (what each consumer's ideal popcorn flavor would taste like). Once collected, the data is analyzed for buying trends and other patterns of consumer behavior that can help the company make informed decisions about how to design and market its product.

There are two basic stages when conducting market research: primary and secondary. Oddly, secondary research comes first. Secondary research uses existing sources to find information about the type of product a company wants to sell and the current market for that product [source: Business Week Buyer Zone]. Those existing sources could be newspaper and magazine articles, white papers by industry experts or government statistics.

After a company has gathered all of the existing market research available, it's ready to do primary, or original, research. Primary research yields data that the company generates through its own focus groups, interviews and surveys.

There are two kinds of primary research: qualitative and quantitative. Qualitative research is more in-depth and focuses on getting answers to particular questions and concerns. Examples of qualitative research are focus groups and one-on-one interviews. Quantitative research uses surveys to collect large amounts of data that can be analyzed statistically. Statistical analysis is useful for identifying trends and predicting future buying habits [source: Business Week Buyer Zone].

Surveys, therefore, are an example of quantitative primary research. A survey uses a list of set questions to generate and capture consumer responses. Those responses can either be recorded by the consumer himself or by a researcher asking the questions [source: KnowThis.com]. Surveys are either conducted in-person, over the phone, by mail, e-mail or through a Web site [source: KnowThis.com].­

Consumers who respond to a survey are called the survey panel. In statistical terms, the larger and more targeted the survey panel, the more accurate the results are going to be. If you know that your target customer demographic is women between the ages of 25 and 50, you want to survey as many women in that demographic as possible and rule out everybody else. Only then will you get an accurate assessment of what women in that age group generally think about your product.

There are many ways to find survey panels. Phone calls are a popular method ("Is there a man in the house between the ages of 18 and 25?"), as is something called the "mall intercept," where people walking through a mall are stopped and asked if they would participate in a survey [source: American Marketing Association]. Postal mail is another way to distribute surveys. In this article, we'll focusing on surveys taken online.

The Internet and e-mail make it faster and cheaper to develop survey panels. It costs significantly less to send e-mail surveys than to make phone calls or send postal mail surveys.

Also, e-mail has a higher incidence rate than other survey methods [source: Business Week Buyer Zone]. The incidence rate is the percentage of people who actually respond to a survey. People are more likely to respond to online or e-mail surveys because they can finish them on their own time, unlike phone surveys, and e-mails are relatively painless to fill out and send back, unlike snail mail [source: Yahoo! Small Business].­

Another advantage of e-mail surveys is that a company can use its own Web site to generate contacts [source: Entrepreneur.com]. Many companies already have an option for customers to sign up to receive e-mail newsletters and other electronic notifications. A company can use that e-mail contact list to send surveys to targeted existing customers.

Available software programs can help a company quickly create and distribute online surveys. A program called Listen Up! includes pre-made survey templates, as well as tips on writing your own survey, list and delivery management tools, and tracking and reporting.

Surveys can be powerful, yet subtle promotional tools for the product or service in question [source: streetdirectory.com]. For example, by asking questions about the positive attributes of a product ("How important is Coke's great taste?") you can plant a positive association in the consumer's mind. And, by polling existing customers, you can remind them of a product that they already like, but might have forgotten about. Until now, of course.

The major disadvantage of online surveys is survey fraud. The reliability of survey statistics depends on something called panel integrity. There are several security measures that a company can use to decrease survey cheaters and maintain high panel integrity:

Now let's take a look at Web sites that reward you for taking online surveys.

There are dozens of Web sites -- some that cater only to Australians, others only to Americans, etc. -- that offer variations on the same idea: rewarding consumers for filling out online surveys.

Here's how most of these sites work:

Different Web sites have different reward systems. Some send you an actual check for real money. Others allow you to accrue pretend money or points that can be cashed in for rewards. Then there's the sweepstakes system, in which each person who submits a survey is eligible for a daily or weekly grand prize.

Some Web sites, like e-Rewards, are pure survey sites, while a Web site like MyPoints allows you to earn points by shopping online at affiliated businesses like iTunes and Target.com, using your MyPoints credit card, playing online games and taking surveys.

The benefits of all of these sites are modest. Despite what some of them advertise, you can't "Work from home!" by taking surveys and expect to earn any significant income. You can, however, add some extra free miles to your frequent-flier account or get a couple free rentals from Blockbuster without investing much time or effort [source: Epinions.com].

On the next page, we'll talk about survey sites that are geared at the kid market.

Adults aren't the only ones with valuable opinions. There are more than 33 million teens and tweens in the United States, according to Market Research.com. American girls spent $80 billion in 1998 alone [source: Selling to Kids]. Companies that want to gather important market research about how kids think, what they like and (most importantly) what they buy have begun to create special online surveys especially for kids.

Just like online surveys for adults, kids surveys can either be free or paid. Many of the larger paid survey sites like Survey Bounty have links to market research firms that pay kids cash to complete surveys. Some surveys are for kids as young as 13 years old, while others have a minimum age of 16. It's typical for kids survey sites to require a parental permission letter to participate, especially for kids under 16.

Like the adult versions of online survey site sites, some survey sites for kids compensate teens with discounts, coupons and freebies on their favorite products and services, rather than paying them directly in cash. Others are completely unpaid.

At sites like SmartGirl, an unpaid opinion and review site for tween and teenage girls, kids are encouraged to take surveys, post advice and share opinions and ideas on a wide variety of topics. Here's an example of a SmartGirl survey sponsored by the Young Adult Library Services Association to gauge how interested teenage girls are in reading books.

Researchers have found that young women in particular are much more likely to share honest opinions and reveal private thoughts through anonymous online surveys and discussion boards than in real-world interviews [source: Selling to Kids]. Companies that establish partnerships with kids' online survey sites can gather useful market research about the types of products that this trend-hopping and fickle generation is most likely to buy, even three or four years down the road.

While you won't receive cash for completing free online surveys, you may receive discounts or free products and service. To get participants, some free online survey sites "pay" participants with discounts and freebies.

Some of the most popular online survey sites that don't pay participants directly in cash are e-Rewards and MyPoints.

Why participate in free Internet surveys if you don't get paid? Maybe you simply like to share your opinion. Or maybe you like the idea of helping companies improve their products. By participating in free online surveys, you get to play the role of tastemaker, influencing the look, feel and functionality of new and existing products.

From the perspective of the company creating the survey, one significant market research advantage of free Internet surveys is that you know that your respondents aren't solely in it for the money. People who choose to take free surveys online are more likely to be customers who actually care about the product or service in question.­

When respondents are paid to complete surveys, there's pressure to complete as many surveys as possible in the shortest amount of time. That encourages people to cheat on surveys or simply not take time to generate thoughtful answers. With free online surveys, you have the option of not only asking short, quantitative questions (yes or no, rate this from 1 to 5, et cetera), but also open-ended qualitative questions that often provide the most actionable results [source: CustomInsight.com].

A good way for companies to quickly survey customers for free is to add short poll questions to their Web site. Here are some suggestions for improving market research through online polls:

On the next page, find out about survey Web sites that pay you to take surveys.

When conducted by a reputable market research company, paid online surveys can be an easy way to make a little extra cash in your spare time. These companies used to seek consumer opinions in the mall or by phone.

Many of these market research companies are now relying on the Internet to meet their survey needs. However, if you type "paid online surveys" into a search engine like Google, you'll get hundreds of pages operated by middlemen advertising "get rich quick" schemes [source: About.com].­

Many companies use online surveys as part of their overall market research efforts. Every product or service that a company sells has a target demographic. For example, if a company sells video games, its target demographic might be young men between the ages of 10 and 25. When conducting market research, the company will look for respondents who fit that target demographic.

The same holds true for paid online surveys. Your survey responses are only valuable to the company if you fit their target demographic. It's true that you can get paid up to $50 or even $100 for completing an online survey, but that's if you fit a highly valued, very targeted demographic. Unfortunately, you can't fit each and every demographic, so big-money paid Internet surveys will most likely be few and far between [source: About.com].

You're unlikely to "get rich quick" by taking paid online surveys, but if you happen to fall into a prized demographic, there is the potential to make a reasonable amount of money participating in paid focus groups and one-on-one interviews -- both online and off.

Many "paid" online survey sites don't actually pay cash per completed survey, but compensate participants with coupons, discounts, freebies and sweepstakes entries. For example, e-Rewards awards members receive "cash" for completing surveys. Members can exchange the cash for certain prizes like frequent flyer miles, free movie rentals or magazine subscriptions.

On the next page, we'll talk about some of the dangers of paid surveys.

There are several dangers associated with paid online surveys, both for the companies that administer them and the people who take them.

For companies, one of the major dangers of paid online surveys is that you are giving participants an incentive to lie and cheat in order to take more surveys [source: Selling to Kids]. People might lie on their demographic profile to qualify for more surveys. They might sign up with the same company under multiple e-mail addresses to maintain several different profiles. They might rush through multiple-choice surveys randomly checking answers in order to complete the survey in the least amount of time possible.

By lying and cheating on online surveys, participants will make more money, but the company will end up with useless market research.

For participants, it's important to realize that paid online surveys have become a haven for Internet scam artists. Participants in online surveys should be aware that there are many unscrupulous middlemen out there who purport to sell proprietary lists of online survey companies that will help you "Earn $3000 a month!" while "Working from home!" Many of these middlemen charge a registration fee for accessing their lists, which are in fact freely available through simple a Google search.

Another danger of signing up with a paid online survey Web site is that the site may turn around and sell your contact information to spammers. Even if you trust an online survey site's privacy policy, it's always smart to register with a separate e-mail account from free Webmail sites like Yahoo! or Hotmail.

Here are some tips for avoiding paid survey scams and middlemen:

[source: About.com]

The biggest danger of paid online survey sites is simply spending a lot of time on an activity that pays very little in return. It's smart to think of paid online surveys as a hobby that could earn you a little extra pocket money, but don't expect it to replace your day job.

For more information about online surveys and related topics, check out the links on the next page.