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400 is the Magic Number | Market Research in Central NY

“How many completed surveys will we need?”

That’s a common question everyone has as they are about to embark upon a new market research project. Whether you are doing market research in Syracuse , market research in Central NY , or global market research – the answer depends on a variety of factors, but in many cases the magic number is 400 , as in 400 completes.

There are two predominant reasons 400 is often the number of completes Research & Marketing Strategies (RMS) aims for in market research :

1) Margin of Error. The Research Bunker at RMS always recommends that a survey have a margin of error of 5% or lower at the 95% confidence level. What that means, in plain English, is that 95 out of 100 times the survey is conducted using a proper random sample, the results will yield a value within five points (plus or minus) of the current result.  As an example, if 65% of survey respondents prefer Brand X, you can be reasonably sure that the actual preference of the overall population being sampled is somewhere between 60% and 70%. That’s a reasonable leeway for many types of marketing-based decisions. In large populations, 400 completes, or something very close to it, is the number that yields that 5% margin of error.

At this point, you might be thinking that you would like more precision from your survey data. A difference of 5 percentage  points either way can have a large impact on decision-making in some situations. Why not collect more surveys and make your data more accurate? That brings me to the second reason that 400 is the magic number in market research .

2) Through a somewhat counter-intuitive quirk of mathematics and sampling theory, increasing the number of completes does not improve the margin of error at the same ratio. Meaning doubling the number of completes will not cut the margin of error in half. The graph below shows how this version of the Law of Diminishing Returns applies to market research .