When developing a market research survey, you must first determine what incidence rate and sample size are acceptable in order to determine feasibility and feel confident about the results generated by the research.

In your favor is the fact that incidence and sample size varies based on your target audience and objectives. What makes a certain sample size or incidence rate good or bad is subjective to the study at hand.

There are several variables to address when setting the optimal sample size and incidence rate for a market research survey for your building products company. It depends on the overall population size and variability, what data you want to collect, and level of confidence you want to have in the results.

Sample Size vs. Incidence Rate in Market Research

What is Sample Size

As the name implies, a sample size is the number of people you will gather data from during your market research. To be considered a good sample size, the sample must be a sufficient representation of the whole, while not overburdening your process by trying to connect with every stakeholder.

What is Incidence Rate

Meanwhile, the incidence rate in custom market research refers to the number of participants within your sample pool that will actually qualify for the study based on your screening criteria. The more specific your criteria, the lower the incidence rate, generally.

For example, if you want feedback from electrical contractors in a specific region, and your only qualification is that the respondent have the proper licensing, the percent with full electrical contractor licensing would be your incidence rate. 

However, if you want to hear from licensed electrical contractors who work in a specific region AND have purchased one of your brand’s products in the past year, there would be a lower incidence rate within your chosen sample size. 

How Sample Size and Incidence Rate Impact Project Cost

Both the incidence rate and sample size will impact a study’s cost, feasibility, and length of time. 

If your incidence rate is too low—meaning you have a highly specific audience—it may be difficult to gather a sufficient number of quantitative surveys in order to glean statistically significant information and insights. In other words, you may struggle with the feasibility and trustworthiness of your market research. It’s helpful to set respondent criteria that aren't overly restrictive, so you have a large enough audience to accurately inform the insights of the study.

The same goes for sample size. You need a large enough sample to account for variability among customers and your target audience. On the flip side, you don’t want such a large sample size that it takes a burdensome investment. 

To have a good sample size and incidence rate is about finding the right balance.

Also, keep in mind that your incidence rate could influence your sample size. If you’re working with a very low incidence rate from the start, you might have to accept that you’ll have a smaller sample size by default.

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3 Factors to Consider When Determining Sample Size and Incidence Rate?

When determining the sample design for your market research, be thoughtful in your approach. Here are some questions to help you determine an appropriate incidence rate and sample size for your study.

1. What is the Overall Size and Variability of the Market?

One of the main variables to consider is not only the size of the population or market you want to measure, but its variability. If a population is significantly varied in terms of traits or characteristics that you deem important for your custom market research, you need a large enough sample size to account for that variability. Think about any outliers and how meaningful it would be to get their input.

2. What Data are You Looking for and How will You Use it?

Knowing exactly what type of data you’re looking for and how it will be used impacts the level of precision required in terms of population statistics. For example, if you’re trying to nail down a safety feature on a building product, something that could be detrimental to the health and well-being of your product users, it’s important to aim for a high level of precision. If you’re merely trying to decide what shade of blue is most appealing to DIY homeowners, you can get by with less precision.

3. What Confidence Level is Required for Your Study?

Finally, the right sample size and incidence rate for your study depends on how confident you want to be in the results, or what margin of error is permissible. 

There are two key factors here: 

• The confidence interval (aka, margin of error)
• The confidence level (ie, repeatability)

Your confidence interval, or margin of error, reflects the uncertainty surrounding a certain statistic, and it is communicated as a numeral. If 75 percent of your survey respondents select an option, and you have a confidence interval of 5, you can be confident that between 70 percent and 80 percent of people would’ve picked the same option, had you sampled the entire population. 

Your confidence level, on the other hand, is reflected as a percentage, and it refers to the probability that you would get roughly the same results if you conducted the survey within the same general population over and over again. This is also understood as the repeatability of your study.

Typically, the higher level of confidence you require, the larger the sample size you want to set. Again, health and safety are two areas where you need to collect highly reliable data.

Choosing an Incidence Rate and Sample Size for Your Market Research

As you approach your sampling design for market research, keep the above in mind. You have the freedom to develop a study that accounts for a specific set of variables pertaining to your customer base and target audience as related to your brand, market and products. 

Even so, it can be difficult to determine the right sample size for your research. Our team at The Farnsworth Group is familiar with the common problems of sampling that can arise during market research, specifically within the home improvement and building materials sectors. With that in mind, we can help your company design a study with the right criteria to get the numbers you need to make important strategic decisions.