Newtown Square   •   Philadelphia   •   Detroit   •   Cincinnati   •   Sacramento   •   Rochester   •   Willow Grove   •   Totowa   •   Orlando   •   Buffalo

What is Incidence Rate (IR) in Market Research?

There are several terms to know when first delving into market research, one of the most important of which is “incidence rate” (IR). Incidence rate refers to the number of people who are presented with a study and actually qualify to participate in it. The incidence rate is valuable because it demonstrates how difficult it is to reach a specific sample of the population, with low incidence rates often indicating higher research costs and, ultimately, poor research feasibility. Here’s what you need to know about incidence rate in market research:

The incidence rate in market research is presented as a percentage of a sample. There are two types:

As it sounds, a predicted incidence rate in market research is the assumed or projected number of people who are expected to qualify for a study. It is a measure that can fluctuate throughout the duration of a research project. Let’s say that you want to survey female pet owners. In this case, the predicted incidence rate would already be — at maximum — 50%, since only half of the individuals in any given population are female. If you add additional screening criteria, the incidence rate could drop even lower. Researchers often adjust a sample’s qualifiers after studying various IRs across multiple qualifications scenarios, allowing them anticipate the number of total respondents needed to make a project “doable” (i.e., profitable).

The actual incidence rate in market research, on the other hand, is the confirmed number of respondents who qualified to participate in a survey based on the total number of people to whom the survey was sent. For instance, if your company issues a customer satisfaction survey to all its customers, the actual IR would be 100% because everyone receiving the survey obviously meets the survey requirements: being a customer! If, however, you send a survey out to 100 of your customers and only 25 actually match your screening criteria of having purchased your product model #000 in the past month, then the IR would be just 25%.

Companies use incidence rates in market research to estimate a project’s feasibility, especially its timing and possible cost. Studies with low predicted incidence rates, for example, frequently demand more effort, requiring a larger initial survey net (so to speak) in order to land a specific type of respondent. More surveys to print/publish, distribute and collect means more time and more money, often resulting in higher research costs as indicated by “cost per interview” (CPI) or “cost per complete” (CPC). In other situations, companies might try to raise the incidence rate, possibly relaxing eligibility requirements for a project’s respondents, fine-tuning their segmentation and targeting practices and/or oversampling.

Incidence rates in market research reveal a lot about the feasibility of a study. To learn more about using incidence rates in market research to maximize outcomes and increase ROI, please contact our team of market researchers at Research America.