Keeping track of your competition and the state of your industry is an integral part of operating any business. Traditionally, that information has been termed “market intelligence.” In recent years, the practice of collecting market intelligence has expanded to include analytics that can help you improve your business model and projections. Market intelligence can help you understand your market better to run a more profitable business.
At its core, market intelligence uses multiple sources of information to create a broad picture of your company’s existing market. It assesses your company’s customers, problems, competition and opportunities for creating new products and services.
You can collect market intelligence by referencing sales logs, customer data, surveys and reviewing social media metrics.
Saul Dobney, CEO of research consultancy group Dobney.com, says it is easy for small companies to get started with a commonsense approach.
“It can be as simple as visiting your competitors’ websites or stores, finding published information about the number and type of potential customers, [and] keeping up to date with developments in your area from magazines, journals or business associations,” Dobney said. “It also includes checking for customer comments and feedback online that will help the business improve its offer or service.”
Market intelligence involves identifying your target market and understanding the needs and trends of your consumers.
Market intelligence is often confused with business intelligence, but they aren’t the same thing. Business intelligence refers to data specifically about a company, while market intelligence looks at the overall trends.
In general, business intelligence is information about internal company performance. This includes how many products were shipped and the total number of sales in a month.
In contrast, market intelligence focuses on external information, including customer demographics, geographic information and what consumers buy. It also looks at the competition to see where your business stacks up relative to the rest of the marketplace. All of this can help form an analysis of business intelligence.
Market intelligence also considers what is happening with your company’s competition, which business intelligence ignores altogether.
Successful market intelligence answers concrete questions about current and potential customers and competitors, and helps your company determine its internal goals. Here are some questions that market intelligence can address:
Market intelligence helps businesses analyze the overall environment in which they are operating. This helps your business spot potential risks and identify new opportunities for growth. Most companies do this by looking at these four criteria.
Competitor intelligence involves gathering and analyzing information about your competitors. Analyzing your competitors’ strengths and weaknesses can help you gain valuable information about your own company and why customers don’t always choose your product or service.
For example, a competitive analysis report is a regular tool in most marketing operations, assessing the level of service a product provides. A competitive analysis report could include everything from pricing and product features, all the way down to target audiences and key demographics. Once compiled, all of this information can be used to create a formidable product that caters to the customer, while avoiding problems other businesses have faced.
Product intelligence involves analyzing the quality of your product or service. If you sell a physical product, it involves looking at the manufacturing process and whether you’re building the product as efficiently as possible. The information you gather will help you improve the value of your product.
Gathering this type of intel is fairly straightforward, as it requires you to look at other products on the market and assess their strengths and weaknesses. That assessment covers everything from the product itself and its packaging, how it’s displayed in stores, and production processes and costs.
Market understanding is your sense of the different markets where you’re selling your product or service. This type of research helps you get a feel for how well you’re performing in those markets, and whether there are additional markets to which you could expand.
Gathering the intelligence to gain a solid grasp of the market is a combination of competitive analysis and product intelligence, along with identifying top performers in the space. With an understanding of what’s selling on the market, you can start gathering your end-user intelligence to figure out why customers prefer those top performers.
Customer understanding involves learning more about your current customers and why they buy from you. It can also help you understand any challenges you face with those customers to improve satisfaction and customer retention rate. The information you gather can also help you succeed in future marketing campaigns.
It’s common for a marketing department to put together customer personas that offer details like demographics, interests, problems they face and the solutions a business can provide to them. Those customer insights can often help an entire operation, from those in product development to the quality assurance engineers.
Market intelligence provides a comprehensive overview of your company’s place in the market, comparing your business to your competition and analyzing the behaviors of your target customers.
While there is no set plan for how companies should gather market intelligence, many do so by performing various forms of high-level analysis. Let’s look at four different strategies you can use to collect marketing intelligence.
According to Ajith Sankaran, senior vice president of market intelligence at Blueocean Market Intelligence, companies often forget that customers are a potential source of data.
“Small businesses can set up processes to maintain customer lists and some kind of customer feedback program to collect customer intelligence in an effective and largely inexpensive manner,” Sankaran said.
Your sales team is also uniquely positioned to help with market intelligence. Since sales reps speak to prospects and customers regularly, they can provide additional insights into industry trends. Using a CRM is often the best place for a company to share this information on customers in one place.
If you want to obtain your own market research data, consider sending customers online surveys or polls. Sankaran noted that this can be a useful approach, especially if you maintain your customer lists effectively.
You can use tools like SurveyMonkey or Typeform to get started. Another good option is to include a survey link on the customer’s receipt.
Dobney recommended using information to which you already have easy access: your e-commerce analytics.
“You can look at the customer journey through the website,” he said. “How many people arrive and where from? What is their next step after arriving? How many get through to the basket? How many check out? Looking for patterns and then testing different content, taglines, signposts and offers uses market intelligence to improve the offer.”
If your company is large enough, you may be able to hire a market intelligence analyst. As a specialist, the analyst can develop a more nuanced picture of the market.
They’ll do this by communicating with manufacturers, distributors, and clients involved in the creation and distribution of your company’s products. This type of dialogue – along with hard data and marketing research – comprises the majority of the market intelligence.
Once this information is processed, you can use it to determine profitable opportunities in the market.
Market intelligence can give you greater insight into your industry and help you identify new opportunities for expansion. But it’s only useful if the information you receive is accurate.
Unfortunately, staying on top of market intelligence can quickly become time consuming for small business owners. That’s why there are many online tools available to help you gather, analyze and store your market intelligence.
Popular software options for companies in need of a business intelligence system include Pentaho and Sisense. Alternatively, cloud services such as Oracle and Birst can help you easily share business intelligence among units.
While an individual can handle much of the work of market research for a small company, as your company grows you may need to devote more time to analyzing data. As the amount of information increases, it may become necessary to use statistical tools and more complex technologies to handle and manipulate the data, Dobney added.
If you are not prepared to learn a software package or hire an in-house analyst, a third-party specialist may be able to help you make the most of your market intelligence. That way, you can understand your current market environment and make the most of the opportunities available to your business.
Eduardo Vasconcellos and Katherine Arline contributed to the writing and reporting in this article. Source interviews were conducted for a previous version of this article.