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 analysis and analytics that can help you improve your business model and projections. Market intelligence can help you understand your market better and run a more profitable business.
What is market intelligence?
At its core, market intelligence uses multiple sources of information to create a broad picture of the company's existing market. It looks at a 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 looking at social media metrics.
Saul Dobney, CEO of research consultancy group Dobney.com, says it is easy for small companies to get started with a common-sense 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."
Did you know? Market intelligence involves identifying your target market and understanding the needs and trends of that market.
Market intelligence vs. business intelligence
Market intelligence is often confused with business intelligence, but they aren’t the same thing. Business intelligence refers to data and information specifically about your business, while market intelligence looks at the overall market.
In general, business intelligence refers to a information about internal company performance. This includes information like how many products were shipped, the total number of sales in a month and other transactions occurring within a business.
In comparison, market intelligence focuses on external information, including customer demographics, like geographic information and what they 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 inform an analysis of business intelligence.
Market intelligence also considers what is happening with the competition, which business intelligence ignores altogether.
How do companies use market intelligence?
Successful market intelligence answers concrete questions about current and potential customers and competitors, and helps the company determine internal goals. Questions that market intelligence can address include:
- Where should the company devote more resources?
- Which markets should it try to enter next?
- What are the buying patterns of our best customers? ?
- What products could be cross-marketed to existing customers?
- Into what demographic segments can the company push new and existing products?
Market intelligence helps businesses analyze the overall environment they are operating in. This helps them spot potential risks and identify new opportunities for growth. Most companies do this by looking at four different 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.
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.
Market understanding helps you get a sense for the different markets where you’re selling your product or service. It helps you get a sense for how well you’re performing in those markets, and whether there are additional markets you could expand to.
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 in your future marketing campaigns.
Key takeaway: Market intelligence provides a comprehensive overview of your business's place in the market, comparing itself to your competition and analyzing the behaviors of your target customers.
How to collect market intelligence
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.
Your current customers
Ajith Sankaran, senior vice president of market intelligence at Blueocean Market Intelligence, said 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."
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 small business owners want to gather their own market research data, they can also consider sending customers online surveys or polls. Sankaran noted that this can be a useful approach, especially if customer lists are maintained 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 also 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."
Hire a specialist
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, clients, and others involved in the creation and distribution of a company's products. This type of dialogue, along with hard data and marketing research, makes up the majority of a company's market intelligence.
Once this information is processed, businesses can use it to make important decisions, like determining market opportunity and creating market development metrics.
Don't overlook market intelligence
Market intelligence can give you greater insights 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 companies. 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 face new challenges devoting sufficient time to intelligence. As the amount of data gets larger, it may become necessary to use statistical tools and more complex technologies to handle and manipulate the data, Dobney said.
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.