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, however, the practice of collecting market intelligence has expanded to include analysis and analytics that can help you improve your business model and projections.
At its core, market intelligence uses multiple sources of information to create a broad picture of the company's existing market, customers, problems, competition, and growth potential for new products and services. Sources of raw data for that analysis include sales logs, surveys and social media, among many others.
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 store, 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 told Business News Daily. "It also includes checking for customer comments and feedback online that will help the business improve its offer or service."
Many businesses use market intelligence to put their business intelligence in context. In general, business intelligence refers to a broader information set about customers and product lines, such as how many products were shipped, the total number of sales in a month and other transactions occurring within a business. In contrast, market intelligence focuses on specific classes of customers, including demographic and geographic information and what they buy, all of which can help inform an analysis of business intelligence. Market intelligence also takes into account what is happening with the competition, which business intelligence ignores altogether.
Goals and process
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 infiltrate next?
- Are there patterns to what our best customers buy?
- What products could be cross-marketed to existing customers?
- Into what demographic segments can the company push new and existing products?
While there is no set plan for how companies should gather market intelligence, many do so by performing various forms of high-level analysis. Ajith Sankaran, senior vice president of market intelligenceat 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," Sankaran told Business News Daily.
Sankaran says Internet research, insights from sales and delivery teams, industry associations, and government bodies are also potential sources of good information. If small business owners want to gather their own market research data, they can also consider using DIY tools such as SurveyMonkey. Sankaran noted that this can be a useful approach, especially if customer lists are maintained effectively.
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."
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 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, including determining market opportunity and creating market development metrics.
Market intelligence tools
Keeping track of all the information included in market intelligence can quickly become time-consuming for small companies. Many online tools exist 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. You can compare solutions on websites like G2 Crowd, Software Advice and our sister site Business.com.
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.
You can learn more about getting started with market intelligence at the following resources:
Additional reporting by Elizabeth Palermo, Business News Daily contributor.