Today’s business development and marketing battles are based more on an organization’s intellectual capital more than any other resources.
They are about how much information an organization has over its competitors. In fact, a company’s biggest competitive advantage could be its information content. The amount and the quality of information an organization has, determines the kind of decisions it makes in determining market opportunities and creating market development metrics. Information is power, and organizations that have the right information at the right time have the power to become market leaders.
Unfortunately, a lot of small organizations have not taken market intelligence to heart. Many small business owners just have a good product or service in their shelves waiting for customers to purchase it. They neglect market intelligence because most feel it’s an expense they are not willing to incur. This is a critical weakness as without the right information, a company ends up doing a lot of trial and error, thus wasting time and resources. Yet, companies that use their budgets and their teams more effectively to gather market intelligence surge ahead faster and further, because they make the right decisions from the get-go.
Luckily, most market intelligence is based on readily available information. The world today is more interconnected and the supply of information has exploded. Anyone can get any information they need, anytime. Organizations therefore have a greater responsibility of verifying every piece of information they have, critically analyzing it and strategically utilizing it in decision making. Making a wrong decision with the right information is as fatal as making a right decision with the wrong information and just as bad as making a wrong decision with the wrong information.
For you to ensure you gather the right information, the solution is to list down forces that drive your organization’s sales, costs and profits. You can find out from different departments what kind of decisions they have to make in regards to these three factors and what kind of information would help them make better decisions. This way, you have a clearer picture of the kind of information you need to gather.
Typically though, the four cornerstones of market intelligence are competitor intelligence, product intelligence, market understanding, and customer understanding. Each of these areas can be used by themselves. However, their true power comes from the integration of all four of these disciplines. For example, you may know that a competitor is working on a new line of products (product intelligence) and you may decide to start one of your own and launch it before theirs. However, you may also know that your consumers are growing towards a new trend and may not exactly be amused by the new product line a few years down (Customer understanding). Integrating the two pieces of information could help you make a better decision than if you relied on just one piece of information.
Just because ‘everyone’ is doing it doesn’t mean it’s the right thing to do. Take for instance the quail craze in the past year. Market leaders reaped untold returns because they had done their research. They knew there was an open market and they knew what they needed to do to thrive in this market. However, many copy cats got into the business without doing their due diligence and without thinking twice on who the consumers were and how the market trends were likely to evolve. As a result, the market was suddenly saturated and many late comers went into huge losses.
Knowing that the quail business was the next best thing after sliced bread was valuable information. But how valuable was the market a few months down and what would it take to be successful? This is where market research and analysis comes in. By analyzing market trends, consumer trends and likely future outcomes, one would have understood whether the business was worth undertaking or not. This kind of information would have given a clearer picture on an investor’s potential for success in this business. An investor would have known whether to sell quails, or their eggs, or to start a new product line by adding value to quails or their eggs or even moving to an entirely new market in another country.
For an organization to achieve world class market intelligence, several methods are applied. It is important to note that information is only valuable if it’s turned into knowledge and wisdom. Otherwise, it would just be a waste of time and resources. Some of the most common methods used to gather information are:
Market intelligence could be as simple as grapevine conversations in supermarket aisles or at the watering hole in the office. Listen keenly to what people are saying about certain things that could impact your business. In addition, watch their actions towards certain things. The Japanese have a saying, ‘watch not a person’s mouth but his feet’ similar to the old English famous saying, ‘actions speak louder than words.’
In the 1970s, Toyota’s marketing researchers stood near supermarkets in large parking lots and watched how customers loaded their groceries into the boots of their cars. Based on what they saw, they were able to redesign Toyota’s boots to provide more room and easier sliding of luggage into the boots. Company personnel can also learn a great deal from ‘mystery shopping’. This could be done by visiting competitor’s stores or other stores where your brands and competitor brands are sold and observing buyers in action and engaging in casual conversations.
In addition, creating external networks could be of great importance to your business. Participating in workshops and conferences by industry experts and just attending networking sessions could lead you to very insightful information that could not have been gathered elsewhere.
While observation may usually not be capable of providing strong or systematic evidence, it certainly can be suggestive and useful in other kind of research.
Use of Secondary Data
Secondary data is already existing information that had been collected before, perhaps for another purpose. This can be gathered from books, periodicals (Newspapers and magazines) or buying information from research organizations.
It is important to keep an eye on the media and what they are reporting. In fact, most large organizations have a media monitoring department whose core mandate is to monitor what the media is reporting on the goings-on within and without their industries. Any information that could have an impact on the business, directly or indirectly, is considered valuable.
Designate one or two hours every day to just check out what’s going on around you. You’ll be surprised at the little mundane things that affect your business positively or negatively.
Use of primary data
When the needed data does not exist, or is outdated, incomplete or unreliable, organizations can now embark on conducting their own research. An organization can do one-on-one interviews, focus groups, surveys or experiments. This method can be costly and so an organization needs a very strategic plan on how to conduct it and what kind of information they need from it.
Most small companies may not afford to take this direction due to limited resources. However, this does not mean that they cannot design their own ways of collecting primary data. Primary data could consist of names and addresses of your customers. Those can be obtained from customer checks or by having the customer fill out information cards. Primary data also includes what is purchased, how much, how often, when and specifically by whom.
Sales associates could also be trained to gather such information by talking to customers who come into your business. They should move from the mere, ‘Hi, how can I help you?’ to ‘Is this your first purchase or are you upgrading your current model?’ or ‘Which brand do you normally buy and from whom?’ or ‘Do you like our services or would be there be a more convenient way to serve you?’ Over time the information garnered from these types of questions will be valuable to your decisions regarding future inventories.
This allows you to profile and segment your customer base and to predict future trends by observing current trends. For instance if you run a salon, you’re able to know which hairstyles last how long. That way, when that period lapses, as a discerning business owner and as a sign of great customer service, you can call your client to remind them it’s time to change their hair-do. Now that is how loyalty is created.
The key to successful market intelligence is timely collection of relevant information and processing it quickly so it can be used to support your entire operation. It will help you shift your focus from merely what’s selling to who’s buying. As Sun Tzu puts it, ‘time spent in reconnaissance is seldom wasted.’ Gathering market intelligence is an investment you can be sure will have returns if used right. Have an insightful month ahead!