Rather than mining their data more deeply to identify market trends, organizations often rely too heavily on traditional out-of-the-box reporting solutions. And, this comes at the cost of missing out on surfacing the best opportunities for growth and success for a business.
However, more and more companies are becoming increasingly aware of this opportunity cost and exploring ways to surface actionable insights from their data. Enter market intelligence, which synthesizes data about an organization's competitors, customers, and target market to provide evidence-based projections on the direction of the market and decisions that will help the organization best position itself for future success.
This article looks at the difference between a real-time, data-driven market intelligence strategy and traditional business intelligence strategies. It will also discuss the necessary components of a market intelligence program and the best practices to implement it successfully.
How does market intelligence differ from business intelligence?
Many organizations will want to use both market intelligence and traditional business intelligence in some form or another. It's important to understand how the two concepts are different, where the concepts overlap, and how the two can work together.
What is business intelligence?
Business intelligence traditionally deals with a more quantitative transactional assessment of the sales pipeline (such as sales numbers or deliveries).
What is market intelligence?
In contrast, market intelligence offers a more qualitative and externally-oriented assessment of an organization's sales environment: what are the relevant qualities of the business's customers, what is the competition doing effectively, what trends will the market adopt in the future, what product features will be necessary to adapt to changes in the market, and so on.
This kind of information can be used to drive a number of business decisions, including informing teams about which marketing strategies will generate the greatest return for the organization. As an example, inbound marketing (or the process of helping customers find services and products via strategic content creation) is known for being one of the most effective lead generation strategies, delivering 54% more leads on average than traditional lead strategies.
One of the primary reasons why inbound marketing can be so effective is because of the data gained from a market intelligence assessment, as it encompasses information across the entirety of the organization's target market to help identify customer purchasing patterns or what kind of content they tend to consume. The data gained from a business intelligence assessment would be much less useful in this regard as it focuses more on the company, and less on the consumer.
Market intelligence is essentially the synthesis of four individual components:
- Competitor Intelligence: Competitor intelligence involves collecting and analyzing data about your competitors' strengths and weaknesses in real-time, as well as information about how they are approaching the market and entering new markets.
- Product Intelligence: Product intelligence uses real-time data to assess the performance of both your own products and services and those of your competitors. Are there product features that are particularly important to customers? Are there features they want that a product is missing? Is the pricing strategy working effectively? What are the explanations for pricing differentials between your product and your competitors?
- Customer Understanding: Understanding who the customer is and the needs they are looking to fill is the purview of customer understanding. Customer understanding can be used to derive an ideal customer profile and assess the evolution of customer needs and wants.
- Market Understanding: Market understanding involves identifying an organization's target market before analyzing the size and structure of that target market, the needs of the market, the trends permeating the market, and the organization's place in the market compared to its competitors.
How to effectively use market intelligence
Established businesses should follow the practices below in pursuing market intelligence programs. But market intelligence is not limited to ongoing concerns — prospective startups can also effectively use market intelligence to assess the viability of their ideas in the marketplace.
Specific, valid goals and key performance indicators
The first step in implementing a market intelligence program is determining the goals for the program and how the organization will assess whether the information the program generates is useful. This, in turn, requires specifying the exact metrics or key performance indicators it wishes to measure.
Ask yourself: What questions is the organization looking to answer? Is the focus on developing particular customer segments? Or is the organization looking to expand its overall target market?
Setting the right goals is necessary to analyze the data properly. The organization must then take the next step and drive business decisions based on these goals, modifying them as needed based on updated data.
Why you need accurate, specific, and real-time data
Marketing intelligence requires access to significant amounts of relevant and accurate data. The more data available, the more likely it is that the organization will be able to develop useful, actionable intelligence about the market. Insufficient data, on the other hand, will lead to inaccurate conclusions about market and customer trends.
Many companies struggle immensely with data collection and analysis. Fortunately, it is not difficult to obtain sufficient data. Data can come from several sources, including an organization's internal databases, industry organizations, reliable marketing data providers, and social media.
Surveys, including email and online surveys, can help obtain useful data on customers' needs and preferences. According to Ottawa-based software developer and online marketer Gary Stevens of Hosting Canada, email remains one of the most effective ways for gathering customer data. Stevens says, "Email marketing has evolved tremendously in the past half-decade or so and has quickly become one of the primary revenue drivers across every industry. Despite some outcries to the contrary, email is far from dead and is, according to all statistics and expert predictions, actually gaining traction as a marketing modality."
Social media and other online information sources, such as news sites and blogs, are also valuable data sources for a market intelligence program. However, effective data collection from these sources can be a time-intensive process, and organizations frequently seek out the assistance of reliable media monitoring service providers.
Not only must there be a sufficient amount of data, but the data must be as close to real-time as possible. Because so much of the world is sharing its opinions on every subject at all hours of the day, trends and markets can shift quickly.
It is not just the customer of next year or next month that organizations need to consider — but the customer of the next day.
Data analysis is only useful if those using it can easily grasp the results and apply them to business decisions. Without effective visualizations, all the data in the world can be meaningless. Organizations should first look at who in the organization is going to use the data. Will the sales department use it for determining how to strengthen relationships with current customers, or is it the C-suite for planning long-term marketing budgets?
Defining who will be viewing the data helps define the presentation form. To most effectively present data, organizations should consider using self-service, user-customizable dashboards where an end-user can simply plug-and-play data modules based on their individual needs.
Data is one of an organization's greatest assets, so long as the organization puts it to effective use. Combining market intelligence with business intelligence to provide real-time analysis of your target market's current state will allow you to drive better business decisions and grow your sales pipeline and future revenue.