Much has been written about business intelligence (BI) and its importance to companies of all sizes and in all industries. Business intelligence is the cornerstone of a wide range of business initiatives, such as improving operational efficiency, revenue growth, process optimization, improving CRM, and on and on and on.
But what about "market intelligence"?
At its core, market intelligence is the gathering, analysis, and dissemination of information relevant to any market segment in which your company participates or is thinking about participating. Back in the day, market intelligence was used merely to keep an ear to the ground for activity in a particular market and as a way to keep track of the competition.
Today, however, market intelligence (MI) has come to encompass much more than that, utilizing big data. With the help of more powerful, versatile and flexible analytics, market intelligence has begun pulling in broader market information that can be used more comprehensively to assess new product and market opportunities, competitive weaknesses, and growth potential, as well as possible merger and acquisition targets.
Once considered by some as a subset of business intelligence, MI is now being used by many companies to put their BI in context. It does this by integrating insights about the outside with a deeper understanding of the current state of the enterprise based on business intelligence analysis. So while BI takes into account things like total sales, products shipped, operational efficiency, and so on, MI looks at the stuff BI ignores, such as what the competition is up to, market trends, buying patterns, and more.
So, if your company is using business intelligence to get lean and mean, better manage inventory, improve customer service, and generally optimize operations you may be missing half the picture if youíre not also gathering market intelligence.
Wait, how can I start taking advantage of market intelligence?
First, itís important to understand that MI is not just data gathering -- itís a combination of data and analysis to create knowledge and insight. Market intelligence has four cornerstones: competitor intelligence, product intelligence, market understanding, and customer understanding.
While each one of these four informational cornerstones can yield valuable, actionable data on its own, when you use analytical tools to integrate them, the combined information provides insights that can be eye-opening.
For example, competitor and product intelligence may reveal that your main competitor is dropping the price on a key product. Good to know, right? Hold on. Product intelligence also tells you that a new product line is being introduced shortly. Even better. But wait, thereís more. Competitor intelligence also reveals that their board is pressuring the CEO to find more revenue. Wait, what? You now realize that your biggest competitor is about to take a new direction and enter a new market with a new product line.
Thatís the power of market intelligence.
To put it to work for your company, you need to start by asking several key questions that can help you determine goals and objectives for which you want to use MI:
- What demographic/geographic markets are the most interesting and lucrative for us?
- What products can be cross-marketed to existing customers?
- What existing products are the most attractive to new customers and markets?
- Are there identifiable buying patterns associated with our products and customers?
- What new markets should we tackle first?
- Where should we devote the most resources?
Once you have the answers to those questions in hand, youíll need to organize your MI operations based around the following:
- Data sources. These can include information from sales and distribution teams, industry associations and forums, customers, government resources, social media, and Internet research, for starters.
- Analytical skills and tools to process your MI data. There are any number of good BI/MI-related analytical solutions available including Microsoft SharePoint, Sisense, IBM Cognos Business Intelligence and others. If your company lacks the expertise and resources, work with an outside vendor.
- Top management support. Any data gathering initiative needs the cooperation of a variety of entities, departments, and individuals. Gaining access to these resources is a lot easier with top management actively supporting and even engaged in the process.
Regardless of your company size and industry, investing some time, effort, and money in market intelligence can provide a big pay-off. Gathering MI data and employing effective analytics to turn that data into knowledge and insight that will enable you to make better, more informed business decisions. And making the right decisions can make all the difference between success and failure.