The more information your company has about its customers, competitors, and industry, the more informed key decision-makers will be when the time comes to formulate strategies and set new goals.
For this reason, some of the biggest and most successful companies in the world are prepared to invest millions of dollars into a practice referred to as market intelligence. Through this practice, these companies empower themselves with valuable data to improve their operations, which in turn can lead them to establish a competitive advantage over their rivals.
What is market intelligence?
Market intelligence is the process of acquiring and analyzing information about a specific industry in order to improve your business strategy. The information acquired can be related to any aspect of the business environment, such as industry trends, competitor actions, new technologies, economic and political conditions, and customer data.
However, while the term itself may sound sophisticated, the practice of market intelligence can be as simple as routinely visiting competitor websites to maintain a current understanding of their product offerings and customer acquisition strategies. It could also involve reading up on the latest industry trends or using a market intelligence tool to obtain enhanced visibility into audience behavior.
Before we dive into the key benefits of market intelligence, let’s briefly highlight how it differs from business intelligence. While some use these two terms interchangeably, it’s important to note that they are not synonymous.
Business intelligence primarily focuses on internal company data, such as sales figures, the total number of items shipped, and manufacturing lead time. It also relates to the methods, tools, software, and systems that are used in the strategic planning process of an organization. Conversely, market intelligence is a predominately external mode of research that encompasses customer demographics, geographic information, and the products consumers buy.
In most cases, both types of intelligence must be used in harmony to achieve maximum results. For instance, if market intelligence insights reveal that a shift is needed in terms of product features, you need to have adequate business intelligence insights to see these plans come to fruition and determine whether they are feasible given your current business circumstances.
That being said, the more research you conduct, the clearer a picture of your sector and its participants you will be able to paint, and it’s only by keeping a close eye on what your company does in the context of others in its space that you can gain a true competitive advantage.
On that note, let’s look at some of the primary ways that market intelligence can help you outperform over your rivals.
Improve your resource allocation
Insights derived from market intelligence can help a company decide the areas in which it should devote more resources – and areas that may not deserve as much focus.
For example, let’s say you are investigating audience behavior in your industry so you can formulate a more effective digital marketing strategy. During your research, you might discover that the vast majority of your target market is highly engaged with video content. Yet, you have primarily invested time and energy in pursuing long-form written content. This suggests that your strategy is not optimal and, at the very least, could warrant some A/B testing to see how your audience responds.
In doing so, you will be able to fine-tune your processes and allocate your resources more efficiently, providing a significant competitive advantage in the long run.
Understand consumer buying patterns
Studying consumer behavior is critical, since it helps marketers understand why and how customers buy specific products or services.
Through carrying out market intelligence research, you can begin to formulate a better understanding of why your customers make these decisions so you can laser in on them with your marketing strategy. Furthermore, if you can predict consumer buying patterns more accurately than your competitors, you will stand a much greater chance of converting consumers into paying customers than them.
Highlight segmentation opportunities
Following the last point, marketers can also use intelligence data to highlight the best demographic segments to push new products and services into.
If your company has something new to bring to the market or is simply looking to expand into new market segments, it’s vital that you carry out research to see where (and how) you should approach so you can stand the best chance of success.
In which geographic areas are your competitors seeing more traction than you? Who are the local players there to keep an eye on, and what marketing channels drive them the most traffic? Knowing the answers to these questions can help you unearth growth opportunities.
Truly know your competitors
“A horse never runs so fast as when he has other horses to catch up and outpace.” – Ovid
Analyzing the strengths and weaknesses of the leading competitors in your sector is an essential component of running a successful business. If you fail to look at your competitors and focus entirely on your own operations, then you will never be able to learn from their triumphs, and even worse – you are doomed to make the same mistakes that they make.
Market intelligence is an excellent tool that closely examines what works for the biggest winners in your space and what hasn’t been working for the less fortunate. This can help you refine your strategy in many areas, including pricing, acquisition, engagement, and even product features. Once collated, all of this information may be used to produce a powerful brand that caters to the customer while avoiding pitfalls that previous firms have encountered.