High quality market intelligence can significantly improve your sales team’s long-term effectiveness. But the process of gathering market intelligence is too often overlooked. This article provides a set of practical ideas for improving market intelligence, including sources of data you may not be aware of. We’ll cover:
- National Economic Analysis: We start with generating a solid basic understanding of the national economy. This is important because the way the nation’s economy grows influences all our prospect’s decision processes.
- Target Industry Analysis: We then look at how individual industries are trending. This tells us where to focus.
- Geographic Targeting: Next, we dig deeper into key geographic areas. Looking at a metropolitan level, and tying our findings to our sales regions, gives us a good idea of the potential growth per region.
- Customer & Prospect Surveys: Reach out to your customers and prospects and ask them about their industry. This is where you’ll get the highest quality information.
- Living Market Intelligence Knowledgebase: Tie it all together with an accessible knowledgebase. Update it periodically to make sure the data doesn’t get stale.
Market Research & Your Sales Strategy
Quality market research can boost your sales efficiency in several ways. The most obvious is being aware of where your team’s opportunities and threats lie. Industries often have very good visibility three to six months out and decent visibility six to twelve months out. Good market research can transfer this visibility to you and your team. This lets you ramp up sales efforts when your end markets see strength and are more likely to buy. Conversely, it lets you realign your sales efforts to other opportunities when your end markets are weakening. Therefore, it is critical to employ a quality market research process early in your sales strategy.
The first place many of us go, when we’re drafting our sales strategies, is to the past. We look at what happened last year, or the last few years. We look at who we sold to, the customer mix, the profit mix, the industry mix. We look at who had the shortest sales cycle and compare that to how much profit they generated.
Next, we look to our experience. What has our sales team heard from clients recently? What have we read in trade journals? What have we seen on the news or on social media. How are our friend’s businesses doing?
We typically have all the information necessary for the first part since it’s made up of almost all internal data. Unfortunately, when we look outside our firm, the available information is significantly reduced. We don’t have great visibility into all the industries we sell into. We may know general trends, or we have some national (or global) report on the industry that gives us at best a direction, but we’re often missing high quality, targeted market research. This is what separates a good strategy from a great strategy.
Think of it like you’re driving from New York to Seattle. Our typical approach of gut feelings and using what we’ve absorbed over the year is like driving with a hand drawn map with a corner torn out. If we use those broad global industry reports, it’s like driving with an old crinkly map and a compass. However, if we put some effort into quality targeted market research, it’s like having a fully updated GPS with traffic guidance.
Market research lets you and your team confidently make high quality business decisions QUICKLY AND easily.
The Market Research Process
While it’s often easier to hire a professional analyst for this, much of the work can be done by you and your team, provide you have the time. Below we’ve outlined a five-step process that will provide you and your team with a full understanding of your most important markets.
National Economic Analysis
- This is the bedrock of your market research. The goal here is to achieve a solid understanding of how the national economy is trending, where it’s strong and where it’s weak. To do this, we like to look at a few key metrics.
- Metric 1: GDP Growth by Industry. This tells us if an industry is growing or shrinking on a national scale. Look at this over time so you have a sense of the average growth rate. Something over 10 years should give you a good idea.
- Metric 2: GDP Growth by State. This tells us generally which states are growing and which are shrinking economically. It’s obviously easier to do business in a growing market so look for those states with a history of high growth.
- Metric 3: Unemployment Rates. This is a great indicator of how healthy the overall economy is. If more people are unemployed that hurts both business and consumer spending. You’re just looking for the general trend here. Has it been improving? Is it getting better faster or slower?
- Metric 4: Home Price Index. We monitor the Case-Shiller Home Price Index since it’s the best gauge for the main measure of the average American’s wealth, their home value. It typically rises during the summer buying season and stays flat during the fall and early winter.
- Metric 5: Consumer Sentiment. This is a measure of the consumer’s opinion on the economy. It encompasses their feelings about their own financial health and the short and long-term growth prospects of the overall economy.
- Metric 6: Business Sentiment. This is a measure of business’ opinion on the economy. It is broken into manufacturers and non-manufacturer segments.
- Those are the core metrics to use to get a direction and a general outlook on the overall economy. Many of them come with forecasts as well so be sure to use those in your analysis as well. They can be found with a quick google search, or at https://www.bea.gov https://fred.stlouisfed.org/ and https://www.bls.gov/
Target Industry Analysis
- So, you now have a solid sense of the overall economy, it’s time to dig deeper into the areas that will really affect your sales team. The first thing to do is to find out more about the various industries you sell into. There are a ton of possible tactics here and we’ve listed the top four we typically use.
- Report Aggregation: If you start searching around the internet, you’ll find several industry reports. This is a great place to start. You can save a lot of time if you come across the right combination of reports with sound research. The challenge here is the amount of noise out there. Try to stay away form the report mills that pump out 1-2 page industry reports. These are often automated and not very useful. When you have a few quality reports, pull their major trends together and begin to develop a thesis for how that industry should grow in the near term.
- 5-forces Analysis: If you’ve gone through any business school at all then you’ve probably heard about this 100 times already. This is a framework developed by Michael Porter from Harvard University and was first published in 1979. Here’s a quick explainer video from Harvard Business Review on the topic. If done correctly, it provides a very solid understanding of an industry.
- SWOT Analysis: This is another framework from the 1960s and 1070s that is still valuable today. It’s an acronym for Strengths, Weaknesses, Opportunities, and Threats. While not as robust as Porter’s 5-Forces model, it can provide an easy to understand overview of an industry. It’s typically used for examining a single company, but it’s easy to adapt it to an industry. Find more information here.
- Industry Surveys: This is typically the best source of information, but it is highly dependent on the data they collect being pertinent to your needs. You can find these in trade journals and in various news outlets. A solid survey tool we’ve used is Typeform, but we like SurveyMonkey as well.
- The vast majority of the information you’ll come across in the industry analysis section will be reports that cover an industry either nationally or globally. That’s nice, but it’s not useful for regional sales teams. We need information that will help them make better decisions. We get that by digging deeper into local data.
- Industry GDP by Metro Area: The sources of the industry data you used in your national economic analysis also give you a breakdown of industry GDP by metropolitan area. Match the metro areas to your sales territories to get a sense of each territory’s industry health.
- Chamber Data. Most larger chambers of commerce have data teams who produce reports on the areas they serve. These reports are often a great starting point to dig deeper into the forces driving a particular area.
- Custom Industry surveys: This is the most time consuming but highest quality option. Creating and implementing targeted industry surveys with exactly what you need to know will give you the best visibility into the inner workings of the companies operating within an industry.
- Internet surveys are the easiest to implement but they provide limited results.
- In-person interviews provide the best information but they’re the most time consuming.
- Phone surveys provide a great balance between the two and they’re the ones we typically use the most.
- Prospect Surveys
- This section differs from the other survey sections due to it’s target. Here, you’re specifically interviewing people who fit your target buyer personas. Keep in mind that this isn’t a lead generation technique. You’re not asking them if they’d buy your product, or really anything about your company. You want to know how their businesses are doing. You want to get a good sense of how your target persona’s firms are trending. What near-term (next twelve months) challenges are they expecting and when.
- If done correctly, this section can yield some of the most powerful insights of the entire process. Try to get some deeper conversations going here about their expectations for the industry, where they see growth coming from, what risks they see, are they bringing on talent for any sizable projects, what their competition is doing, etc.
- Create a Living Market Intelligence Knowledgebase
- The value from this exercise comes in the form of a very good understanding of the landscape for the next three to six months. Anymore, pretty much any industry can change significantly in that time. This is why creating a knowledgebase that is updated regularly is important. If markets shift, and your team is still using old data, it could be worse than not having anything at all. They could, very confidently, be running the completely wrong direction. We typically recommend semi-annual deep dives with monthly checkups to alleviate this. Quick update surveys and report aggregation work well in this regard.
- This knowledge needs to be effectively communicated for it to be valuable. Disseminating it among your sales managers and team members is critical. At Lumo, we use dashboards, coupled with periodic email updates, to keep clients up to date on their market intelligence. There are several dashboard solutions out there if you’d like to implement this yourself. Simply find the one that best fits with your firm’s technical capabilities. Then have an analyst go over the data periodically and provide updates. Be sure this is written in a way that minimizes analysis jargon.
Use This Tool Effectively
Using your new market intelligence knowledgebase successfully only requires a few things. Make sure that you’re:
- Updating it regularly.
- Training the sales team on how to use it.
- Giving access to the entire sales team.
- Communicating the analysis well.
By working market intelligence into your sales planning process, you’re giving your team a tool that acts as a force multiplier. It makes all their other activities more efficient.
Visit Lumo to learn more about how we help clients with full service market intelligence that accelerates growth.
About the Author
Nicholas spent 6+ years as a financial analyst both in the corporate sphere and for a Wall St. firm. He has experience analyzing multiple industries including enterprise software, semiconductors, industrial products, construction, consumer goods, and others. After leaving the Wall St. firm he cofounded an economic research firm, Promethean Research, and in late 2017 launched Lumo, a market monitoring dashboard solution for sales managers, marketing teams, and executives.