Develop A Market Intelligence System -— Quality Information Yields Quality Decisions
Do you have products sitting in your business waiting for customers to come in to purchase, or do you have customers that come to you wanting to buy your products and services? In today’s price competitive environment, the successful business will be customer driven rather than product driven. They develop their product line and service menu first by testing them in the marketplace and then developing and broadening only as their information or intelligence system applies.
A Market Intelligence System employs various methods of collecting valuable data or information that enables you to forecast the direction of your market. The key is to be sure you are gathering quality information. Truly, the quality of information that you gather will dictate the quality and success of your decisions over time. Businesses do not fail because they don’t have good ideas; they fail because they make poor decisions based on a lack of information. A Market Intelligence System that is tailored to the size of your business helps you fulfill customers’ needs because it identifies their profiles, purchasing habits and motives and their wants and needs.
Primary and Secondary Data
Starting a Market Intelligence System does not need to be difficult or expensive. The most important initial information that you need is primary data and that consists of names and addresses of your customers. Those can be obtained from customer checks or by having the customer fill out an information card and they are given a membership to your “Shoppers Club”. Primary data also includes what is purchased, how much, how often, when and specifically by whom. The source for this data comes right out of your cash register/computer system. Primary data is the basis for your Market Intelligence System.
Secondary data is the next level of information necessary for an effective system and comes from a variety of sources. Sales associates should be talking to each and every customer that comes into your business. Perish the thought that your sales team would merely be asking, “Can I help you?” It is so easy to gather information with open ended questions such as, “Will this be your first purchase or are you seeking to upgrade your current model?” or “Where do you think you will use this product most often?” to “What have you purchased previously and from whom?” Over time the information garnered from these types of questions will be valuable to your decisions regarding future inventories. Advisory boards and focus groups also are critical to providing the information you need.
Identify What You Want to Know
Collecting data is important but knowing what you want from it and how you want to apply it is equally important to a successful Market Intelligence System. You must develop specific objective for the data you are collecting. Ultimately you want to own your customers’ buying cycle. How can you do that if you don’t possess the information that helps you determine buying motives? Are you collecting information based on customer wants and needs? Do you track inbound inquiry calls? When you have a customer call asking about an item that he says he’s not ready to buy yet, but will be soon, is that not critical information? Are you tracking the frequency of purchases and the average dollar amount? Granted, large ticket items are not purchased with the frequency of clothing or groceries, but frequent requests for a particular model or item may very well impact your inventory purchase decisions and influence critical changes in your product lines to serve premium customers. Customers who purchase an item above a certain dollar amount should automatically be given a “Be Back Coupon” and a personal thank you note.
If you are not retrieving information from a database that tracks timing on service for a piece of equipment, how can you tell your customer when to buy a new one? There comes a point when a discerning business owner will tell his customer that the purchase of a new piece of equipment will cost less than the continued service on an older model. That is putting a Market Intelligence System to work for you!
Is your database matching customer profiles with purchases? For example, if you notice that a customer or customers in a particular profile typically buys a certain item, and they start purchasing another item, are you offering that item to other customers with the same profile? It sounds complicated, but there are numerous inexpensive software systems that help. I personally recommend a client management system called ACT! It has a wide range of options that allow you to manage your database, establish callback schedules and maintain customer profiles.
I see too many business owners that think a Market Intelligence System consists merely of weekly cash reports. They can’t tell me what their best day was with a particular item over the last six weeks or what people are asking for when they call on the phone. The outstanding owner will know the answers to those questions because his Market Intelligence System has given him the data. It goes back to the quality of information you are gathering with each transaction or inquiry. The key to a successful Market Intelligence System 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.
About the Author
Thomas Winninger is the founder of WINNINGER Visionscope a Minneapolis based Think Tank. He is author of the best selling books MarketQuake, Price Wars, Full Price and Sell Easy and his just published book BULLSEYE! – What Market Leaders are doing to consistently HIT the BULLSEYE! Thom is one of the most in-demand business speakers in the North America today. For more information about his programs please visit, MarketQuake 2020