Many businesses use market data to support their planning and forecasting practices. They buy data from data providers, and then qualitatively make assumptions which should enhance their decision making processes. Now, how will you define if you are using the right data and if you are making the right assumptions?
Right… that’s quite an important aspect of using market data. We see a lot of businesses struggle to get the right insights of the data they are buying. This becomes crucial if you are spending a lot of money on data you might be analysing in the wrong way… ending up making the wrong decisions!
That’s why we looked for ways that can help you optimize this process, and make informed decisions, based on the right market data.
Here are a few things that can help you getting started.
1. Understand Your Business
Although this seems very logical, it’s definitely not as straight-forward as you think! To be able to get the right market insights, and to interpret them in the way that it will deliver you with benefits, it is key to have a good understanding of your business and what your business does. Try to find an answer to these type of questions:
- Who are your main customers?
- Who are your preferred customers?
- Which product do you sell, and what does it mean to your customers?
- What are key components of your products?
- In which markets are you active?
- What is your market share?
- Who are your competitors?
- How are you differentiating yourself from the competition?
- Who are your suppliers?
- What markets are your suppliers in?
Answering these questions is first step to get a thorough comprehension of your business. This will help you in finding the right market data.
2. Define Keywords
Alright, so you’ve done your market research, good job! Unfortunately, you’re not there yet. With the elaborated research you’ve done, you will now have to define which data is relevant for you and where you can obtain that data. How to start?
We would recommend you to start making lists with keywords. Deducting keywords from your market research will give you an indication of data relevant to your organization. Let’s illustrate with an example: your company is active in the chemical industry. One of the products you’re producing is a coating that is used in paint for cars. Based on the described your keyword list will probably include:
Let’s zoom in on “Automotive”. So, as you have identified in your market research (if you’ve done it well!), you know that you have customers within the automotive industry. This means that drivers of the automotive market are also important for you as a business, because when the demand for cars increases, the demand for your coating will also increase, and you will probably sell more. This means it is important for you to be aware of how the automotive market is behaving: is the industry experiencing a positive trend, or is the sales of cars slowing down? These insights will help you recognize where your sales for the car coating is going and support future decision making.
Note that this is an exercise where you should involve people from different departments within your company. Consider to involve sales (as they know their customers well), operations (they have useful information on the manufacturing process), marketing (they know e.g. which are typical buyer personas), … in this process, as they all have different points of view.
3. Data Providers
OK. By doing your market research and making relevant lists with key words, you have gained insights and direction to find data providers.
On your mission to find the right data: figure out if you can use open free available market data, or if you need to tap into specialized private data providers? This is an extensive process, which can take up a lot of time, but necessary to obtain those insights which can really make a difference to your business.
Another option is by looking for tools which use predictive analytics, that can automatically find the relevant market data for you. Read more about this in our e-book on leading indicator forecasting here.
How to get the most out of your new advanced insights? Integrate it in your business planning and forecasting process! Use advanced analytics that can help you establish connections between external factors and your business. Use your data in a quantitative way, this way helping steering your business and improving forecast accuracy. See how predictive analytics can help in this article: “Predictive Analytics: 6 Reasons Why You Better Start Today”.
Throughout this article you might have been thinking, why should we care? How can this actually help us? It is not a secret that informed decisions are often better decisions. Creating growth for your company by optimizing market intelligence is an important step in sustaining as a company in a fast paced environment.
Curious for more? Read our white paper on leading indicator forecasting. See how predictive analytics help improve business understanding and sales planning.