Implementing Market Intelligence: How To Leverage Market Intelligence for Better Data-Driven Decision Making
By Stephen Kraus
Companies are increasingly devoting teams and budgets to build market intelligence solutions. But often they struggle with the next step — implementing market intelligence solutions so that they support data-driven decisions throughout an organization. A recent PwC study of more than 2,100 senior executives around that world found that 61% describe their company’s decision-making as only rarely or somewhat data-driven. Another study of senior executives (primarily from financial service firms) found that 85% aspire to create a data-driven culture, but only 37% have been successful in that effort. The reality is that using market intelligence to drive data-driven decisions throughout the organization remains an aspiration for most, and many decisions are still based on experience and advice and intuition.
The question of course becomes: What is different about truly data-driven organizations? What best practices for implementing market intelligence can be distilled from their success? In our experience, there are three crucial elements…
1. Comprehensive data. In practice, “big data” too often means internal data. Ditto “Business Intelligence.” But internal data alone are increasingly inadequate for making savvy decisions. Competitive benchmarking, for example, is crucial, particularly in growing categories. Grubhub, Doordash and Postmates have growth rates that are impressive in isolation (below), but in the competitive context, it’s clear that Uber Eats is growing even faster off an even bigger base. Growing moderately in a category that’s growing rapidly means falling behind; a surprising number of companies are in this exact situation, but don’t have the market intelligence to realize it.
Nobody doubts the value of competitive data; people just don’t use it because they don’t have it, and they don’t have it simply because it’s hard to get. In the philosophy of science, it’s called the “drunkard’s search”: An inebriated man searches for his keys under a lamppost, even though he dropped them far away, explaining that “the light is much better here.” Competitive intelligence is hard to get, but worth the effort. Competitive intelligence, combined with internal business intelligence, form a comprehensive understanding of the marketplace we call market intelligence. It is a simple but powerful formula: Market Intelligence = Business Intelligence + Competitive Intelligence (MI = BI + CI).
2. Senior management buy-in. Culture starts from the top-down, and internal champions are crucial to disseminating a culture of data-driven decision making. A recent McKinsey study reached a similar conclusion. At organizations that perform highly in the use of data and analytics, the top success factor was “Senior management involvement in data and analytics activities.” At companies performing poorly in the data and analytic space, “securing internal leadership for analytics projects” very nearly tops the list of top challenges.
3. Organizational infusion. Senior management can articulate a vision and set a tone; action happens when market intelligence solutions and analytic capabilities are infused throughout the organization. The McKinsey study supports this conclusion as well. At the high-performing data/analytic organizations, the #2 success factor (behind senior management involvement, cited above) was “designing effective data architecture and technology infrastructure to support analytics activities.” And at the low performing organizations, the top challenge was “designing an appropriate organizational structure to support analytics activities.” Executives at high-performing organizations were roughly twice as likely as those at low-performing ones to report “data are accessible across the organization” and that the organization has “a self-serve analytics capability for business users (to run customizable analytic queries.”
Summing Up: Best Practices for Leveraging Market Intelligence
Today’s most successful companies combine the three success factors outlined above – comprehensive market intelligence data, senior management buy-in, and data infused throughout the organization. The combination allows for a massive improvement in organizational alignment – everyone moves toward a shared strategic vision, and makes complementary tactical decisions, because everyone builds on the same shared quantitative understanding of the marketplace. Senior management uses the market intelligence for the most fundamental business decisions – strategic planning, resource allocation, merger-and-acquisition decisions, etc. And the same market intelligence then informs a range of tactical applications throughout the organization, from SEO and SEM to content development and prospecting. Everything pulls in the same direction. That’s the true hallmark of a data driven organization.