Posts Tagged ‘Million Dollar Database’

Assessing Your Competitive Edge

August 3, 2010

While the two things no person can ever escape are death and taxes, a business owner has a third thing he/she can’t escape: competition. Keeping a close eye on your competition and assessing your strengths and weaknesses with respect to it should not only be part of your business and marketing plans, but also part of an ongoing process for continuous improvement. Today, we will discuss how you can monitor your competition thoroughly and seamlessly.

Identify Sellers of Products Similar to Yours

Let’s assume you own a children’s toy store. Who else sells toys in your area? The Yellow Pages can give you a listing of many other toy retailers. You might even obtain a list of other toy retailers through local Chambers of Commerce, industry trade associations, and the like. But toys can be purchased in several places outside of toy stores. Depending on the type of toys you sell, you’re also competing with mass merchants like Wal-Mart and Target, department stores, supermarkets, and catalog retailers. You first have to know your product, and who it is aimed at, in order to determine your relevant competition.

Determine the Factors Driving Customer Perception

When buying toys like the ones you’re selling, what do customers look for? What factors influence their decision? Certainly the features of your product; but also the retail price, quality, perceived value, novelty (especially for toys!), convenience, and the customer’s experience at your store, and the store’s location, hours, and credit policy, to name several.

Next, you need to determine how much weight to assign each factor in terms of its importance to the customer. After all, you could have the longest store hours of any toy store in town, but what good is that if store hours is of little importance to your customers?

You can estimate the weight of each factor by interviewing members of your target market, conducting surveys, mystery shopping your competition (to see if there’s a pattern of factors they seem to be emphasizing in their sales pitches), and looking at past customer complaints and inquiries.

Determine the Factors Driving Operational Advantages

Many companies may sell the same product or service, but rarely do they operate the same way. Most businesses have more financial resources, use different marketing tactics, or distribute their products differently than others. Much like customer perception factors, you need to compare these different operational factors between your business and your competitors. You also need to weight these factors.

Collect the Data

Mystery shop your competition. Visit their Web sites. Visit their stores (or have your spouse, children, siblings, or friends do so), and compare their customer service, the quality of their merchandise, etc. Ask casual questions that can elicit clues about the competition. Read up on any news about your competition. Check to see if they are located in Dun & Bradstreet’s Million Dollar Database, or in ReferenceUSA. These sources can provide information about the competition’s sales volume, square footage (sometimes), and employee counts.

Talk to their customers (discreetly, casually, and unstructured, of course!); and if you and your competition sell several of the same toys, suppliers can provide valuable information about your competition. Populate your weighted factors with the data you’re learning about each competitor for each of those factors.

Compare and Contrast

Where are you strong with respect to your competition? Where are you weak? Sometimes, your strongest areas can offset your weakest ones. For example, price may be an important factor in the sale of your toys. Maybe you can’t beat your main competitor on price. But your store might offer easier credit terms, a layaway plan, or better customer service. Perhaps you specialize in getting certain toys on your shelves before the rest of the toy stores in town do. Your strengths are your selling points.

Never Stop Watching Your Competition or Your Industry

Now that you know where you stack up against your competition, you must keep checking it regularly. Business is dynamic and nothing stays the same. Set a time frame to re-evaluating your business with respect to the competition. Will you do it monthly? Quarterly? Annually? It depends on the nature of your industry. The frequency you choose is generally not as important as the consistency in which you do your evaluations. Also, keep monitoring changes in your industry. New regulations on the sale of toys, shortages in manufacturing supplies, and tariffs on imported toys can easily and drastically alter your competitive position.

In summary, assessing your competition is not something you do just one time for your business plan; you need to monitor your competition on a consistent basis. Consistent competitive intelligence keeps your business nimble, gives you ideas for improvement, keeps you abreast of changes in your industry, and most of all, keeps you focused on your customers.

Analysights Can Make Competitor Intelligence a Snap!

Monitoring you competition – whether it’s for your business plan – or for ongoing purposes can be a daunting task. If you need to better understand your competition but have no idea where to begin, or if you need to set up a system for ongoing competitor intelligence, call Analysights. We can help you design a competitor monitoring system that is both thorough and easy to maintain. For more information, visit www.analysights.com or call us at (847) 895-2565.

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Doing Market Research for Your Business Plan Need not be Expensive

June 2, 2010

Every business needs to do market research. Whether your company is a Fortune 500 corporation or the neighborhood bar, understanding the market or markets in which you operate is critical to your company’s success. Would you invest money in an oil company that didn’t research the fields where it wanted to drill? Would you buy a house in a neighborhood without checking out the schools, crime rate, or housing market? Would you open a restaurant if you knew nothing about the location, the traffic around it, or the prospective customers? You can be sure that if you wanted to open a business, no banker will loan you money without you having done proper, thorough market research.

When one hears the phrase “market research,” most often he/she thinks about surveys and focus groups. These are the most common, yet often most expensive types of market research. Surveys and focus groups are primary research methods, since they are conducted from scratch. Most market research that small businesses need is secondary, that is, research that has already been conducted, published, and available to the public. Often, secondary research can be found in libraries, online, or through other published sources. Secondary research is also much less expensive – sometimes even free – to obtain; however, sifting through it for information relevant to your business’ needs and analyzing it properly can be very time-consuming. In this post, we will discuss how someone starting a business can do market research without breaking the budget.

First Step: Decide on the Information You Need

Tom Johnson has decided to fulfill his dream of starting a comedy club. He’s purchased a book on writing a business plan, and finds that one section of a typical business plan is “Market Analysis.” Tom realizes he must get this section down pat in order to determine the viability of his business and make projections of his first few years of revenues, and convince a banker to lend him money. Tom needs to ask himself several questions: What type of customers am I catering to? What locations are most convenient for attracting those customers? What are the traffic patterns in those locations? What other comedy clubs and entertainment venues are in the area? What do they charge? How do they promote their businesses? What types of promotions do my target customers respond to? Tom writes down all the questions he can think of that will help him analyze his market.

Census Bureau

The first place Tom turns to is the U.S. Bureau of the Census. The bureau’s Web site, www.census.gov, provides a wealth of info for him. He looks at the Web site for demographics, and plugs in the ZIP codes for the locations he is considering, along with their adjacent ZIP codes. The Web site provides great insights into the number of households in the ZIP code, the age ranges, income levels, racial composition, and other demographic factors. Also from the bureau’s Web site, Tom obtains the latest “Consumer Expenditure Survey,” and finds out what the average family spends on entertainment each year.

Tom then notices that the bureau also does an Economic Census of businesses every five years. He finds the Web page for County Business Patterns and looks to see how many entertainment establishments are within the ZIP codes he is considering. He gets good insights about the number of establishments, their employee size, revenues, and payrolls. Tom also finds other interesting facts from the Economic Census – particularly what percentage of revenues entertainment establishments typically spend on various categories: advertising, salaries, maintenance, etc.

Local Library

Tom realizes the Census Bureau has provided him with data that is summarized and aggregated. He needs more information about specific competitors and business patterns in the areas he is considering. So he visits his local library, which has access to several different databases of small businesses, like Dun & Bradstreet’s Hoover’s, and Million Dollar Database. These databases provide information on several individual establishments, including revenues, owner/officer information, employees, and location. Tom does a search of all entertainment establishments in his locations of interest.

Tom also searches through local newspapers of the past few weeks to see which entertainment venues were advertising, how often they were advertising, what they were offering in their ads, etc. He then goes to the Yellow Pages to see if those prospective competitors advertise there as well.

Chambers of Commerce

Tom then contacts different chambers of commerce around his locations of interest. He finds out when their functions are and attends some of them. The local chambers of commerce are great sources for identifying the similar businesses in his area, meeting their owners directly, and finding other businesses that can be help to Tom in opening his business. For example, Tom could meet the general manager of a local movie theater, and might learn from him that the area seems to be pressed for customers, or is impacted by some local ordinance; Tom might also meet a banker or an attorney who specializes in helping new businesses start. Still, he might meet people from a local corporation who are seeking to do events for employees, of which a comedy club can be a great option. Tom might also find information on the cost of labor in the area, as well as commercial real estate rents in various areas. Chambers of commerce are ideal for networking, news, assistance, prospective customers, and other information.

Getting Out There

Tom has now done a lot of secondary research, an exhaustive amount if you ask me! But there is also some primary research he can – and must – do. Tom should drive the areas near the proposed locations for his comedy club. He should check out the other entertainment places nearby: restaurants, jazz/dance clubs, movie theaters, other comedy clubs, karaoke bars, etc. That is, he should mystery shop. Tom should go into some of these competitors and get a feel for the type of clientele to which they cater, the prices they charge, the quality of service they deliver, and how busy they are. He can also see the décor of these venues, their peak times, the outdoor signage, and the traffic around them. All of these can yield valuable clues about the venue’s degree of competitive threat to Tom’s comedy club, and the viability of the location.

Putting it all Together

While there are countless many more sources Tom can turn to for market research, we see he’s done quite an impressive amount already. While most of his sources were free, or of minimal cost, Tom’s real expense was the time and legwork he put into it; he must now synthesize all this information and analyze it to see which locations provide the best mix of traffic, revenue potential, rental costs, and demographics, and then use that information to create forecasts. Once he’s done that, Tom can write the Market Analysis section.

PlanPro Makes the Market Analysis Section of Your Business Plan a Snap!

Chances are you don’t have the time Tom did to do all of that research. Finding all that secondary information and making heads or tails of it is probably something you’d rather delegate to a professional. With PlanPro, Analysights conducts all the secondary research you need for your business, and provides you with templates for the primary research you need to do. Once all the research is compiled, we will analyze it and provide you with the findings, so that you could write the Market Analysis section of your business plan with ease. All for a flat $495! For an extra $125, we will also write the Market Analysis section for you. This way, you can spend more time on the elements of your business plan that make the best use of your time. To learn more about PlanPro, visit: http://analysights.com/PlanPro.aspx or call Analysights at (847) 895-2565.

When NOT to do Marketing Research

October 2, 2009

Marketing research is an important part of a company’s decision making process.  However, there are times to do marketing research and times not to.  When marketing research keeps you on top of the markets in which your company operates; helps you achieve a strategic marketing advantage; enables you to select the course of action that achieves your key marketing objectives; or clarifies problems or investigates marketplace trends that affect your marketing goals, you should, by all means, conduct it.

However, there are certain times when you should NOT conduct marketing research.  First and foremost, you should not do marketing research if you have not first defined the problem you need to solve.  Problem definition is the single most important step in the marketing research process.  If not done – or done correctly – any research performed will be useless.  Granted, sometimes companies have no idea what the marketing problem is, so they must then do exploratory research, to help them identify the problem.  In that instance, there is a business problem, and that is to determine what is causing the company’s current marketing situation.

You probably also don’t need marketing research if:

You have access to readily available marketing information     

Your sales force may know its territories very well and each sales representative may understand the environment in which he or she calls on.  They may know the price of the competition’s products in those markets, as well as the relevant competitors there, and how much it costs to acquire customers there.  In addition, the Internet has made all kinds of marketing information freely available, and data sources like Dun & Bradstreet’s Million Dollar Database or ABI’s ReferenceUSA  has made finding information about prospective competition and customers a snap.  As a result, secondary research may be all you need to do to find the solutions to your marketing problems.

There’s not enough time or resources to conduct marketing research

If time is an issue, conducting elaborate marketing research will do no good.  Sometimes a situation arises where a decision must be made quickly.  In such a case, you might be better off convening the company’s business experts for an urgent discussion of the situation, alternative courses of action, and the selection of the course to take.  In other instances, you may lack the financial resources, or the internal staff for proper marketing research.  In these cases, you may also rely on the business experts and the secondary research already available to you.

The research adds little or no value

If the decision you want marketing research to help you make has little impact on sales, profit, market share, customer loyalty, brand equity, or any other marketing performance indicator, then it makes no sense to do marketing research.  Marketing research can be costly both in terms of time and money, so if the benefit of the research doesn’t at least pay for itself in the dollars and manpower expended to conduct it, it’s worthless.  You also need to consider the opportunity costs of that research.  If you do research on a problem whose solution adds little value, the time and money could have been better used to research a different problem with a bigger payoff, and that opportunity is lost.

Knowing when you need to do marketing research 

Develop an internal monitoring system of your marketing environment.  If you have a system in place to compile information about your company and your competition, it will alert top management to problems that marketing research can attack.  These days, you can set up e-mail alerts with Google and many major newspapers to keep you informed of any news or blog posts about your company, your competition, and your industry.   Also read your industry’s trade publications and get out to trade shows and conferences.  Talk to your sales force, your suppliers, and your customers.  You can get a wealth of information for free from these sources.

Knowing when not to do marketing research is just as important as knowing when to do it.  When marketing research adds significant value or improves your competitive position, it’s a go; when marketing research is just “nice to know,” it’s a no!   

Small Businesses Can’t Afford to do Marketing Research? They Can’t Afford NOT To!

September 21, 2009

How many of us would go on a road trip without first determining the optimal route to our destination?  Or locating the lodging facilities, restaurants, and service stations along the way?  Yet, why is it that when it comes to running our business, many of us don’t take the time to research the route to our business’ success?

Marketing research is a key component in developing effective marketing and business plans.  Marketing research helps us understand who our customers are, what their needs and wants are, and how they perceive our companies and our products vis a vis our compeition; marketing research also helps us ascertain how viable the market is for our products and services, the degree of competition, and the trends within our industry; and marketing research helps us establish goals and choose courses of action.

Yet many small business avoid doing any marketing research because they perceive it to be very costly.  However marketing research exists in several forms, many low cost or even free.  There are two types of marketing research data: primary and secondary.  Primary research is information you collect directly from the customer through surveys or focus groups.  Secondary research is information that has been collected and published by various organizations such as government agencies, trade publications and associations, and chambers of commerce, for various purposes.   Secondary research tends to be the least costly of the two, so it will account for the vast majority of market research a small business conducts, and most often will be all it needs.

Doing Marketing Research on a Shoestring

How can a business do marketing research on a low budget?  There are lots of great secondary research sources available, often for the nominal cost of a trip to your local library or an Internet search.  One of the best sources of marketing research data is the U.S. Census.  The Census Bureau provides demographics and population estimates, as well as social, political, and economic data.  The Census Bureau also conducts an Economic Census every five years to measure industrial activity.  The Economic Census breaks statistics down by industry and region, enabling you to size up your competition.  You can find out how many firms are in your territory, how big they are, what their revenues are, etc.  You can even find out how much of the industry’s sales are controlled by the top companies.

Besides the Census Bureau, you can find inexpensive data from your chamber of commerce, your trade associations, your vendors, and even your customers.  Check out the Encyclopedia of Associations, by Gale Research, at your library.  This source can help you identify associations relevant to your industry, as well as associations your customers might be members of.

Your public library will also have sources like The Thomas Register of American Manufacturers and the Harris InfoSource All-Industries and Manufacturing Directories, which can help you target businesses in a certain industry, learn more about competitors, and find companies to manufacture your products.

If you’re looking for company-specific information, your library may have an online subscription to Hoover’s, which is owned by Dun and Bradstreet.  In fact, D&B also furnishes its Million Dollar Database, which provides addresses, key officers, sales, and number of employees for almost 2 million U.S. and Canadian organizations, both publicly traded and privately owned.

Secondary information can also be obtained from colleges and universities, community organizations, and other government agencies.

And this list is far from comprehensive.

Given all the secondary information at our fingertips, the question is no longer whether small businesses can afford to do marketing research, but whether they can afford not to.