Market Information: Needles and Haystacks

Always keep in mind that the point of information gathering is to help develop strategy and tactics. This is never information for information’s sake. It’s about business. Times have changed. What works in business information has changed too.

HaystackAt one time, good business planning meant digging into statistics, buying market research, proving the potential of some given target market by having a market forecast validated by a brand name at the bottom of a table or chart, and defining a source. Valid sources were major market research firms, consulting firms, industry experts, and governments. Estimates were taken as if homework wasn’t completed. It was about finding the needle of information in the haystack.

Today, information is a matter of sifting, sorting, and digesting, figuring out what’s important, and giving it context. If the past was about needles and haystacks, today it’s finding the right needle in a mountain of needles. Are eggs bad for you? There’s data to prove it. Are eggs good for you? There’s data to prove it. One survey of small business owners concludes social media is important to less than a third of them; another survey proves social media is vital to more than two thirds. The difference is how the survey was designed, who was contacted, and how. Hint: The survey conducted over Facebook shows the importance of social media, and the survey conducted by mail proved the opposite.

Don’t get tunnel vision about data and research. Way too often I see people struggling to find information to fit their preconceived notions of what’s needed instead of accommodating what’s available. For example, I dealt with a person who was going crazy trying to divide businesses into categories of annual revenue, which is impossible, instead of just defining categories by numbers of employees, which is easy to find. Take what information is available, if it works and takes you to meaningful business decisions; not what information you thought you wanted.

For example:

  • If you want to divide U.S. businesses into segments according to size, use the numbers of employees data the government offers; don’t insist on some other size factor such as revenues or office space.
  • If you want to divide businesses into size using employee numbers, use the government classifications. The U.S. economic census divides employee numbers into the classifications shown below. It obviously makes no sense to decide to break the sizes into 1-15 and 16-20 when the government already uses a different classification.
  • As you look for market information you’ll often find classifications established by somebody else, before you started looking. Be flexible. Use what’s available.

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