Why Don't Software Development Companies Use Market Intelligence for Marketing Insights, Sales Support, Competitive Advantage and Strategic Planning?

Why engineers, product developers, and managers need to know what fellow developers are using and how their design outcomes compare

by Jerry Krasner, Ph.D., MBA
Dolores A. Krasner


Profound economic conditions spawn profound opportunities and challenges. As in any economic contest there will be winners, losers and those that can't tell the difference. Market uncertainties challenge vendors and OEMs alike to find new niches, competitive advantages and markets that will remain stable while enjoying growth potential. One would expect, then, that companies vying for a competitive advantage would value and depend upon accurate and comprehensive information that permits them to closely examine their comparative strengths and weaknesses based on detailed information gleaned from what thousands of potential customers use, don't use; like and dislike; and to ascertain what technologies have produced the best design outcomes as well as time-to-market issues.

Strangely, we speak with many companies, blessed with talented and experienced individuals, who spend millions of dollars in marketing and sales promotion - yet haven't a clue as to whether their assumptions reflect the realities of the marketplace. Dolores, who with three and a half years of experience in our field is relatively new to our niche, is constantly amazed that companies routinely waste hundreds of thousands of dollars per year on false starts and missed market opportunities. Conversely, they spend a fraction of their monthly marketing budget on market intelligence which would support company efforts with accurate and relevant information. We are usually told the following:

  • Our success depends on technological innovation and is not driven by markets. (Famous last words of companies we have seen go out of business)
  • We don't have the budget for such information - the folks that control the budget aren't particularly interested in these efforts. (These managers don't have the outside market intelligence that proves the case for investment in their projects)
  • We don't have anyone who has the time to look at competitive markets - we are too busy (Doing what? What could be more important?)
  • We are focusing our efforts on sales lead generation. (These are market laggards. Short sighted with no strategic plan. While they get sales, the markets move away from current products, and then they try to play catch-up. Always on the back side of the wave, never on the crest.)
  • Our products are so special that they sell themselves - so we don't need to understand our marketplace (When they stop selling themselves, these companies are at the cliff.)

This drives Dolores - who comes from decades of educational research and literacy program development - crazy. She wonders how so many highly intelligence and creative people can miss the obvious connection between information and success.

Perhaps this disconnect comes from our experience as engineers. We are educated, trained and given experience in methodological processes - maybe this is the reason that engineers have some difficulty in apprehending marketing principles that are inexact and abstract. Other factors may cloud the concept, for example, they:

  • Aren't familiar with how market intelligence can be used effectively
  • Aren't familiar with or acquainted with new tools for assessing market needs quickly
  • Aren't oriented towards how market intelligence contributes to a company's ROI

So, let's look at Market Intelligence - and how it differs from Market Research - and explore some of the factors that might contribute to this situation.

Perhaps, then, you the reader can help Dolores (and me), with your views as to why companies waste money, miss intended markets, loose competitive advantages - and how we can help them change their perspective.

How Does Market Intelligence Differ from Market Research?

The topic is market intelligence - a term that you might confuse with "market data". Let me explain the difference and why the market intelligence is a very cost effective way to enhance your marketing, development and PR efforts.

Syndicated research provides an overview of the forest, the environs in which your products and services exist. Custom primary research provides a view of your market niche, the part of the forest where your trees grow and compete with other trees for daylight. And audience feedback research provides the knowledge needed for growing and nurturing the roots of your trees so they are healthy, well grounded and seeding new trees.

The real question is what do you do with the information at hand gathered for understanding the forest, trees and roots? Along with the data, you need the tools and expert analysis to turn the data into market intelligence.

You must look at the results and draw correlations and conclusions. You can see the forest, but with the latest research dashboard tools like ExecStats from Wilson Research Group, you can also see the trees and understand the supporting root system. Market Intelligence provides the tools to establish relationships within the data after the survey is conducted - and without pre-conditioned expectations. In short you can on your own compare this section of the forest with other sections, this kind of tree with other trees, these root systems with other root systems, and plant new trees in the most desirable locations.

Your Market Intelligence program not only gives you the results of an extensive, statistically accurate survey of your current and potential customers, but provides the tools that enable you to examine relationships within the data.

  • As a marketer or PR specialist, you can look at your customers and your competitor's customers and find the advantages.
  • As a developer, you can look at the experiences of many hundreds of other developers working on similar projects.
  • As a concerned manager who must fund projects, you can support your budget requests with real world intelligence and make wiser investments.

The number of potential market segmentations is unlimited and can be done without external support. Wherever you are in the world, you can have access to the data 24/7 as long as you can log onto the Internet.

Market Intelligence involves three steps:

  • A comprehensive and statistically accurate survey
  • An initial series of cross-tabs to give you an overview of the survey results
  • And an interactive dashboard that enables you to explore the data set to determine relationships in the data that can be essential to your efforts

It is surprisingly easy to use - and the user can search the data to examine facts that can be used to support sales, enhance design choices and create a basis for strategic planning.

Custom Research Capabilities

It is vital to see the big picture and at the same time be able to find your path through the forest. Market Intelligence and dashboard tools put you on the path and provide a guiding compass. When you come to your own neck of the woods - your own niche, your own products and markets, and competitors fighting for room in your space - systematic focused audience intelligence takes you the next step of knowing everything about your immediate market environment.

The reason we call it "custom research" is that every subscriber is given a unique database which they can access and use. This "market intelligence" capability permits the user to develop high end analysis of correlations within the data to create value for the company.

For example, one can determine the following:

  • Determine comparisons between your competitor's products and yours
  • Determine number of developers per project; number of lines of written code as well as total lines of code; cancellations; designs completed ahead of or behind schedule - and how many months behind schedule; and, comparisons between predesign expectations and final design results
  • One can look at developers' most pressing concerns, what design processes are used and what developers believe are best practice
  • Look at product line deficiencies and needs
  • Look at what developers are planning to use and do
  • Degree of satisfaction of customers with products and tools
  • Find which market messages resonate the most, and keep products aligned with these benefits.

It should be clear that in planning a go-to-market strategy, developing a competitive analysis for sales support (remember that your competitors might have this information as well), or looking for information to support PR efforts, having statistically accurate and current market information at your fingertips is a distinct advantage.

Customers report on the use of these capabilities. It is common to hear them speak about:

  • Resolving marketing versus engineering debates
  • Developing target messaging
  • Convincing the CFO of the need for this system or that process
  • Needing information for everyday decisions
  • Deciding where to place advertising dollars
  • Deciding a new product line

In summary, market intelligence has many levels described herein - one needs to work at all levels of the market intelligence process (the forest, the trees and the roots). The good news is - and Dolores says she knows this to be true - market intelligence comes at a bargain cost. Compare the cost of your own Market Intelligence Program to...

  • The cost of a market misfire
  • Ad campaign with the wrong message
  • Hiring resourceful employees who don't know the subtleties of your market niche
  • Developing and adding features that are of marginal use to your audience

Bottom line: Market Intelligence should be permeating all your decisions regarding your message, your audience, your products, your strategy and your development processes. Moreover it is easy to use, and very cost effective. It affects you ROI directly by making you alert to the financial consequences of choosing the wrong path in the forest.

Adapted from and with permission of Jerry Krasner, Ph.D., MBA and Dolores A. Krasner, August 2009, Embedded Market Forecasters, American Technology International, Inc. www.embeddedforecast.com

Copyright 2009 by American Technology International, Inc, 1257 Worcester Road #500, Framingham, MA 01701. All rights reserved. No part of this paper covered by copyright hereon may be reproduced or copied in any manner whatsoever. Every effort has been made to provide accurate data. To the best of the editor's knowledge, data is reliable and complete, but no warranty is made for this.