Frontier -- Talking Heads
Mine Your Own Business
There are plenty of places to find cheap market data--including your own records
"Small businesses have been flying blind," says data demon Jon Brandow. Historically, they have made little use of business intelligence: the demographic mapping, databases, and market research deployed by large corporations. That's all changed, says Brandow, head of economic-development consultancy bizminer.com. Now, there's a wealth of free data on the World Wide Web, lower-cost research from commercial databases, and cheap software that helps small companies analyze their sales--if you know how to use it. Brandow, a former union organizer, spoke recently with Frontier's Dennis Berman. Some edited excerpts:Q: How can a business owner tell good data from bad?
A: There are a number of ingredients to good data: reliability, timeliness, and detail. Government data tends to be reliable, but there is poor detail. Most of it, for instance, does not include one-person sole proprietorships. Then there's timeliness. Right now, 1996 is the latest year for which government data is available. As for reliability, I will not use some private-sector databases compiled before 1995. They're full of errors.Q: How detailed is the data from private databases?
A: In the past, if you were looking to go into frozen desserts, you would have to look in the broad category of frozen-milk desserts. Today, we can break it down to the level of whether you're using popsicle sticks or not.Q: Well, so what? How can you actually use that information?
A: Once you understand larger industry trends--such as sales and employee growth--you can then benchmark your company against competitors. It's also a sheer resources issue. If you're targeting new customers, you could try to reach 100,000 new companies. But it's a tremendous advantage to use databases to identify the 1% most likely to want your products.Q: Who provides this information?
A: For free information, the best spot to visit is the Census Bureau's Web site. It offers an enormous amount of useful government economic data, and you can get down to the county level, analyzing 350 different industries.
Dun & Bradstreet Corp. sells excellent credit-reporting data, which give you some of the best information on individual companies. InfoUSA Inc. also has a nice CD-ROM with as much credit information as D&B. A company called CACI International Inc. puts out very good demographic information that divides the population into 43 different types of consumers.Q: What about costs?
A: In terms of helping target prospects, $1,000 would buy two CD-ROMs with databases of several-million-plus companies of various sizes. If you wanted the companies to do a customized search on, say, 20,000 plumbing companies, depending on the information you wanted, it would cost 10 cents to 35 cents per. On some other databases, it would cost you up to $5, but there, you're getting a mini-credit report.Q: How can you use geographic targeting?
A: With Census Bureau data, you can analyze countywide business patterns, while private databases allow you to penetrate down to the Zip code. Say you want to start a pizza shop in downtown Harrisburg. Databases will tell you how much competition you have in the neighborhood, whether suppliers are in the same neighborhood, and who are your target customers.Q: How can a small business convert the normal data they generate, such as shipping records, into a real analytical advantage?
A: If you can create a database that tracks customers and their characteristics over time, you can use it to target new, similar customers. You'll have to invest time. But once you have the data, you might be surprised to realize that your best customers are, say, companies under 150 employees. That's very valuable.Frontier offers free online databases. Click Online Extras at frontier.businessweek.com.