Oftentimes, new ideas that have the potential to change the traditional way of doing things are met with skepticism. Sometimes, the skeptics, like those who said, “The internet is just a fad” and “Fooling around with alternating current (AC) is just a waste of time. Nobody will use it, ever,” look like fools. While NAED’s Market Data Program is not to scale with the internet, like other disruptive innovations it has been met with some skepticism.
Historically, companies relied on non-fact-based information such as hunches, rumors, educated guesses and the competition’s press to make decisions. And as important as customer feedback seems, sometimes it’s just emotion-based and completely biased. Yet, companies are still relying on such weak information to make huge decisions about their futures. NAED’s Market Data Program is designed to remedy this problem and help users to make well-informed business decisions.
“We must leverage data to compete effectively,” George Vorwick, president and CEO of United Electric Supply Company Inc., said. “With the growth of low value, nontraditional competitors enabled by the internet seeking to disrupt our business, it is more important now than ever that we know exactly what’s going on in our markets. The Market Data Program is the industry scorecard. The more participants, the greater the collective good.”
All strategic business decisions come down to understanding three things: your customer, your company and the market in which you operate. Knowing your customer is mostly up to you. However, customer trends can be detected from information about the market.
Understanding your company is also up to you, but the Market Data Program can improve your understanding with its requirement for cleansed data. Cleansing data can cost a significant amount of money if you pay an outside vendor to do the cleaning, but it’s included in the cost of joining the Market Data Program.
Knowing the market in which your business operates is one of the most important aspects of running a business, but it’s likely your company has the fewest facts in this area.
The key to deciding whether to use the Market Data Program is understanding the problem it can solve—lack of information (relevant, accurate and specific). To further help electrical distributors realize the program’s strategic business value, it is important to address some of the misconceptions out there.
Will my data be safe and confidential?
Your company’s point-of-sale (POS) data is extremely important to you and your team and deciding to release this data outside of the physical walls of your company is one not to be taken lightly. Therefore, the National Association of Electrical Distributors (NAED) has partnered with D+R International, which has more than 30 years of experience with data security management and producing market tracking and benchmarking tools, to operate the Market Data Program. Only specific D+R International employees will have access to your POS data. NAED will never see your data, and other users will not know you are participating in the program. Rest assured, your data will be safe and your participation is anonymous.
Will NAED use my data for any other product or service?
As a program designed by distributors for distributors, the market data tool reflects the needs and wants of the distributor members. The use of any data for additional programs or resources would require approval from the NAED board and its distributor members, as well as program participants.
Why is NAED’s Market Data Program different from other market benchmark tools?
Your data and the data collected from other electrical distributors makes NAED’s program unique. The partnership with D+R International allows the Market Data Program to collect actual POS data, which means the accuracy of the aggregated market information will far exceed that produced by other tools. The ability to gather the data monthly also means the program is a living, breathing data warehouse, which will allow you to make decision adjustments throughout your fiscal year, not just annually.
Can this program improve my data?
It is understandable that many companies have worked very hard to develop a team of data specialists to analyze data and evaluate performance. However, the flexibility and potential granularity of reporting on products, customers and geographic areas can only enhance their analyses. Your data shows how your company is interacting with the market, but with the Market Data Program you will know how you compare in a specific region, product category or customer segmentation. Also, the Market Data Program has the power of the ship-to-zip feature. You may feel like you have a good estimate of your market share, but your estimate may be off by a lot. The aggregated POS data from participants powers the market estimates. You may discover more or less competition than expected, or a trend your team did not see.
The Market Data Program is a game-changer in that it will provide you with more concrete facts on which to base your strategic decisions and, in most cases, will improve the decisions you make. In retrospect, the causes for disruption in our industry can seem so obvious. However, it is important to remember that the causes of disruption can also activate change for the greater good.