How To Calculate the ROI of Market Intelligence

To remain competitive, businesses must continuously gather and analyze data about their industry, their target market, and the larger business landscape. This process is known as market intelligence. By understanding the trends and dynamics at play in their industry, businesses can make informed decisions about where to allocate their resources. market intelligence can be used to inform everything from product development and pricing strategy to sales and marketing efforts. In a rapidly changing business environment, market intelligence is an essential tool for businesses that want to stay ahead of the competition.

That said, calculating the ROI of market intelligence is difficult because many of the benefits of true market intelligence fall into the soft ROI category such as time savings and tool consolidation. After all, how can you quantify the value of better decision making?

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The business world has long been hurtling toward a new interconnected, rapidly paced normal — even before 2020 and the onset of a pandemic that upended the world. Since then, disruption has taken on new meaning and companies across industries have operated under unimaginable levels of market uncertainty, with what feels like no real end in sight.

Economic volatility has continued through 2022. The Charles Schwab Institute for Financial Research assessed the U.S. mid-year markets as “under pressure.” The International Monetary Fund (IMF) described the world’s current economy as “gloomy and more uncertain.” In a recent EY study, nearly half of CEOs reported that the pandemic has impacted their industry permanently, meaning many of the new challenges they’re facing are here to stay. Further, 46% more private than public respondents report that the pandemic accelerated existing trends in their industry.

This level of volatility and unpredictability has challenged the ways in which business professionals are making decisions. Companies need a way to stay smarter, more agile, and continuously informed about their industries and the business world at large. Modern market intelligence (MI) is the key to powering these capabilities.

Market intelligence platforms that use AI to surface information increase the speed to insight so leaders can make confident, market-driven decisions. It’s no longer a nice-to-have tool or an optional added cost to the tech stack — it’s a necessary investment in your company’s future.

The Cost of Poor Business Decisions in Today’s Market

The cost of poor business decisions is critically high across every industry and sector. The ability to make the right financial and/or mission-critical decision is often the difference between long-term success or irreversible consequences — think lost customers, a tarnished reputation, and missed financial opportunities.

Recent Gartner research illustrates a perfect storm of factors that demonstrate the challenges of making the right business decisions in today’s economic climate. As the volume of high-impact decisions has grown, consideration for their larger implications has diminished. Bad financial decisions cost firms up to 3% of profits. Adding salt to the wound, poor data quality plays a heavy role in the problem, costing organizations an average $12.9 million every year.

At the same time, the majority of decisions (65%) that need to be made are more complex than they were just two years ago.

Even companies who have prioritized market intelligence in the past must reset and rethink their approach. Traditional processes no longer get the job done, and organizations that fail to advance their market intelligence capabilities risk being left uninformed and worse, left behind.

5 Challenges of Traditional Market Intelligence

Challenge 1: Missing critical information

The volume and scope at which data is available today presents a high risk for information overload. Companies have so much data at their disposal that it’s difficult to sort through it all and find what’s important.

To put it into context: a staggering 90% of all existing data has been created in just the past two years, and two zettabytes (that’s 20 zeros) of data is created every single week. The amount of new data produced annually is expected to nearly double by 2025, making it impossible for the human brain to process on its own.

Just a single broker report or earnings transcript can be 20+ pages in length. To put that into further context: it can take hours to read through and extract information from one earnings transcript, let alone multiple. AI-driven market intelligence platforms sort through vast amounts of data in seconds, pinpointing exactly what you need so you can be confident you never miss an important insight.

Challenge 2: Difficulty in calculating ROI of the team

Calculating the ROI of an investment is inherently difficult when its impact on revenue is difficult to quantify. And market intelligence teams often fall into this category. Their work informs strategy, but it doesn’t drive profitability (at least not in obvious ways). As a result, the impact of their work may not be fully realized, even by its beneficiaries.

Modern market intelligence solutions combat this challenge by centralizing data and reporting in one transparent place. Data access can be democratized through a user-friendly interface where stakeholders can witness the value of market intelligence firsthand. Non-monetary ROI metrics like time savings and forecasting accuracy can then be recognized through direct experience. Further, companies can formalize the measurement and reporting of marketing intelligence ROI by identifying key metrics most important to their teams and clients, then track their trajectory after MI is implemented (think sales close rate, research time to completion, M&A deals closed, etc.). The average high-volume corporate sector researcher using the AlphaSense platform, for example, experiences 354% ROI in their first year, based on research hours per person and annual salary costs. Similarly, the average high-volume financial services sector research experiences 734% ROI in their first year. In short, no matter your sector, the ROI using AlphaSense is crystal clear.

Challenge 3: Limited resources and budget

An ad-hoc market intelligence strategy is burdensome to a company’s budget. It may be difficult to gain buy-in and approval for individual initiatives or additional resources.

A market intelligence platform centralizes the financial investment into one tool and creates a level of predictability. Resources no longer need to be procured for individual research projects. The practice of market intelligence itself becomes embedded into your operations and members of your organization have access to the resources they need to participate. As this occurs, your organization can smartly navigate market changes and the unpredictability that has now become standard. This is more important than ever as economic worry becomes more prevalent across global markets. Deloitte reports that as of the start of Q3 2022, almost half (46%) of CFOs expected the North American economy to be in a recession by 2023, and nearly three-quarters (73%) are even more concerned about inflation. A sophisticated market intelligence strategy positions your company as one that stakeholders can depend on for insight and guidance.

Challenge 4: Being late to the party

Traditional market intelligence strategies are reactive by design — they leave companies at risk of being perpetually behind their competitors. Arriving late to an important insight or not recognizing an emerging trend can also lead to impactful consequences like missed investments or lack of preparedness for market events.

With AI-driven insights, your market intelligence becomes predictive so that you stay ahead of the curve rather than stuck following it. In the AlphaSense platform, features like smart alerts, real-time earnings transcription, and trending topics that surface the key themes executives are talking about ensures you are always the first to know about the latest news and updates from industries and companies you care about.

Challenge 5: No easy way to share findings with the team

For market intelligence to make its biggest possible impact, it needs to be shared with stakeholders in a way that’s compelling — and through channels that ensure they pay attention. Further, it needs to be done in a way that’s not manual and time consuming to the team itself.

Market intelligence platforms offer data visualization capabilities that transform your data into meaningful stories. You can also automate much of the process for faster report generation and distribute important findings at a predictable cadence so teams can engage with what you share.

Calculating the ROI of Market Intelligence

Time savings

A market intelligence platform is a powerful force multiplier — a tool that augments your efforts so that you can produce more and more meaningful output in the same amount of working hours. To measure its impact, ask: Are we doing more work per full-time equivalent (FTE) than prior to our investment?

Consider quantifiable output metrics to measure the work you’re doing per FTE, also known as the number of reports generated per time period or length of time to complete research projects. For example, AlphaSense users spend 3X less time on research tasks than those in similar roles not using the platform. You can translate higher output per FTE to direct salary cost savings for common research roles (i.e. intelligence analyst). First, you’re getting more output per employee (without adding to their workload) and second, you can likely take a leaner approach to hiring with a tool in place to handle previously manual work.

Tool consolidation

Maintaining disparate data sources leads to wasted time and overspending. Productivity is lowered thanks to time spent curating and standardizing data. Money is spent inefficiently on news subscription costs, individual broker relationships, expert interviews, and more.

This is a very real, widespread problem in the world of market and investment research. A recent survey of data analysts found that more than a third of their time is “wasted” just trying to access data, and more than half of companies are using 11 or more data sources.

Market intelligence platforms like AlphaSense put everything you need in one place, then streamline the search and extraction processes to exponentially increase productivity potential for your analysts. Time savings aren’t the only benefit. One COO reported that after his company adopted the AlphaSense platform, he was able to eliminate redundant tools and save his firm a staggering 72% on annual research costs. These types of time and cost savings not only accelerate value creation for your clients, but they free up resources for other strategic, mission-critical activities.

Confident decision making

The true value of market intelligence data lies in its ability to drive strategy. No company can afford the opportunity cost of missing key developments in their industry. The data available through the AlphaSense platform goes beyond what you’ll find on any public search engine or even beyond the paywalls of well-known news sources.

In seconds, you can access documents, call transcripts, equity research, a wide range of news and more — data sources that give you a complete and real picture of what’s happening around any company or topic you need to know about. AI adds a layer of sophistication, sorting through thousands of sources to point you to the most critical insights in a matter of seconds.

These benefits matter to top executives and companies around the world. A recent survey of U.S. and U.K. executives found that 92% agree that time to decision is a key success metric but 89% regret making business decisions too slowly.

When you use the AlphaSense platform to access intelligence data, you bridge the gap between desired decision-making capabilities and actual performance, and your leaders are empowered to make strategic decisions with confidence.

What’s the Takeaway?

Nearly every company performs market intelligence research in some form. But traditional methods can no longer keep pace with the interconnectedness, rate of change, and continued uncertainty that defines business today.

In order to succeed financially, stay competitive, and ultimately deliver an exceptional customer experience, companies must do more.

Modern market intelligence platforms like AlphaSense have transformed business capabilities and enhanced decision-making. Companies in every industry are now more empowered and informed than ever before to make strategic business decisions with confidence.

The Market Intelligence ROI Checklist

As you move toward modern market intelligence for your organization, consider the must-haves we covered in the previous sections. Refer to the Market Intelligence Tool checklist below to be sure you choose a tool that delivers maximum ROI for your business:

  • AI-powered intelligent search capabilities

  • Automated alerts, watchlists, and real-time updates

  • Access to exclusive data sources

  • Ability to extract qualitative and quantitative insights

  • Easy options for data export

  • Visualization tools to make data compelling

  • Solid industry reputation and track record

About AlphaSense

AlphaSense is a market intelligence platform used by the world’s leading companies and financial institutions. For more than a decade, our AI-based technology has helped professionals make smarter business decisions by delivering insights from an extensive universe of public and private content—including company filings, event transcripts, news, trade journals, and equity research.

Today, AlphaSense is used by half of the S&P 500 and 70% of the top 50 hedge funds. It’s rated the No. 1 Financial Research Platform & Enterprise Leader in Market Intelligence by G2, and 83% of AlphaSense clients report a return on their investment within 3 months.

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