Thursday, September 17, 2009

Seven Reasons Why Your Market Study is Gathering Dust on a Shelf

Contributed by LISC MetroEdge

LISC MetroEdge is a non-profit market analysis firm and one of the leading pioneers in developing urban metrics that demonstrate untapped demand in urban markets. They provide market data coupled with strategic consulting services to non-profit commercial district management entities and public sector clients.

A few years ago, Accenture, a management consulting firm, launched a campaign featuring Tiger Woods. One of the print ads that jumped out at the MetroEdge team was the one that showed Tiger Woods in a moment of deep thought holding a pad of paper. To his right is a vertical line that ‘maps’ his thought process. It simply says 40% Information/60% Interpretation. The analogy to commercial district market analysis was strikingly clear to all of us. So many communities spend significant time gathering market data, but then fail to do what is arguably more important than the data...interpretation and action based on the information in hand. Instead, the studies they undertake sit somewhere on a shelf gathering dust. When someone finally wants to use the information, it needs to be updated because the data has already gone stale!

Most of the time, our work at MetroEdge is with communities that have never engaged in the rigorous process of information-based decision making. Instead, they have pursued ‘gut-based’ decision making that is based more often on whim than fact. Take the community with no grocery store within its boundaries. In community meetings, residents clamor for a grocery store they can walk to. The decision is made that the local community organization will pursue a grocery store operator for a piece of vacant land, all without every asking a critical question - is there enough unmet demand in the market to sustain a grocery store? The end result can sometimes be years of wasted resources, both human and financial, in pursuit of a vision or goal that at the outset was quite difficult, if not impossible to attain.

We try hard to help communities make better decisions, ones that help local community organizations and government agencies avoid the wild-goose chase in pursuit of unattainable outcomes. This process begins with not only helping communities gather good, accurate information about their market, but more importantly, by helping them INTERPRET and then ACT on this information.

In our experience, there are a few ‘market analysis’ pitfalls that communities might try to avoid. So here they are…

Seven reasons why your market analysis is gathering dust on a shelf
  1. Most market analysis is well intentioned, but it stops at the 40% information point. Communities are often left hanging without much guidance when it comes to interpreting data and then making the hard decisions around resource allocation required to to use the information to take appropriate action.
  2. The consultant never visits the market, and therefore the information gathered and presented doesn’t reflect the real qualitative differences in your community. Quantitative data, like census data or other demographic data, notoriously misses the market, especially in urban markets. Without a site visit, a consultant may find it difficult to tell and incorporate the ‘soft’ side of the analysis. For example, are you actively addressing any crime problems with a local beat cop? Are there local merchants who are taking care of their storefronts and helping to coordinate district-wide advertising campaigns? Is there a retailer that, despite the odds, is attracting a larger than expected market share? Is there significant development on the drawing board that will change community dynamics? All these questions will not be answered by data that reflects a snapshot in time – regardless of how fresh the data is.
  3. Lots of data, with little to no interpretation that tells you what it MEANS. Numbers are only one tool in your arsenal. As a smart man named Albert Einstein once said “Not everything that counts can be counted, and not everything that can be counted counts." Sometimes too much information gets in the way of making sure the data gets utilized by players on the ground.
  4. The report drops on the floor with a loud thud. Most people see a pile of paper and think, “I’ll look at that later when I have time”. We saw this problem so much over the years that we have taken a radical new approach to market data – we stopped creating traditional written reports for our clients. Instead, we create a succinct executive summary that helps clients figure out what data is important, and what isn’t. This is something that can easily be distributed and absorbed by most stakeholders. We also provide a powerpoint presentation that presents our findings, analysis and interpretation (including all of the data gathered) in a way that can be used by the client as a communication tool for the purposes of building coalitions and attracting additional stakeholder support. We fully expect our clients to take the presentation, pull it apart and customize for different audiences.
  5. Stakeholders were never engaged in the process, so they got the report at the end and didn’t even read it. Good consensus building can and should be accomplished during the process of gathering market data. Don’t miss the opportunity to do so. At MetroEdge, we insist that our partners identify and engage a ‘stakeholder’ committee to help collect data, hear our findings and provide feedback on what interventions these findings begin to suggest for the group. What we have also found is that in communities where successful commercial revitalization action may require action on a contentious issues, the failure to collaborate means that not everyone is necessarily in agreement of the baseline facts, or worse, they read and interpret those facts differently than their peers and come to different conclusions. Arguments ensue and nothing gets done. What works much more effectively, is to engage your stakeholders in a process by which 1) the stakeholder group first agrees to a set of questions they want answered by the study; 2) the group then selects a consultant they collectively trust who is responsible for producing the market data; 3) the group then listens to the information provided by the consultants; and 4) the group uses this agreed upon baseline information to develop solutions that incorporates the market data obtained and the interests of the stakeholder group.
  6. The analysis is not connected to an on-going planning or visioning process. Someone told you needed a market analysis, and you did it, but now you don’t know what to do with it.
  7. The analysis did not end with a set of concrete interventions that reflected the on-the-ground reality of available resources (both human and financial). Instead, the outcome was a laundry list of implementation items, rather than a set of clearly identified strategies with roles and responsibilities identified. We recently worked in a community where a market study resulted in laundry list of 'to do' items on a 10 page spreadsheet. The list included great ideas, to be sure, but it didn't help the district manager figure out which of those ideas were the MOST IMPORTANT of the bunch. Every concept was treated equally, leaving the manager overwhelmed and with no strategic direction about how to move any of the action items listed and in what order.

A market analysis is like a hammer in a tool box. Like any toolbox, it takes more than a hammer to build a market. And in our opinion, interpreting the data is even more critical than having the data in the first place…

For more information about LISC MetroEdge please contact Jake Cowan at or go to our website at

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