SaaS Week

Every company needs market intelligence at some point, and on-demand market intelligence is an idea that makes sense. One company that offers these services is Seattle, Wa.-based QL2 Software. QL2 CEO Glenn Hasen recently joined me to offer some insight about why market intelligence works in the SaaS delivery mode.

What do you think are the benefits of offering market intelligence in on-demand, browser-based delivery mode as compared to previous methods of delivery?

There are three key benefits to market intelligence on demand. First, it's a great way to meet the needs of business users (specifically marketers) by putting information they need to do their jobs at their fingertips, without requiring the company's IT department to be involved.

If market intelligence is delivered as a subscription-based service, the second key benefit is cost; it can be a very reasonable investment, as opposed to a million-plus dollar IT project. Third, market intelligence on demand can deliver analytics and information in a format that marketers are used to seeing, and doesn't waste their time by requiring them to wade through raw data to get at the answers they need.

Do you have statistics on how much time a market intelligence service can save for managers who need to do market research (as compared to not having a consolidated service)?

Here is how companies are justifying the purchase of market intelligence on demand, illustrated by a couple of real-world examples:

1) Better marketing decisions: a large, global airline notes that when their pricing is out of alignment in a single market (for example, New York City to Dallas), it can cost more than $1 million each day in lost business and unfilled seats. Using real-time market intelligence ensures they know WHAT market changes are happening, WHEN they hare happening. Over hundreds of routes flown, each month, the positive economic impact of maintaining competitiveness can be substantial. (Data = millions of dollars saved each month directly realized through the airline's investment in market intelligence services).

2) Cost savings: a large network health-care provider employs 12 pricing analysts to compare its' health-care plans against competitors'. Previously, these analysts spent the majority of their time just accessing the features and details of competitive plans. More recently, this provider began using market intelligence services to automate this process -- including pricing, coverage details, formulary data, and much more -- enabling their analysts to now spend most of their time analyzing data rather than collecting it. (Data = 50 percent FTE reduction, realizing approximately $300,000 in personnel costs, along with faster and higher quality competitive analyses).

What does the interface for something like this tend to look like? Is it fairly easy to learn or is there a steep learning curve?

This can vary based on a number of factors. Ideally it is delivered in the format that customers specify, and best meets their needs. Each customer is different because some want the raw data to import into their existing systems; while others don't want to bother with the data and just want the analysis presented in the form of a dashboard, charts or graphs that save them time. The best services have highly advanced, yet easy to use analytical and data modeling capabilities.

Any thoughts on whether on demand market intelligence will increase in popularity over 2008 with the forecasts of reduced IT spending that are coming out?

We believe market intelligence as a category has rapid growth ahead of it, because companies are just now starting to see the value it provides. And it's also no secret that just about all industries are getting more competitive, so marketers are spending more money on market intelligence so they can keep up. Unfortunately, traditional market intelligence tools such as syndicated research, tracking studies, scanner data, and so forth -- while still valuable -- can't keep up with the rapid pace of market change like real-time, on demand market intelligence can. At QL2, we're certainly seeing rapid growth in our customer base and revenue.

Here are a few mini-illustrations of the types of challenges that companies face every day, for which market intelligence is well-suited to help overcome:

• Retailers: experiencing increasing pressures around dynamic pricing. For example, how can Sears compete effectively with hardware and apparel pricing and product mixes that change weekly?
• Travel industry: price leaders are entering every market in the airline industry, while hotels need to understand and rapidly react to consumer ratings and commentary on Internet sites and forums like TripAdvisor.com and others.
• Life sciences: fewer "blockbuster" drugs mean there's more market competition and more need to track what competitors are doing to stay ahead.