According to the latest listing from the Association Management Company, there are more than 1,250 trade associations in the UK; but despite operating across a range of different industries and representing thousands of products and brands, they all have one thing in common: data.
No matter what industry they are representing, trade associations are seen as an authority and source of market data and intelligence, including market sizing and trends. Having access to and understanding this information is vital for members. This is especially the case for those now selling their products directly to consumers where market share data may be hard to come by. Without data and insights, manufacturers and brands are unable to determine what their position in the market is as well as recognise, adapt and respond to latest market trends.
Historically, trade associations may have managed market data in a number of different ways; for some, data is collected via members, while others opt to purchase market statistics or conduct their own research. In certain market sectors, however, data – particularly that of e-POS (Electronic Point of Sale) – may be incomplete or absent. To say this can make things difficult for businesses to understand the marketplaces they operate in – let alone evaluate their market share – would be an understatement. The task may almost seem impossible.
Unfortunately, collecting, collating and sharing data can be a complex task for trade associations. Firstly, members may be reluctant to share their sales data, especially when concerns over confidentiality come into play. Secondly, significant resources are required to manage data collection, dissemination, and to determine market sizing. And then of course there are potential issues of conflicts of interest that some trade associations may face.
While collecting and sharing market data with members may seem like an impossible task, there is a way for trade associations to overcome these challenges; and the answer is data pooling.
Mapping the market
Data pooling is the process of collecting and analysing data via a specialist third party reporting system. Working with a finite number of manufacturers and brands, a typical system allows associations to pool together data from their members in a secure and confidential manner. This enables an association’s members to receive regular, reliable and confidential flows of market information.
And this is what makes data pooling unique. All reports are bespoke to each member and reveal only that member company’s share of the market they are operating in. No single company can see competitor shares. This isn’t just optimised for member confidentiality, but, as a secure platform run independently for a trade association, any conflicts of interest can be mitigated too.
And this isn’t the only benefit data pooling can bring. Current systems can cross-reference import data with sales figures, ensuring data credibility and integrity; some third-party providers may also carry out trade interviews to assist with market estimations. Using a data pooling system also ensures that new products can be tracked, traced and uploaded into the hierarchy of the system, allowing members to effectively map the market they are operating in – with a regular, typically monthly, data flow.
This unique process is particularly useful when integrating new member data into a system. Unlike manual spreadsheet-based data inputting, data pooling via a secure database ensures that commercially sensitive information is kept confidential when a new trade association member is added. This means that while new members receive immediate access to live data – and existing contributors get a better read of the market – details about who they are and their market share is never exposed.
For Paul Hide, CEO of the Association of Manufacturers of Domestic Appliances (AMDEA), being able to offer an essential service such as this is highly valuable to its members. As Hide explained, AMDEA uses a robust monthly reporting system via a specialist data provider that both supports and measures its members market performance – it even forecasts future demand. And because the data is delivered using a third-party provider, AMDEA can ensure the data is accurate, confidential and kept secure.
Honesty is the best policy
With all industries bound by antitrust legislation, ensuring confidentiality of data delivery and management is crucial. In our experience, such assurances can only be delivered by third-party specialists who are capable of managing data systems as a secure, independent service. They should also have expertise deploying market quantification techniques – for example, building an uplift to account for any non-contributing companies.
From our perspective, data pooling specialists are custodians of member information. By entrusting data collection, management, and reporting processes to a third party specialist data pooling provider, trade associations – and their members – can rest assured that data is kept confidential.
The advantages of an independently-run service for trade associations also helps as a selling point for new member recruitment – with the data pooling service positioned as a key membership benefit.
In a world where data is essential for business success, we believe that trade association members should have access to data and reports built on a model of integrity, security and independence. This can help companies navigate complex marketplaces, plan new product launches, and carry out more effective marketing strategies.
About the author: Gary Roethenbaugh is Head of Data Pooling at Prodinity . To find out more visit www.prodinity.com/data-pooling.