Industry Data: What It Is and How It Can Help You Find New Customers
Not all businesses are the same. This simple statement isn't especially controversial, yet it's surprisingly powerful. The statement implies that, since not all businesses are the same, they should not be treated as if they are, which provides support for the practice of market segmentation. In a nutshell, market segmentation allows you to concentrate your resources on the potential customers that are the most likely to be interested in your offering. An essential component of most B2B segmentation processes is identifying the organizational characteristics that make your offering more valuable to company A than company B. One of the most powerful and most frequently used forms of organizational characteristics in B2B segmentation is industry.
What is industry data?
Industry is a way of classifying the specific form of economic activity that a business conducts, with their grouping usually being based on the business’ primary product or service. As a rule, a business’ official industry is selected when the business registers with its local government, and their official industry is based on that local authority’s official classification system. However, there are also alternative industry classification systems available, such as the Vainu Custom Industry, that classify companies according to a different set of industries. It follows that industry data is nothing but a description of a company’s specific form of economic activity.
How can industry data help me?
Quite simply, industry data can help you find potential customers. Instead of searching for companies at random and assessing their business activities one by one, you’re able to use industry data to find groups of companies that conduct a similar type of business. This allows you to focus your search efforts and more easily identify promising companies.
For example, the software your business has developed might be especially useful for companies that engage in the production of video content. If that was the case, then it might be that the companies in the industry “Motion picture and video programme production (591110)” were of interest to you. Instead of manually searching for those types of companies at random and hoping for a stroke of luck, you could easily find relevant companies by searching using that industry.
However, official industry classification systems have limitations. Firstly, not all official industries are as precise and descriptive as the example we used earlier, with a great deal of them having names such as "All Other Miscellaneous Manufacturing (339999)", "Software Publishers, Packaged (511210)”, or “Offices of Other Holding Companies (551112)”, making it difficult to know what a company in that industry actually does.
Building on that issue, due to official industry classification systems attempting to fit every possible type of economic activity into a system with predefined categories, it can be difficult to find specific niches among those official industries.
Moreover, there is the fundamental shortcoming that official industries are self-reported. It is up to the company, specifically an individual within the company, to figure out the industry that they are a part of, which introduces human error into the classification system. So, even if you do find a suitable official industry, the companies in it might in reality not belong to that industry.
These shortcomings are the reason why alternatives to official industry classification systems exist. Vainu Custom Industry is our attempt at creating an industry classification system that does not have the same limitations. With precise and descriptive industries and an AI-based categorization system, Vainu Custom Industry was created to make it easier for you to find the types of companies that you’re actually looking for.
Vainu’s industry data
Now that you have a better understanding of what industry data is and how it can help you more easily find potential customers, you might be interested in the industry data that is available. For that reason, we've decided to demonstrate the two types of industry data that Vainu can provide its customers. The first is industry data based on the Standard Industrial Classification (SIC) and other official local government classification systems. The second is industry data based on our proprietary industry classification system, Vainu Custom Industry (VCI).
Standard Industrial Classification (SIC) data
As mentioned earlier, SIC data is usually created when a company is registered in the official business registry of the local country. By accessing those business registries, which in the Nordic countries are publicly available, Vainu is able to collect companies’ official industry data based on their business IDs. As a way of demonstrating our SIC data, we have created visualizations for the five most commonly used SIC codes for the four individual Nordic countries in our database, which can be seen below.
Vainu Custom Industry (VCI) data
VCI data is created when Vainu identifies a company website and is able to connect it to a company in our database. If a company does not have a website or its website is not associated with it, then there is no website content for our algorithms to analyze, which means that Vainu is unable to identify the activities that the company engages in. An important difference between SIC and VCI data is that a company only has one SIC but can have multiple VCIs associated with it. This difference allows you to be much more specific and granular in your investigative efforts when using VCI data compared to SIC data.
While likely to be most valuable when combined with additional search filters, VCI data allows you to establish whether a business sells directly to consumers, B2C, or to other businesses, B2B. As is evident in the visualization, in our database there is a substantially higher number of companies that operate as B2C businesses than B2B businesses. This may in part be due to the fact that B2C businesses are more likely to have a website than their B2B counterparts.
Featured in the visualization below are 6 of the most frequently tagged VCIs across the Nordic countries. As evident from the graph, there are significant differences in the prevalence of certain VCIs across individual countries, such as the largest number of businesses involved in “Health Care” being in Denmark and “Consulting” in Sweden.
Vainu Custom Industry: FinTech
According to our Nordic database, companies associated with the FinTech VCI are spread across over 100 different SICs, which demonstrates the difficulty of effectively targeting such a segment while using an official industry taxonomy.
In our Nordic database, there are 3,633 companies associated with the Vainu Custom Industry “FinTech”. As can be seen in the visualization, Sweden has the largest number of FinTech companies, accounting for nearly one-third of all FinTech companies in our database. This isn’t necessarily surprising considering 35% of the companies in our Nordic database are located in Sweden.
It might be telling to compare the VCI FinTech category with SICs. According to our Nordic database, companies associated with the FinTech VCI are spread across over 100 different SICs, which demonstrates the difficulty of effectively targeting such a segment while using an official industry taxonomy. Nonetheless, there are some SICs that are more popular than others, and, in the visualization below, you can see four of the most common SICs for companies associated with the FinTech VCI.
Your next step
Hopefully, you've learned a little about what industry data is, why it's valuable for B2B companies, and the difference between official industry classification systems and our alternative industry classification system, Vainu Custom Industry.
If the blog has sparked your interest, then please feel free to contact us via our chat or sign up for a free trial to take our data for a test run yourself. Our data experts are always available to help you learn more about industry data and the various ways in which you can gain value from having it at your disposal.