SIC, “Standard Industrial Classification Codes,” are four-digit codes, assigned by the US government, designed to establish the primary purpose of a business intent or production.
The served purpose is an attempt to unify and assist in the collection of data, establish uniformity, and compile statistical data in a standardized way. SIC codes cover all companies and legal business activity.
A History of SIC Codes
In the early 1900s, the economy in the US grew, making it important to standardize. Ultimately, industries no longer were collections of a few companies spread throughout the US. Instead, a growing number of establishments began popping up and operating within sectors of their primary origin of industrial income.
To start, several government agencies throughout the USA gather and analyze data utilizing independently unique reporting systems. The void of standardization typically, left one agency’s analysis useless for other companies or agencies that otherwise benefit from the information. As you can imagine, this process, void of uniformity, eventually created a major analytical problem. During the 1930s, a solution hatched the introduction of the Standard Industrial Classification (SIC) code system, splitting the industrial economy into unique industries. SIC codes gave government agencies and analysts, the ability to classify businesses under specific industrial groups in order to collect and analyze data in a standardized fashion.
The Structure of SIC codes:
SIC has 11 top-level divisions, divided into 83 “major groups”, containing two digits. The major groups are further defined by splitting into 416 more detailed groups, containing three digits. Finally, the group is split into 1005 even more focused groups, illustrating the most granular views of the companies. This remaining group contains four digits in the code.
The various levels appear like this:
Division: 25 - 39
Major group: ex 25 (manufacturing)
Industry level Groups: 252
Industry: 2521
Every level of detail as you go down in the groups, is building on the SIC number it belongs under.
What are some of the ways companies utilize SIC codes?
Identify customers by industry
The ability to sort out companies by industry, dramatically reduces the time and money required to find ideal fit customers for a company. By running a search based on a specific SIC code, a company can develop or augment existing contact lists, with detailed information. Most, if not all, SIC code searches provide a wealth of information about a company. Including, company information, whether private or public, name of company, contacts on file, email address, physical mailing addresses, phone numbers, parent companies, revenue, and so much more.
Reverse engineer customers: seek out similar prospects.
This strategy is particularly brilliant. Many companies, when asked who their ideal customer is and why, are not able to answer this question. Through the use of a reverse SIC code search (searching a company to find demographic and SIC data) companies utilize data to identify characteristics about a company based on region, revenue, size, and industry. This removes many of the dead ends or unnecessary unqualified prospects. Once these characteristics are identified, they are used as search criteria to find other customers fitting the same or similar criteria.
Segment markets by industry for marketing campaigns
Again, when utilizing SIC codes to run searches, it is possible to develop lists to contact potentially valuable prospects. The collected demographic information, combined the contact information, in the b2b environment, targets entire industries through the use of communication channels like email, geo-fencing, retargeting, cold-calling, as well as, many other outbound marketing tactics. The ability to target every company in an industry, by region, state, or nationally, opens a lot of doors for very aggressive marketing tactics.
identify competitors, evaluate them, then target them
SIC codes are not just a tool for sales and marketing. They can also be weaponized against your competition as a strategy. Learn important information about the competition to develop strategies against them. Information such as revenue, branch locations, staff count, and credit worthiness, is data used to learn about the competition. If collected and graphed over extended periods of time, you will see if the company is growing, struggling, or bleeding.
Conduct market research
Market research is an important business practice few companies accurately complete because they don’t have the required data. Much of the necessary required data is found through an industry level SIC search. Export lists of contacts and appended data allow companies to graph detailed representations of the market.
SIC codes are tremendously powerful little codes. They are among five to six other codes opening a world of information for your company. Learning to master them can initially, be a little daunting, though once you do, previously not possible opportunities open for your company. If you have questions about how to access SIC codes, contact Nesbit Marketing:
231-360-0179
Info@nesbitmarketing.com