What is competitive intelligence?

Competitive intelligence is the gathering and analysis of information about a company’s direct and indirect competitors. It includes understanding their strengths and weaknesses, as well as their plans and strategies. This information can be used to help a company adapt its own strategy in order to gain a competitive advantage.

Let me remark once again, that it’s a process, not a one-off activity of simply monitoring the competition’s website or newspaper. In fact, big multinational companies dedicate entire teams of people specifically to this – ongoing – activity, and for a reason.

What are the benefits of using competitive intelligence?

Competitive intelligence can help you power up your business strategy in the broader sense, meaning it helps inform how should stay on market. With this notion in mind, I like to talk, more appropriately about “market intelligence”. In fact, while competitive intelligence semantically suggests a focus on your competition, today’s challenging marketing environment, and rapidly evolving economic conditions command a broader understanding of what surrounds your company.

While consistently and systematically analyzing the reality around your company brings obvious benefits, forecasting of actions and predictability of external shifts, it is important we know where to direct our attention. The ever-green Michael Porter’s 5 Forces Framework acted for me as an initial compass to navigate what in fact is a very broad topic: keep it close to you from now on.

Should I sum up the key benefit of competitive intelligence in building up your marketing strategy (see Marketing Strategy for a Small Business. A Complete Overview), that would definitely be a better and deeper understanding of your Competitive Position, which should inform you in building a more compelling marketing mix. This can help you determine which marketing channels are effective and where there might be optimization opportunities. For example, focusing on cost or offering a niche service in a specialized market can make your products more attractive than those of your competitors. Finally, testing whether your products and commercial practices are true core competencies, by analyzing how far they influence customers to buy from you, how difficult they are to imitate, and whether they can be applied to a broad range of potential markets, are invaluable insights you can’t just ignore.

What are the components of competitive intelligence?

Competitive intelligence is a process that takes time to set up, especially the first time. This might sound intimidating, but what I want to stress here is that you and your company should first agree on the importance of having competitive intelligence as a process, with its own accountable people, its own timings, and ultimately its own outcome to reflect in your business. The worst – and apparently is frequent among smaller companies – is to spend time and resources collecting information, presenting them, and never using it to inform business decisions.

The three key stages of a competitive intelligence process can be the following:

– Data collection

– Data analysis

– Data Activation

I’ll dig into each step right in a few lines, please bear with me, but let me add here that the premise of any competitive intelligence process is that you correctly identify your own context: direct and indirect competitors, distributors, government policies, etc…” know who to look after!”

This involves looking for patterns and trends in your competitor’s behavior. After you have analyzed the data, you need to report your findings to decision-makers within your company. Finally, you need to make decisions based on what you have learned. These decisions could involve changes to your marketing strategy or product development plans.

Competitive intelligence phase 1: Data Collection

Data collection is the first step in CI. While in the past gathering information from non-public companies was very difficult and sometimes practices that today we won’t consider compliant, the digital era has opened up opportunities before unimaginable. At the same time, it now became crucial to “de-clutter” information that is informative, but less likely to be relevant.

A method to make sure you collect relevant information only is to classify them a priori: i.e New Product Launches, Price changes, Promo offers, M&A, New C-Level appointments, etc…This ensures you stay focused.

The challenge in gathering competitive intelligence is understanding what external data to track, how to source internal knowledge, and ultimately, understanding what intel actually matters to move the business forward. Don’t worry to learn over time, what’s important is to start and keep going focused.

Building those steps of competitive intelligence gathering into a repeatable process will make the analysis and distribution parts of your competitive program far easier.

Let’s see a bit more in detail some of the sources of information available today and how they can contribute to gathering competitive information.

PR & News

Being aware of what news outlets are writing about your competitor can help you understand their successes. Make sure you are selecting the right sources though, such as industry news platforms, and associations. Additionally, keeping tabs on what events (webinars, conferences, etc..) your competitor is involved in can help you differentiate and learn. A little tip: use a news aggregator to receive notifications

eTailers and Salesforce

Those two sources of information are particularly helpful to uncover commercial practices such as discounts, promotions, Trade offers, and programs.

In Salesforce-driven businesses, Sales Reps naturally receive often times spontaneous information from the Trade and use them on the spot to make their counter offer….it’s how Sales has always been. Surprisingly enough though, most companies never account for Sales Reps to report on their findings, remaining blind to (free) competitive intelligence. What if you would prepare a simple competitive intelligence tool for them to systematically report that information? You can go from a banal word document to a custom field in your CRM.

Moving on online, the explosion of e-commerce platforms suddenly exposes company pricing (at least in B2C) to almost free tracking of their pricing. Tracking multiple products across several online stores would be inefficient and would require a competitive intelligence analyst, but that’s where technology comes in handy. Competitive Intelligence Tools like Keepa just do that: tracking pricing of the products you want, for the time you want.

Customers & Reviews

These are excellent ways to learn more about what customers care about in your industry. Common keywords that appear in bad, good, and average reviews can be found by pooling together the most common words. This will give you insight into what customers are saying about your competitors’ products. Don’t just track e-commerce reviews, look for open review websites too.

Content & Social Media

Additionally, studying the types of content competitor posts can help predict their overall business strategy. Finally, monitoring the social media platforms of your competitors can give you insights into how they are trying to reach and engage their audience.

Personnel & Hiring Practices

If so far I have given you some tips to collect some ex-post intelligence, knowing your competitor’s personnel and hiring practices can provide insight into where they are focused currently and where they will be heading in the future. For example, if a company is going through a lot of executive turnovers, it might be a sign that they are struggling to find its footing. On the other hand, if there are many job postings for a specific position, it could be because the company is expanding in that area, geographically speaking, and as a business domain.

Promotions & Campaigns

The first tip here is to get your email into your competitors’ CRM. You’ll get access to their newsletter, as well as potential new product launches and early adopters’ offers. The news you’ll collect might not be in time to react, but will definitely help you prepare countermoves for your salesforce and your marketing communications.

The second tip is to spot your competitors’ Ads. Most platforms in fact allow you to click on it and discover why you are seeing it, shedding light on some of their targeting options.

Competitive intelligence phase 2: Data Analysis

The second phase of competitive intelligence is analysis, where you take stock of the data collected in phase 1 (classified as I suggested early on) and try to define patterns of actions your competitors are using.

Rather than being conclusive per see though, this step should output a series of deeper questions, moving you from analyzing what is apparent by market proofs to uncovering strategies that are invisible on the surface. The longer your will collect intelligence and go through analysis, the more you’ll be able to understand your competitors from a business strategy point of view, recognizing direct patterns of actions or how they do respond when facing a threat.

Competitive intelligence phase 3: Activate

The third phase of competitive intelligence is about delivering actionable information to your stakeholders. Even if you’ve distilled down your data, there’s no guarantee that it will be inspiring conversations and actions within your company. In phase 3, it’s time to activate those insights by using tactics to win deals and communicate differentiators, but also possibly to set the foundations for a better informed mid to long-term strategy.

The key to using CI is understanding the why and what it will do for your business.

Final food for thoughts

Activating CI on an irregular basis is dangerous because it increases the risk of missed opportunities and/or overlooked threats. Regular updates allow stakeholders to strategically leverage intel gathered from research and analysis. When activation is random, your stakeholders aren’t expecting it and will react inappropriately. When activation is regular, your stakeholders are expecting it and won’t react inappropriately.

As you have seen there are many ways to collect CI, therefore there’s no lack of supply. Most frequently though you’ll encounter a lack of demand for information from within your company. That’s mostly because in smaller companies the focus is more on the present and on the product rather than on setting up longer terms competitive advantages and structure. When pitching a CI program, you go from being reactive to proactive in your execution.

With the tips outlined in this article, you’ll be able to implement automation to reduce time spent capturing data that could be used as insights to eliminate budget padding and business waste, delight customers and increase retention rates, decrease acquisition costs, and Improve the sales process to close more deals. With a data-driven approach, you’ll be able to show that your company’s success is backed by evidence.

So, don’t get discouraged though cause the moment of truth comes when you are assigned to develop next year’s marketing plan…that’s the official “decision” moment, and getting there with a structured and comprehensive set of information about the external market and its pattern can’t be ignored.