The first rule of business, is to stay in business. So undeniably true.
However strong your vision, sense of mission, passion and hard work, your business doesn’t operate in a vacuum. You must plan your strategy, and be prepared to operate and react to circumstances that impact your business.
This means that you need to be aware of any changes in your market, including forces directly or indirectly influencing your prospects and business partners.
Understanding what is going on outside your business is a crucial first step in gaining competitive intelligence. This is because the things that other vendors in your market say, promote, do and sell will contribute greatly to the landscape in which you operate.
Gaining understanding and insight of these forces is a critical component of gathering data and insight on your competitive environment. However, despite all the positive outcomes and the importance of competitive intelligence, the discipline has a less than stellar public image.
Here are four myths that have tarnished the reputation of competitive intelligence:
1. Competitive intelligence is unethicalThe most concerning myth about competitive intelligence describes the process as unscrupulous and underhand. This perception is damaging for businesses that decide not to plan, gather, apply or practice competitive intelligence strategies because they are worried that the practice is somehow unethical. Some even feel that competitive intelligence might reflect badly on their business.
However, the truth is that when competitive intelligence is carried out responsibly, it can help businesses to better understand their market, determine their position in that market, and then maximize their impact and the quality of services provided to their customers.
We support our clients in working to a ‘competitive intelligence code of practice’ that they can follow and share. Establishing a code of practice helps businesses to recognize the importance of implementing competitive intelligence in a responsible and strategic way.
Of course, there may be people that knowingly conduct competitive intelligence in an underhand manner. In the two decades that I’ve worked for businesses at all stages of growth I have seen practices that have helped perpetuate this myth through unprincipled business practices – which leads to the next myth…
2. Competitive intelligence involves lying
There are many misconceptions surrounding competitive intelligence. However, anybody who thinks it includes dumpster diving, lying or accessing information through underhand methods, is actually describing theft, and not responsible competitive intelligence. Adopting any of these behaviors is unethical, inexcusable and a terrible reflection on any company’s values.
As well as being morally wrong, such actions also demonstrate a total lack of strategy, planning and business acumen. There is a broad range of smart, ethical tactics and resources available to any business seeking a firmer understanding of its competitive landscape.
3. Competitive intelligence is only for large businesses
While some vendors do have extensive competitive intelligence budgets, resources or even dedicated departments, gathering competitive information certainly isn’t a practice limited to corporates or larger companies. Neither does it demand huge budgets or access to specialist resources.
Certainly there are subscription services available that provide access to databases of easy-to-read company data (think Hoovers, Dun & Bradstreet, Yahoo! Finance). But in truth, all of the information that you need to start, maintain and apply a competitive intelligence strategy, is already available to you. All you do need is to be considered, to spend time on your research, and then to ensure you are gathering data while developing insights that apply to your business.
It is essential that you are absolutely clear on your own market position and what you offer, otherwise it can become very difficult to assess your position no matter how much time and money you then choose to invest in competitive intelligence. You cannot discern your competitive position if you are not clear on your position to start off with.
There are extensive competitive intelligence resources available to companies of any size, including: competitive keyword analysis and online tools; marketing messages that competitors share through their websites; advertising; press releases; social feeds; company announcements; public stock data including public investor updates and stock performance; trade shows and conferences; and knowing which of these events your competitors are attending, sponsoring or paying to be present at. Online services like BuiltWith share technologies that end users have installed. Industry analyst groups share reports on trends, vendors and product updates.
4. It’s an ad hoc activity
While it is possible to dip in and out of competitive intelligence, systematizing your research and having a clear competitive intelligence methodology is vital if you want to apply knowledge that will grow your business. To achieve competitive intelligence best practice, it is always important to analyze the large volume of data available before developing actionable insights. Formal processes will then help your business to continually capture relevant insight.
An example of good practice might be to set up a process that collates information from existing and new employees who have valuable insight, information or experiences of your competitors. When analyzing competitors that you have lost sales deals to, wouldn’t it be valuable to compile loss reports that detail what happened, assess why you lost and, most importantly, ask lost customers for their feedback? For example, why did they decide to work with another company? What could you have done differently? What can you now change or improve? End-user insight is invaluable in providing information that will help your company succeed in future deals.
One of the most important aspects of competitive intelligence is to not only identify and collect data, but also to have a continuous, structured system in place to analyze and apply competitive data and provide real-world, actionable insights of value to your business and its future growth [hint: this is something we do for clients].
Competitive intelligence is time-consuming. Doing it well takes times and effort. But when you do, you will access unique insights that will guide your business and drive it forward.
If you’re a technology vendor that wants to talk about competitive insights, tools or playbooks and how they can help your team and sales, please drop me an email.