Why Haven’t I Been the Target of a Competitive Intelligence Program?

Last month, my wife, kids and I piled into the family suburban. We started from our home in Salt Lake City, pointed the car east and didn’t stop driving until we hit New York City. We’re a road trip family, but I don’t think we’ll need to see I-80 again for a while.

As we traveled, we frequented dozens of hotels, restaurants, tourist traps… I mean, attractions, gas stations and everything else that goes with a long road trip. You really shouldn’t travel 5,000+ miles without stopping to see a lot of places.

Anyway… at the consumer level, my observation overall was that the companies with whom I interacted had no program whatsoever to understand me as a client, let alone gather little bits of competitive intelligence. Maybe they are all making money hand over fist and they don’t see the need, but even with my feeble understanding of the synergy between sales, marketing and competitive intelligence at the consumer level, I saw opportunities for each of these vendors and service providers to pry a little more cash out of my wallet and away from competing establishments.

I’ll provide one quick example: We stayed at many different hotels/motels, often just off of the freeway. After a long day’s drive, we would attack the pack of motels, looking for the right amenities and the best bargain. When I approached the clerk in each motel, the conversation started with availability and quickly turned into a negotiation. If you were watching, you would have thought we were in a middle-eastern bazaar, haggling over the price of a gourd.

Never once did the clerk at the desk ask me where else I was considering. Never once, was I asked what was important to my family. Maybe the guest rooms had a comment card for me to fill out, but it was likely hidden behind some brochure.

To its credit, one of the hotel chains (of whom I am a loyalty program member) sent me a couple of emails after my stay asking about my satisfaction. They ought to ask me about my stay at a couple of the competitors’ establishments also. As a traveler, I’m looking for comfort and a decent price. I’ll tell them what the competition is doing if it will help me get a better stay for my family next time.

Maybe, my next gig will be a consultant to consumer-oriented companies. The dollars and margins may be smaller, but the volume can be huge. It would make my day to be influential in the change of an entire industry with a few simple measures.

Need a CI Consultant to Achieve Business Improvement? Think Primary Intelligence

Yeah. The subject line sounds like a commercial, but that is nearly unavoidable if I want to tell you about specific ways we’re providing high-value services to our clients. Some people over time have seen Primary Intelligence as a solid 3rd-party research group, capable of producing high-quality CI. We love our clients and appreciate their support.

The other group of our clients sees us as a full-service consultancy to effect positive revenue change within their organization. They have grown to appreciate our consultative, hand-on approach at multiple locations within their company. Starting with on-site kickoff meetings, personal consultations with stakeholders to explain and evangelize the endgame and training programs based on world-class competitive intelligence efforts and analytics, our clients are converting information into action plans that produce results. (Man. Even as a marketer, I nearly choked on my hyperbole. But, you have to know about these things. Remember, I’m only telling you these things because you need to know.)

The truth of the matter is that everyone needs some extra help sometime to produce the desired results. We specialize in providing that 3rd-party opinion. Combine our expertise in competitive intelligence with a consultative program that brings strategic changes to life and you have much more than a pretty report that gathers dust on executives' desks.

Deliverables for consulting solutions include:
1. One or two-day onsite workshops
2. Remote maintenance workshops
3. A block of time that can be used to consult with PI’s consultants
4. Identification and assessment of sales opportunities, competitive opportunities and customer opportunities (workshop content)
5. Work sessions on real-world opportunities
6. Mapping sales intelligence and competitive intelligence to sales processes and methodologies
7. Enhancements to current sales processes and methodologies
8. Sales and/or Management plan development
9. Sales plan/Management plan roll-out
10. Sales plan/Management plan monitoring

Customer Benefits
Primary Intelligence’s customers can expect the following benefits from PI’s consulting solutions:
1. Specific improvements to current sales processes and methodologies
2. Greater ROI on current research initiatives
3. Greater adoption of competitive intelligence and sales intelligence initiatives within organization
4. Enhance your organization’s competitive advantages in your target markets
5. Improve sales performance and effectiveness of sales channels
6. Ensure win ratio improvements and enhance revenue growth
7. Greater visibility of key competitive and sales intelligence initiatives

If you need a little extra information on the topic, give me a call. I’m not sales. I can tell it like it is. (801-838-9600 x5050, cdalley@primary-intel.com)

Primary Intelligence Newsletter - Living Inside the Prospect's Head

The newsletter is out again. We would enjoy feedback. If you want to subscribe, simply use the subscription option on the individual article pages (accessed by clicking on each of the links below)

Cover Story
Experts Corner: Living Inside the Prospect's Head
By Glen Remy, Primary Intelligence Inc.
Memo to sales: Company X is strongly in the market for our product. Their current contract with Competitor Y will expire in four months and they are highly likely to evaluate alternate programs. Their biggest unmet needs are integration with current programs, individual configurability... (For more, click here)

BlogCentral
Competitive Intelligence and Too Much Data!
In a recent study by Advertising Age, middle managers aired their opinions about the effectiveness of Competitive Intelligence and identified specific problems that cause intelligence in general to be ignored. (For more, click here)

The A-List Archive
3rd-party Review of Keane's Sale into Alliance Hospital
Originally Published in December 2004.Alliance Hospital, a small, physician-run facility in Odessa, Texas, needed to replace its inadequate information and billing system. Because the hospital was losing revenue, and because it did not have a large IT staff, Alliance sought a solution that would meet its needs while still being quick and easy to implement.(For more, click here)

Secret of Strategy, Competitive Intelligence Style (Part 2 of 2)

Last post, I provided the first in a 2-part series on strategic thinking and preparation. It is my assertion that Competitive Intelligence is too often used for tactical purposes only (sales and marketing) and is not featured in the boardroom for critical decision-making as often as it should be.

While this may not be the case in your company, you should still evaluate how often executives turn to your competitive intelligence programs. Even better, have the executives had a hand in designing the intelligence initiatives? If your executive team has helped create the intelligence programs, odds are good that they are invested in the program. Otherwise, you risk being relegated to the “nice to have” category; at least, from the strategic level.

And, if your company does not use competitive intelligence for strategic decision-making, what can you do to increase the visibility and usefulness of your intelligence initiatives in the boardroom? My first recommendation is to make sure that you personally are thinking strategically. Evaluate your intelligence programs and determine if your current information meets the strategic needs of the company. If your information is too tactical in nature, at best, it will be interesting but worthless at the highest levels.

Without further ado, I’ll let Mr. Lemberg finish his thoughts on Strategic Thinking:

Secret of Strategy - Part 2
Of course you've heard that when you do what you've always done, you'll likely get what you've always got. In this case that means playing the tactical game: coming up with acceptable--or worse--comfortable options and executing them as time permits. Likely, what you'll get is business as usual, and things will be... well, they'll be fine.

But "fine" may not be what you're after, and you are probably reading a series called "How to Create Strategies That Work" so you can do better--perhaps much better...

And if you are willing to take some time and do your homework: the research, inquiry, analysis, synthesis, and the activation of strategy--you can add dramatically more power to each one of your individual tactics, and potentially revolutionize your entire business.

In the beginning of this series I showed you how to start the process of selecting a market-dominating business and marketing strategy.

The first four steps are:
• Set your vision
• Gather environmental and competitive intelligence
• Take stock of your organization's strengths and weaknesses
• Answer the Global Strategy Question

I covered those in The Secrets of Strategy, Part 1. In this article I'm going to cover the next four steps:

• Establish decisive objectives
• Rate and rank your "SWOTs"
• Match your internal and external factors to identify strategic alternatives
• Select the highest-impact strategies for implementation

Establish Decisive Objectives
Strategy is contextual. This means you should not make any kind of strategic decision--choosing strategy A over Strategy B, for instance--without first setting a context with Decisive Objectives.

The word decisive is from the Latin decidere, which means to cut off. Decisive objectives are the goals that cut off irrelevant business opportunities and distracting details. They define the boundaries of your company's efforts and direction, and establish the measures by which you will gauge your success.

This step is to select company-defining goals, the attainment of which will mean your vision has started to become a reality. These objectives or goals should relate to the following:

• In what markets will you do business?
• What market share will you have? Will you be a marginal player with a small percentage, a big player with a significant portion of the market, or will you dominate your market and crush all competition?
• Where will you operate geographically? This question ties back to the issue of market share; you might dominate the market locally but be a small player nationally.
• How much revenue and profit will you earn? Larger revenue goals will have different strategic needs.
• What impact will your business have on your industry, your community, your world?
• How will you exit your business? Will you run the business and eventually pass it on to family members? Will you sell it privately? Will you go public?

These are examples of the kinds of goals which shape your company. The decisive objectives create the context for the strategy alternatives you generate.

Rate and rank your "SWOTs"

Previously, you analyzed your external environment and internal strengths and weaknesses. Now rate and rank the most important factors.

Evaluate each external factor: is it an opportunity to be taken advantage of, a threat to be defended against, or is simply something neutral you can safely ignore? Do the same for your internal factors: are they strengths to capitalize upon, weaknesses which much be bolstered or outsourced, or neutral conditions?

Using your Decisive Objectives as a guide, select amongst the potential opportunities, threats, strengths and weaknesses, those factors you consider critical to the success of your business. (Ignore the neutral factors.)

Group the critical factors into internal and external. Rate each internal factor from .01 to .99 based on its perceived importance to your business. The total should add up to 1.0. Do the same for the external factors.

Select the top five to ten internal factors and external factors for matching.

Match your internal and external factors to identify strategic alternatives

Matching combines each internal factor with an external factor, generating a potentially relevant strategy. A software manufacturer might match an internal strength such as flexibility with an external opportunity of a new law in a related industry, yielding a strategic alternative to reconfigure the software and provide solutions to the new legal requirements.

Or, a duck farmer might match his internal strength of breeding expertise with an external opportunity demanding low-fat, high-protein foods to yield a strategy selling low- fat duck.
Strengths are matched with opportunities to create SO strategies. These are generally your strongest, highest leverage options. Strengths match with threats to create ST strategies. These use your natural assets to minimize external threats to existing revenue streams and your current competitive position. But since the best defense is often a strong offense, you may find yourself reverting to an SO strategy-- typically a better alternative.

WO strategies use external opportunities to reduce the impact of internal weaknesses. Of course, you may simply choose to put your resources into areas of strength and outsource weak factors.

WT strategies are the weakest of all: defensive approaches designed to minimize internal weaknesses or external threats. Sometimes necessary to protect weakening revenue streams, there are often other, more powerful approaches that take better advantage of company strengths.

This process is often called SWOT, named for the four types of internal and external factors. I prefer to call it SOT, since the most powerful options will not pay much attention to weaknesses. In our business philosophy you will gain more ground more quickly by amplifying and exploiting your strengths and outsourcing--or ignoring--the areas in which you are weak.

Select specific strategies for implementation

At this point many people choose to intuitively select which strategies to pursue. Others may prefer to bring rigor to the ranking process. This final step combines your various subjective analyses into a defined framework, giving each strategy a strategic impact score.

Compare your new strategic alternatives to your list of critical factors to find those factors affected by each strategy. For each match, rank the attractiveness of the strategy relative to the factor from 1-4 (1--not attractive, 2--somewhat attractive, 3--reasonably attractive, 4--highly attractive) and multiply it by the factor's rating (.01 - .99). Sum all the scores for that strategy into a total "strategic impact score."

Lastly, select your go-forward strategies based on the highest strategic impact scores.

This is a demanding process with many steps, but it is well worth the effort. The strategies you create will take greatest of advantage of your strengths and opportunities, while protecting your company most effectively against threats and weaknesses. They will provide your company with leverage to make the most of your assets, your competitive position and your markets, all while insuring your strategies are consistent with your company's vision and goals.

Important notice for strategy-minded entrepreneurs:
Strategy creation is a long road to hoe, and goes much more smoothly when you know what questions to ask and in what sequence. To make it easier for you and your senior team, I've created the Growth Strategy Roadmap.

This program of flowcharts, questions, checklists, and detailed processes takes you through the entire progression of evaluating your external and internal environments, and provides all the steps and forms necessary to generate matched options, and rate, rank and select a high-leverage, high-growth strategy.

© Copyright 2004 Quantum Growth Coaching. All Rights Reserved

ABOUT THE AUTHOR:
Paul Lemberg's clients call him "the unreasonable business coach" because he insists they pursue goals and take actions far outside their comfort zone to make more money than they previously thought possible. To get business coaching, tips, tools and strategies like these, visit http://www.paullemberg.com/execoach.html.

Strategic Planning - Making the Most of Competitive Intelligence

The following article is part 1 of a 2 part series written by Paul Lemberg, Executive Director of Stratamax Research Institute

A step-by-step guide to creating a growth strategy based on your current situation and future possibilities.

I’ll bet you think you already have a strategy.

And well you may, but strategy as a concept is just like love: much used and little understood. Many businesses (and that includes small entrepreneurs, large corporations, non-profits, community organizations, governments, NGOs…the works) neither know what strategy really is, nor how to get one.

And even if you do, in fact, have a strategy—is it the right one? The best one? This is so important—marketing guru Jay Abraham says—and I agree—a superior strategy badly executed will beat a bad strategy well executed, any day.

It’s easy to say, “This is big company stuff. We know what we need—why should we do all the extra work.” While a “strategy-less” group of marketing tactics may work well and produce good results, is it taking your business in the best direction? You may be making money, but are you making the most money possible? Could another suite of tactics implementing a superior strategy produce far better results?

Which brings me to the point of this two-part article: how to formulate strategy.In the next 1500 words, I’m going to present the first half of a basic system for identifying high-impact strategies in your business. (Just the first half? Yes. While I strive to make this as simple as possible, it still takes a bit of explaining, and editors and readers alike detest long articles!) So Part 2 will finish the outline, and in future articles, I will discuss each system component in finer detail.

Let’s begin with a working definition of strategy.

Strategy is the guiding principle on which are based a series of interlinked decisions regarding the selection and deployment of resources and tactics, whose purpose is realizing a vision and achieving decisive objectives in a competitive and changing environment.

This definition tells us a few things:

The purpose of all strategic decisions is achieving your vision and “decisive” or critical-to-purpose objectives. Strategy is about selecting specific resources and tactics to get the desired result. Strategy is not static; it is decisions in a series, and evolves continuously over time.

Strategy is broad and all-encompassing. With that in mind, here are the 8 steps to formulating strategy: Set your vision Gather environmental and competitive intelligence Take stock of your organization’s strengths and weaknesses Select your “grand strategy” Establish decisive objectives Rate and rank your “SWOTs” Match your internal and external factors to identify strategic alternatives Select specific strategies for implementation Of course, there is one last step: turning your strategy into tactics and game plans, and execute. We won’t get into that in this article.

Step 1. Establish your vision.
People complicate the idea of vision. A vision is simply a story describing how you want things to be in the future. Some people can tell these stories easily—they know exactly where they want to be and what it will “look” like.

Others need help. The best approach is to answer a series of questions regarding what your organization does, who are it’s clients or beneficiaries, what its impact is, how big it is, where it is, how it operates, when all these things will occur, and so on. As a result of answering these questions, your vision will emerge. (For a detailed article on crafting a vision visit www.paullemberg.com/articles.html.)

Of course, you may already have a vision. If so, now is the time to insure that it is relevant and powerful.

The test of a good vision is if it inspires; not only you and your management team, but all of your stakeholders: your partners, employees, clients, investors, vendors, lenders, your community, your government—and perhaps the public at large. A great vision inspires, and it also provides direction. Every action you take should further your vision. If it doesn’t, don’t do it.

Step 2. Gather environmental and competitive intelligence.

To develop the best strategies you must understand the world outside your organization. Quantify and qualify, not just absolutes, but trends. And importantly—identify changes in the status quo. Key areas for focus include competitors, technology, market size and trends, your clients’ industry health, macroeconomic trends, availability of key resources (people and materials) government regulations and other political considerations, and changes in demographics and psychographics—like customer taste.

Devise relevant measures for each of these key external areas. For instance, examine your competitors for revenue, profit and market share growth (or decline), product and service changes, shifts in marketing and sales strategy, changes in geographic distribution, strategic alliances, and major customer announcements.

Macroeconomic factors include the obvious such as interest and employment rates and trends, production and consumption statistics, along with finer grained-industry issues such as new home buying—which impacts a wide variety of businesses, or defense spending—which impacts a completely different set of sectors.

Step 3. Take stock of your organization’s strengths and weaknesses
Now it is time to shine the light on your organization. Examine each functional area looking for strengths and weaknesses. Identify strengths that will help the company realize its vision, and weaknesses that will impede its goals.

The following is a starter list of focus areas:

Ability to get new prospects (Marketing) Ability to get new clients (Sales) Products and services, both existing and those in R&D. Finance or Money, including cash flow, access to capital, revenues, profits, ROI Leadership, including values and vision alignment, decisive objectives People, including skills inventory, staffing levels, employee loyalty, compensation Other areas to examine include:

Client satisfaction Client services Logistics Competitive positioning Unique Client Proposition Management team Administration

Step 4: Select your Grand Strategies.
This “grand strategy” approach is based upon industry/product revenue growth rates. It is specific to a business unit with one major industry and/or product focus. If your business is more complex, you may repeat the process for each focus sector.

First, consider your industry and product sector growth rate. Is it growing or declining?

Second, consider your competitive strength within that sector. For this analysis Competitive Strength has two components, the size and trend of your market share, and your organization’s
financial strength; specifically either cash flow from operations, or access to capital.

To simplify: strong market share + strong finances = strong competitive position. Either strong market share or strong finances = average competitive position. Neither strong market share nor strong finances = weak competitive position.

This defines a two-by-three matrix of strategic choices from which to select your grand strategy. (Click for illustration. www.paullemberg.com/grand-strategy-matrix.html).

The exact choice you make will be dictated by the specifics of your situation: sector strength and competitive strength, along with your stated vision and purpose. Choose from the list which best describes your business:

Strong sector, strong competitive position.

This means that you are in a growing market, hold a commanding market position, and have cash with which to maneuver. Your strategic choices include:

Market strategy to increase demand and sales for existing products and services, in existing and new markets Marketing strategy to increase market penetration for existing products and services and capture greater share. Enhance or extend existing products and services; add-ons, backends, strategic joint ventures. Gain control over distribution – bring external sales inside. Take sales from distributors. Gain control over suppliers Acquisition, merger, or joint-ventures with competitors Develop strategic partnerships to increase distribution, or gain new products. Develop related products and services for existing customer base – backend strategies.

Strong sector, average competitive position

Here you are in a growing market, but have either a commanding
position, but limited cash—or vice versa. The exact choice available to you depend on your situation. You can:

Seek underserved niches: move into small, defined and profitable markets.
Marketing strategy to increase market penetration for existing products and services and capture greater share.
Enhance or extend existing products and services; add-ons, backends, strategic joint ventures Strategic partnerships – seek products/services for existing customers Exploit assets via joint ventures and host-beneficiary relationships Develop related products and services for existing customer base – backend strategies.
Increased marketing penetration via distributors and 3rd parties
Get more money: raise capital via debt or equity.

Strong sector, weak competitive position

You are in a strong sector, but have relatively small market share, and limited or no cash. Your choices include:

Seek underserved niches: move into small, defined and profitable markets. Marketing strategy to increase market penetration for existing products and services and capture greater share. Strategic partnerships – seek products/services for existing customers Develop products and services for existing customer base – backend strategies. Sell your client base to a competitor or cooperator; or reposition your existing products to appeal to new customer types. Sell the product line and use cash to reposition remaining assets Sell the company Weak sector, strong competitive position

In this case, you dominate a weak market and have cash to exploit your position. You should: Add related products and services for existing customer base – backend strategies. Add un-related products and services for existing customer base – backend strategies. Add new products and services for new customer base Create joint ventures in unrelated markets

Weak sector, average competitive position.

You are in a mediocre position in a weak market. Depending on your exact circumstances, you can retreat, use what’s left of your cash to buy your way out with new products, or try to enroll a strong partner. Choices include:

Reduce costs however you can.
Add related products and services for existing customer base – backend strategies.
Add new products and services for new customer base Seek to dominate the smallest definition of your market using low-cost / no-cost strategies.
Create strategic partnerships and joint ventures Weak sector, weak competitive position

Sorry to say, you are in a bad place. In a word—retreat! You can do this by:
Reduce costs however you can.
Sell product line Sell company If you don’t want to liquidate, seek to expand your marketing using low-cost / no-cost marketing strategies – but this may be a losing proposition.
Also, as above, attempt to create strategic partnerships and joint ventures, but it may be difficult to attract partners to a market with poor fundamentals.

At this point you might say, “…sell the customers? Sell the company? No way. I’m holding on.” That just isn’t a strategic point of view.

Strategy says you can make more money doing something else—so you best start thinking about it.

In general, these choices are listed from most attractive to least. Your organization’s best choices will be based on your particular circumstances.
By now you have formulated a vision, gathered analyzed your external environment and organization, identified relevant strengths, weaknesses, opportunities and threats, and begun to zero in on a grand strategy. That should keep you busy for a while.
In The Secrets of Strategy, Part II, we’ll complete the process.
Remember—you don’t need a strategy. But having one increases your chances of generating the greatest profits from your resources. After all, that is the whole point of strategy.

Paul Lemberg is the executive director or Stratamax Research Institute, a business coaching and consulting firm specializing in helping entrepreneurial companies quickly increase short term profits for sustainable long term growth. Of course, he is available for keynote speeches and workshops and can be reached via http://businessknowledgesource.com/blog/archives/www.lemberg.com

Primary Intelligence Competitive Intelligence Newsletter

The most recent issue is posted below. If you like the information, please forward it to a friend. That would be the biggest compliment of our work.

If you would like to be added to our subscription list, send me an email and I'll make sure you are added for the next edition (cdalley@primary-intel.com)

Cover Story
Expert's Corner - Sponsorship: To Disclose or Not to Disclose, That is the Question
By Ralph Nielsen, Primary Intelligence Inc.
When conducting primary research, one of the hot topics in the competitive intelligence business is whether and when to disclose the sponsorship of the research. The balancing act that has to be considered is whether unbiased information can be accurately produced in a non-biased fashion if sponsorship is divulged vs. skepticism from the respondent when sponsorship is not revealed... (For more, click here)


CSO Insights Needs Your Opinion
CSO Insights' recent survey of over 1,300 companies showed that increasing sales effectiveness was the top objective. CSO Insights is conducting a follow-on study to determine what sales strategies are improving sales effectiveness

If you are a sales leader, please click here to take the survey. If not, please forward this information to your company's sales leaders. A free report download is available to all survey participants.


BlogCentral
Be the Consultant, Not the Waitress
Last night, my family went to dinner to celebrate the birthday of my oldest son. As a family with five children (and two grandmas present), we kept our waitress very busy with requests for drinks, napkins, condiments and the like... (For more, click here)


The A-List Archive
Eagle Investment Systems, SunGard and Advent Software Battle for U.S. Bancorp Fund Services (Originally Published in April 2005)
U.S. Bancorp Fund Services wanted to implement a portfolio accounting solution that would help it manage the complexities of its securities and investment accounting requirements. After researching 10 vendors initially, the Company narrowed its short list to Eagle Investment Systems, SunGard, and Advent Software... (For more, click here)

Increasing ROI from Competitive Intelligence Efforts

If you have a CI program, take a minute to measure the ROI of your efforts. Instead of simply building a large library of information, ask yourself the following questions:

• Top-line Revenue
– Will this intelligence create new revenue opportunities?
– Will we take away sales from the competition?
– Will our existing accounts stay longer and be more profitable?
• Bottom-line
– Can we be more efficient or learn best practices?
– Are there better ways to manage our processes?
• Application
– How easily will we be able to act on these data?

If you are able to identify areas where you are directly increase top or bottom-line revenue, you are one of the rare success stories in competitive intelligence. If you are like the majority, you may want to consider some of the following tips:

• Reactive CI does not constitute a program. Develop an intelligence program that helps sales, marketing and product development informed of the competition's movements in the most strategic areas. Ignore all of the other noise.
• Information becomes “must have” when executives depend on it to move forward. Understand the willingness of your executives to use intelligence to make decisions. Determine which types of intelligence are best received. Don't spend time developing programs that produce data that won't be used.
• Do not assume that “stacks of information” are better than smaller quantities of targeted intelligence. Busy work does not equal effectiveness.
• Determine WHAT to investigate before starting a search. If you don't have a goal in mind, you will end up on wild goose chases. Everything begins to look appealing if you don't know what you're after.

Use these tips to work with your manager and executives to create a program rather than a competitive intelligence library.