Military Intelligence – A Template for Effective Competitive Intelligence

More than 95% of U.S. based businesses indicate that they have dedicated some amount of resources to the gathering of intelligence. This may include market, sales or competitive intelligence, but the goal is usually the same: be better at business than the next guy.

But, few companies would rate themselves as being very effective with the intelligence. And, the funny thing is the discrepancy of the perception between those that gather the intelligence and those that would use it. Executives usually rate themselves as “somewhat effective” or “very effective” as using intelligence while the intelligence professionals generally rate the executives as “not very effective.” Hmmmm. Why so many axes to grind?

Every organization should examine and reexamine its practices to create a continual improvement process. During this process, I would recommend that each organization take a little time to review other organizations that make intelligence a priority.

Now, it would be difficult to peek into other businesses and discover their secrets. You wouldn’t open your doors to this kind of review. Why would anyone else?

But, you can look at an institution that, overall, leads the world in the gathering, analysis and use of intelligence – The military. In fact, you can make the case that the military has the longest running and most successful intelligence system in history. (We won’t talk about policy makers and their use or misuse of intelligence. That’s another story for another day…

Where else are the stakes higher than on the battlefield? In a situation where lives and equipment are constantly at risk, we can learn some very critical things about how the military values its “competitive intelligence”, from gathering through strategic use.

“Most militaries maintain a military intelligence corps with specialized intelligence units for collecting information in specific ways. Militaries also typically have intelligence staff personnel at each echelon down to battalion level. Intelligence officers and enlisted soldiers assigned to military intelligence may be selected for their analytical abilities or scores on intelligence tests. They usually receive formal training in these disciplines.”

“Critical vulnerabilities are…indexed in a way that makes them easily available to advisors and line intelligence personnel who package this information for policy-makers and war-fighters. Vulnerabilities are usually indexed by the nation and military unit, with a list of possible attack methods.”

“Critical threats are usually maintained in a prioritized file, with important enemy capabilities analyzed on a schedule set by an estimate of the enemy's preparation time. For example, nuclear threats between the USSR and the US were analyzed in real time by continuously on-duty staffs. In contrast, analysis of tank or army deployments are usually triggered by accumulations of fuel and munitions, which are monitored on slower, every-few-days cycles. In some cases, automated analysis is performed in real time on automated data traffic.”

“Packaging threats and vulnerabilities for decision makers is a crucial part of military intelligence. A good intelligence officer will stay very close to the policy-maker or war fighter, to anticipate their information requirements, and tailor the information needed. A good intelligence officer will ask a fairly large number of questions in order to help anticipate needs, perhaps even to the point of annoying the principal. For an important policy-maker, the intelligence officer will have a staff to which research projects can be assigned.”

“Developing a plan of attack is not the responsibility of intelligence, though it helps an analyst to know the capabilities of common types of military units. Generally, policy-makers are presented with a list of threats, and opportunities. They approve some basic action, and then professional military personnel plan the detailed act and carry it out. Once hostilities begin, target selection often moves into the upper end of the military chain of command. Once ready stocks of weapons and fuel are depleted, logistic concerns are often exported to civilian policy-makers.” (http://en.wikipedia.org/wiki/Military_intelligence)

The points that catch my attention are:

1. Intelligence professionals are present at each level of the military
2. They receive formal training in intelligence practices
3. Good intelligence officers stay very close to the policy-maker or war-fighter
4. Good intelligence officers ask lots of questions to make sure that the intelligence program is on the right track and can anticipate the leaders’ needs
5. Good intelligence officers package the intelligence in ways that the users can easily consume while still getting the intended “nutritional value”
6. While competitive intelligence personnel are not responsible for policy, direction or decisions, they should try to understand how these decisions are made. This will provide a deeper context to make future intelligence efforts more valuable.

In the next post, we’ll look at the usual structure of intelligence in today’s business.

And, if you have any thoughts, leave me a comment. I dare you.

Using Data to Make Decisions in Marketing

Marketing. An Art? A Science? An amalgam of both. Historically, marketing has been a craft owned by the creative rather than the methodical. And, it is likely that the creative will never leave. But, technology continues to push the envelope on what can be tracked and measured. Each day, demand increases for marketers that can measure their results.

“There is such tremendous change in the marketplace that marketing techniques that used to work may not work anymore,” says Roland Rust, chairman of the marketing department at the University of Maryland’s Robert H. Smith School of Business at College Park, Md., and author of numerous books on marketing. “Companies are trying a lot of new things and don’t know whether they work. The companies that are getting ahead these days are those that use data to make decisions,”

Prof. Rust adds. Conquering highly profitable markets, or having the right market focus and position, is one of the key building blocks of a high-performance business, says Mr. Merrihue of Accenture. And a high-performance business today demands cost-effective, results-driven marketing” (http://online.wsj.com/ad/accenture/)

The source of this information comes from an advertisement -, but the message, while a touch bombastic, remains the same. Understanding your marketing position and tracking progress against goals has become one of the most important topics in marketing. That is no secret at all. Determining what to measure and how to improve is a large challenge.

I’ll toss out my two cents on how Competitive Intelligence can improve a marketing department’s ability to compete.

If done properly, competitive intelligence should be able to tell you:

Crucial business needs that lead people to consider your product/service/solution

How the competition positions itself against you

The perception of the prospects in regard to your value proposition

The right message at the right time of the evaluation process

Your company’s image compared with that of the competition

What are the most important factors that cause a prospect to use you vs. anyone else.

Competitive Intelligence should feed your marketing department with these types of answers, allowing the most effective messages to be refined. Tracking this information over time will provide the ability to measure improvement and/or keep pace with a changing marketplace.

These ideas are some of the most basic possibilities. If you have other ideas or need suggestions, let’s chat. (cdalley@primary-intel.com, 801-838-9600 x5050)

Making Competitive Intelligence Effective with Cross-functional Teams (Part 2 of 4)

On the topic of making Competitive Intelligence effective, I have observed a number of companies over time that have produced extraordinary results through innovative use of the information. It is my experience that these successful companies do the following:

1. Have a commitment to making decisions with intelligence


2. Create a cross-functional team, including leaders from Sales, Marketing, Product Development, Finance and the Executive Board


3. Determine the most effective routes to generating effective competitive intelligence


4. Involve a 3rd-party to provide guidance (This is not a shameless plug. I’ll explain later)


5. Provide a strong voice to evangelize the competitive intelligence


6. Demand accountability of leaders based on their willingness to consider and implement changes based on the intelligence initiatives

Create a cross-functional team
All too often, research and intelligence is conceived, developed, gathered, ignored and buried in one small corner of one department of a company. The information never gets to see the light of day in areas of the organization that might make very good use of the findings.

In a whitepaper distributed by the Corporate Executive Board (Which I can’t find a link to online anymore. If you would like a copy of the report, email cdalley@primary-intel.com and request the British Telecom case study), one of the most important drivers of success was the fact that British Telecom, the subject of the study) created a Strategic Action Committee comprised of key stakeholders in the company that could work together to act upon the data. Also, a Marketing Strategy and Insight Group, staffed with representatives from Marketing, Product Management, Sales Customer Service, Pricing, Solutions, etc… was responsible for disseminating intelligence to the key internal stakeholders.

Significant strategic business change requires action on the part of most every department in the company. The business change conversation won’t be effective until the every department provides a senior management member to work on this collaborative team.

Determine the most effective routes
The first item of business for the cross-functional team is to decide what needs to be understood. A wish list of intelligence can be created, but eventually, this needs to be pared down to something that can be accomplished and will provide value.

The matrix below may help you categorize your initial intelligence initiatives. Go for the types of intelligence that are easy to generate and that have a high ROI potential, based on the intelligence needs identified by the cross-functional team. (For more thoughts on categorizing ease of gathering intelligence, you may refer to a previous post)




Once you have a group of change agents assembled and an intelligence plan, you are almost ready to move into the field.

In the next posts, I’ll elaborate on the remaining points.

And, if you want to talk, let’s chat. Post a response, call (801-838-9600 x5050) or send an email (cdalley@primary-intel.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)

Competitive Intelligence - Working Data for Sales Teams

Some say that knowledge is power. We at Primary Intelligence believe that the right kind of knowledge is exponentially powerful.

An example of our intelligence and feedback we provide is listed below. In this example, our client is Tenscon, a software solutions provider. Now, we have changed the names to maintain confidentiality, but our customer list includes companies such as Microsoft, Avaya, Symantec and EDS are the kinds that tend to do very good work with us.

The table below shows "Tenscon's" competitive advantage against 4 competitors (Names have been changed to maintain confidentiality, but the results are real).

The results show some competitive advantages in the company and sales, but the product has some significant weaknesses against Sistemic and Howein Partners:

Overall, Tenscon had generally higher performance ratings than the competition, especially in the company and service drivers. However, several ratings for the sales team were lower than those of the competition as a whole, indicating that some improvement in these areas may be needed.

An analysis of the responses from clients yields the following key findings concerning Tenscon’s performance:

-Tenscon was seen as a strong and solid company, but was not generally seen as an innovator. As a senior vice president from Dillent explained, “I don’t think they showed as much innovation in their solution. I think they took a much more conservative approach, a much more introverted approach rather than an innovative approach.” The CIO from ABC Aerolineas echoed this sentiment by saying, “We have some applications that we expected to be technologically advanced, but what they offered us was delayed during the delivery process. By this I mean that some applications were not as innovative as we expected them to be.”

-Some clients were concerned that Tenscon was not offering a unified solution, but rather a set of pre-packaged offerings. For instance, a respondent from ABC Aerolineas said that the initial Tenscon team did “have a real understanding of our model, and they just trying to sell us stand-alone systems. This was the idea. The idea was a cost-effective strategy, and people from Tenscon did not understand our model, our strategy, the market, or our needs. They just about systems and stand-alone processes.” A representative from Flentic Crendall explained, “One of
complexities of [Tenscon] is it is five separate businesses that have been swept into one company. It’s trying get them to work as one company with one approach. don’t think that there was a perfect solution.”

-While a majority (66 percent) of clients believed that Tenscon put the right people in front of them, there were some concerns that decision makers were not involved in the negotiation process. A vice president at JNPD expressed this sentiment, saying, “As some of these things escalate, or we run across impasses, there might be opportunities in the future that if we were
able to talk directly to the true decision makers, then it might expedite the process.” A senior vice president from Fiserv also said, “It took a while to get the right representatives from the healthcare side and from the financial side [of Tenscon] to be on our team.”

-Understanding the clients’ needs and business requirements was a theme throughout the interviews, and an area where respondents believed Tenscon could improve. Tenscon’s ratings in this area were slightly lower than the average for other bidding companies, indicating an area of advantage for Tenscon’s competitors. As the CIO of Coles Meyer explained, “Sometimes I was worried [that they gave] affirmative answers without really understanding what the issues were. At
times I felt they didn’t understand how big and complicated the work was going to be. ‘Let’s make the sale and then afterwards worry about how we are going to deliver it.’ There was a lack of business and delivery knowledge with the up front sales team. With other vendors we don’t experience that.”

If you have any ideas of how to make these data come to life in your organization, drop me a line. (801.838.9600 x5050, cdalley@primary-intel.com)

You Know You Compete on Analytics When…

1. You apply sophisticated information systems and rigorous analysis not only to your core capability but also to a range of functions as varied as marketing and human resources
2. Your senior executive team not only recognizes the importance of analytics capabilities but also makes their development and maintenance a primary focus.
3. You treat fact-based decision making not only as a best practice but also as part of the culture that’s constantly emphasized and communicated by senior executives.
4. You hire not only people with analytics skills but a lot of people with the very best analytics skills-and consider them a key to your success.
5. You not only employ analytics in almost every function and department but also consider it so strategically important that you manage it at the enterprise level.
6. You not only are expert at number crunching but also invent proprietary metrics for use in key business processes.
7. You not only use copious data and in-house analysis but also share them with customers and suppliers.
8. You not only avidly consume data but also seize every opportunity to generate information, creating a “test and learn” culture base on numerous small experiments.
9. You not only have committed to competing on analytics but also have been building your capabilities for several years.
10. You not only emphasize the importance of analytics internally but also make quantitative capabilities part of your company’s story, to be shared in the annual report and in discussions with financial analysts.
    (Davenport, Thomas H. (2006), “Competing on Analytics”, Harvard Business Review, page 9)

Using analytics in your competitive intelligence is a natural evolution, but also requires that the company evolve with you. Executive management has to respect the data, the findings and recommendations. Without this level of buy-in, you'll have analytics with no audience. And, if a predictive model falls in the woods...

If your company is ready to introduce analytics to your competitive intelligence or if you want to take your program higher than it has gone in the past, let's chat. (cdalley@primary-intel.com, 801-838-9600 x5050)

SellingPower Gets It, Too

I was very pleased today to see that SellingPower (the leading source of sales management information) gave Primary Intelligence top billing in its Sales Management Newsletter (Keeping Tabs On the Competition). Heather Baldwin, Contributing Editor, attended our webinar in April and provided a very thorough summary of our philosophy to create impactful competitive intelligence from your most productive information channels; your clients.

Our new website homepage attempts to drive the same message home. In the diagram just below the header, Primary Intelligence attempts to demonstrate all of the areas where sales intelligence can be a) generated and b) put to use to create additional competitive advantage. Of course, we have an intelligence product for each step. If you want to find out more, please visit. Let me know how you like the visual representation.

Most importantly, I still think that most companies can increase their Competitive Intelligence quantity and quality by focusing on the reasons why people buy from their company and the competitors. This intelligence should be gathered after the first sale and also, after each additional renewal, upgrade, additional sale or lost sale in any of those events.

Specifically, take a look at your customer sat, account loyalty, win/loss and other client-studies. What would happen if you added a question or two? For example:

- Which other vendors provide services like ours?
- What are some of their key selling points?
- Where do you feel that we are superior to [vendors]
- What have innovations have [vendors] included that we should think about?

Of course, you have to assess your current study, client base and other factors. You don’t want to start your clients thinking too hard about your competitors. But, don’t think for a minute that even your most loyal clients don’t know anything about your competitors. And, if they’re loyal to you, they’ll most likely share information with you, too.

Let me know what you’re thinking about this stuff. (cdalley@primary-intel.com, 801-838-9600 x5050)

Competitive Intelligence before the Competition Arrives

Have you ever seen a grateful sales rep or account manager? Of course, they all smile if you buy something. They can't help it. It's just their nature.

But, what about sales teams from your own company? What can you give them that would put a smile on their face and a bounce in their step? Well, they'll appreciate anything you can do to help them sell more effectively. Give them a sale and you'll have a best friend for life. They might even take you to lunch, but don't count on it.

Unfortunately, you may not be on the front lines. You might not have a rolodex of potential clients. You may be busy with a ton of other stuff. And, if you really wanted to sell, you would have joined the sales or account management teams long ago.

(What to do, what to do, what to do…)

You might consider a Target Prospecting profile from Primary Intelligence. This new intelligence service, introduced this month, has the potential to increase your sales team’s effectiveness exponentially by providing a road map to a sale.

With Primary Intelligence’s Target Prospecting, our clients now have the information they need to understand the opportunity as they enter it, and can address prospects’ unique needs. Specifically, from the prospect interview profiles, our clients learn:

What features/functions are most important in the minds of their prospects

When their prospects will be looking to buy

The nuances of their prospects’ decision making processes

Which competitors their prospects have used, and which ones they are considering

The factors that might lead their prospects to change vendors

The products and services their prospects are looking to implement

Think of the benefits of being able to talk to the client about their needs in their language and understanding most of the necessary maneuvers before the first prospecting contact is made.

This isn’t lead generation. This is Prospect Needs Identification and the ROI has proven to be huge for our clients.

With this information, provided to your company only, your sales reps and account managers will know the lay of the land before the competition decides to engage. How surprised will the competition be when they arrive at the prospect’s doorstep, only to find that your company has set up camp in the living room? While they’re still trying to figure out who to talk to, you’ll be speaking the prospect’s language.

In the words of my 13 year old daughter, “It’s like, so totally rad.”

For more information, or a sample report, check out our website or give me a call. I’ll be happy to answer any questions. (cdalley@primary-intel.com, 801-838-9600 x5050)

What's in a Win?

Yesterday, I was working with Chad Sly, reviewing a proof of concept trial with a client that had purchased win loss analysis from Primary Intelligence.

To be more accurate, they purchased loss analysis. In other words, they weren’t interested in measuring won opportunities; only lost deals.

I can understand that. I can respect that. Your instinct tells you that you are going to learn more from your losses than your wins. You might think that you are in a better position to talk to your wins later and find out the story of what happened. These are true statements.

But, I’d like to toss out a couple of reasons that you ought to apply your same, rigorous study of sales opportunities to your wins, too:

1-Knowing why you lose is interesting. Knowing why you win is just as valuable. If you don’t thoroughly understand your winning value proposition, how can you make the necessary changes in the less certain opportunities?

2-Benchmarking of successful data. If you want to make improvement, you have to understand where you are starting. Get a benchmark of your performance across the board (and not just in losses) or you will have a skewed benchmark that doesn’t really reflect current performance. (BTW, Primary Intelligence believes that measurements in 20-30 individual performance areas make the best sales
reviews)

3-Interpretation of comparative data. If you see that your sales team is weak in certain skills during losses, how will you know if they were strong in those same areas during wins? Or, did they win despite the an across-the-board weakness? You’ll never know unless you discover their performance in both wins and losses.

4-Goodwill with your new customers. Your new clients worked very hard to make the best decision for their company. They appreciate the opportunity to tell you
what went right or wrong and how you can be more effective in like situations.

5-Competitive intelligence from a friendly source. Your new clients are the most likely to provide you with the best actionable competitive intelligence, based on the tactics and messages presented during the recent transaction. You shared time with your competitors. Find out what your prospect/new customer found out during
that time.

I understand that losses look more important. I understand that having the inside scoop on a recent loss is nearly a status symbol. But, don’t forget the wins. They’re what keep you in business.

Let me know what you think. (cdalley@primary-intel.com, 801.838.9600 x5050)

Marrying Competitive Intelligence, Business Intelligence and Analytics

Business intelligence companies are starting to how they are relevant to the gathering of competitive intelligence in the organization. Surprisingly, they are demonstrating how to leverage your customers (of all people) to gain the necessary intelligence to compete more effectively.

Jerome Bergerou of AccuraCast says the following:

"In an increasingly competitive world, using your client database smartly, to gain a better understanding of your number one asset – your customers – can make or break the success of your company."

"One of the primary reasons companies do not fully realize the potential competitive advantages they can gain from their own databases is the lack of proper integration of datasets across departments. Even though all the information might reside within the company, it may remain elusive due to a fragmentation of the data across incompatible databases. Regrouping all internal data into a single dataset or a series of interconnected datasets could be the single most useful step a company might take towards providing a solid foundation on which quality business intelligence can be developed."

This article goes on to demonstrate some specific techniques in building a BI repository and system that would be of benefit to most companies. If you are interested in my content, you should probably check them out, too.

I agree whole-heartedly that the quest for competitive intelligence needs to be founded on the most productive sources of information. And, there has to be more to analyzing the data than gut feelings and educated hopes. Analytics are not just important; they are essential to making sense of the information. Otherwise, the intelligence may be skewed by the loudest voice or hidden trends may be ignored.

If you have some ideas on competitive intelligence and analytics, I’d enjoy talking to you (cdalley@primary-intel.com, 801-838-9600 x5050)

Voice of the Customer Should Be Used to Collect Competitive Intelligence

Yesterday, Primary Intelligence hosted a webinar for a great group of people. The purpose of this presentation was to show how current Voice of the Customer (VOC) initiatives can be modified to provide Competitive Intelligence to different departments.

The first step is to review your current touch points with customers at different stages of the relationship. The second is to figure out how to add competitive intelligence questions into those processes.

Of course, if you don’t have those processes in place already, you might consider the cost/benefit of implementing a broader range of VOC “listening programs” (surveys).

You can see below a chart that shows many possible interaction points with your clients. Every single one of these touch points is a potential source of competitive intelligence.

This is a chance to think strategically about your VOC program in relation to CI. You should be asking yourself “During each phase of the relationship, what does my client think or know about my competitors and marketplace?”

And, you would be very surprised by how much your clients actually do know about your competitors. They may have purchased from you, but they have evaluated many other vendors over time.

Over the next few days, we’ll review specific ways to integrate CI questions into different steps.

I would also like to thank everyone that attended the webinar. We had a very interactive group and the questions provided a very rich environment for knowledge exchange.

As a follow-up, we’re hosting a panel discussion on Tuesday, April 24 at 2PM ET (11AM PT). If you are interested in participating in an open discussion, let me know (cdalley@primary-intel.com, 801.838.9600 x5050)

Leave me a comment on the topic. What would you like to know about this topic?

Webinar (Tomorrow) - Competitive Intelligence from your VOC Program

Tomorrow, I will co-host a webinar with Ron Sathoff. The presentation will be made on April 19 at 2 PM ET (11 AM PT). You can register by clicking here. Consider yourself invited.

The fact of the matter is that your customers know nearly as much about the competition as they do about you. They evaluated the competition before selecting you as their vendor. They are regularly courted by the competition and many of your best clients also have purchased from your competitors, either in the past or currently. Take a minute to see if your VOC program is generating competitive intelligence.

Come join us and expand your Voice of the Customer/Competitive Intelligence horizons.

If you miss it, we'll post it to our website later.

Competitive Intelligence in the 21st Century – Moving Past the SWOT with Predictive Analytics

In my last post, I said that a SWOT analysis leaves a strategic decision-maker with a problem. You may be able to identify some competitive weaknesses (compared with a specific competitor or in the marketplace in general), but you don’t have any way of gauging what would happen to your market share if the weaknesses were improved.

And, you can’t tell whether continuing to improve the strengths would provide a bigger competitive benefit to your company’s efforts.

So, if a competitive intelligence professional spends all of their time studying the market and the end results is a list of strengths and weaknesses (with no predictive analytics or direction), how much value does that person provide?

I guess that I should be clear that a SWOT analysis is not useless. There is tactical value in a SWOT. You can figure out what to say today with a SWOT, but you can’t make strategic decisions based on a SWOT. There is still too much guesswork.

So what? Replace the SWOT with Impact-based Competitive Intelligence. For instance, Primary Intelligence does this all the time. To determine competitive strengths and weaknesses, we:

1-Interview recent wins and losses where your company competed head-to-head with specific competitors.
2-Measure your competitive performance in 20-30 specific decision influencers
3-Determine strengths and weaknesses (Not the gap score in the table below. Positive gaps indicate weaknesses. Negative gaps indicate strengths)
4-Use predictive analytics to determine the influencers that, it improved, would result in the greatest increases in market share. (Impact column, explained below)

Impact identifies your expected improvement in market share. For instance, in this example (a real-world example taken from one of our clients), if you were to improve your company’s performance in Product Knowledge by one point (In other words, if you improved the 7.7 rating to an 8.7), you would expect your win rate and market share to increase by the impact score of 5.7% (at the 90% confidence level).

And, Product Knowledge is already a competitive strength. Overall, you outperform the competition by 5% in this area. The key may be to make this competitive advantage more consistent throughout the company.

In other words, there are influencers that would provide 2x, 3x and 4x the results of others if improvement were made in those specific areas. This could result in gains of millions or billions of unexpected dollars, based on some potentially simple improvements in the right areas.

This approach takes a lot of the guesswork out of the equation. No espionage required. And, yet, the company makes the biggest gains in increasing its client base.

Now, this approach does not satisfy all Competitive Intelligence needs, but it sure does take the OPPORTUNITY column of the SWOT table to a completely different level.

I am happy to talk about this approach with you. Let me know what you think about how this would fit your organization. (cdalley@primary-intel.com, 801-838-9600 x5050)

Why the Competitive Intelligence SWOT is Stuck in the 20th Century

A very typical request we receive at Primary Intelligence is for a SWOT analysis. Our clients want to know the strengths, weaknesses, opportunities and threats presented by a competitor or group of competitors in a marketplace.

Of course, this SWOT analysis has a place, but its value is more tactical than strategic. Sales guys should have access to a SWOT, but I don’t know that executives should make decisions based off of this kind of information.

The problem that I see with the SWOT analysis is the fact that a company will know where its current strengths and weaknesses may be, but doesn’t have any insight into the areas of change that will bring about the biggest improvement in win rates, market share and defeating the competition.

Below, you will see an example of a Strength/Weakness evaluation based on data from recent sales opportunities. Half of the data come from new business that was won and the other 50% come from opportunities that were lost to competitors: (click on the image to see a bigger version)

The data are sorted from biggest negative competitive gap (weakness) at the top to the biggest positive competitive gap (strength) at the bottom. The scores are based on a 1-10 scale where 1 is Poor and 10 is excellent.

If you were to make strategic changes in your company based on the data in this table, you would probably look at the weaknesses and evaluate the most effective ways to close the competitive gap.

But, would this make a difference? What would happen if you were to increase your performance in Overall Solution Cost or Understanding Needs by ten percent? (A 10% improvement would mean that you increase your score of 8.1 to 9.1) How much would your win rate increase? Would making improvements in your weaknesses correlate with a stronger competitive preference, or would you be pulling the wrong levers and pouring time and money down the drain?

Traditional intelligence looks at Strengths and Weaknesses
• Should you “fix” weaknesses or accentuate strengths?
• Strength/Weaknesses don’t always correlate with decision making.
• Where is your opportunity to increase win rates and market share?

In my experience, efforts to improve the biggest weaknesses rarely result in an overall improvement in market share and competitive sales wins. In other words, odds are good that most companies are wasting time and money by using SWOTs for strategic planning.

In my next post, I’ll show you a new way to prioritize your strategic plans, based on a more intelligent form of Competitive Intelligence and performance evaluation.

If you need more info on this topic, let me know (cdalley@primary-intel.com, 801.838.9600 x5050)

And, don't forget to register for my webinar on Thursday. Click here to register (all of the info is on the registration page).

Producing ROI from your Competitive Intelligence - "How To:

If you have every spent any time talking with me about Competitive Intelligence, you know that I am a big proponent of intelligence programs that produce revenue. So many companies launch an intelligence program with the intention of "understanding the competitive landscape" but, this is hardly a focused goal.

Over time, the intelligence program expands (bloats) to include as many intelligence categories as possible. Soon, the company hires a "librarian" and implements content management systems just to keep all of the information organized. Corporate personnel are happy because they can ask just about any question and get an answer. CI personnel are happy because they have a job that keeps them busy and security for the future.

But, my argument has always centered on, "Why do the work if you can't justify the ROI?" In other words, Competitive Intelligence has to be a driving force for strategic corporate planning. The Competitive Intelligence group should be able to tell the executives, "At a high degree of confidence, if we do 'X' in market 'Y', we would expect a 10% increase in market share and revenues."

This is so much better than knowing "how many square feet are in our competitors' new warehouse in Cedar Rapids" or "what color is our competitor's intranet login page?"

How do you determine ROI criteria for your Competitive Intelligence? I'll give you some suggestions:

1) 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?
2) Bottom-line
–Can we be more efficient or learn best practices?
–Are there better ways to manage our processes?
3) Application
–How easily will we be able to act on these data?

If your CI efforts match up well with these criteria, you are probably pretty advanced. If your initiatives serve other purposes, they may still be valid, but ROI probably isn't your goal. If you need some help determining the ROI potential of your efforts, talk to Primary Intelligence. We're here to help.

And, if you don't know what the purpose of your CI initiatives are, you need to start asking. Or, looking for another job. If you can't show potential return on your efforts, you run the risk of becoming as valuable as your data; interesting, but worthless.

Please, add to the ROI criteria list. Post a comment or call me (801.838.9600 x5050, cdalley@primary-intel.com)

Competitive Intelligence, Right Under Your Nose

How often do you talk to your customers? If you add up the touches made by sales, account management, marketing and other client-facing services in your company, you might find that each of your customers is talking to you very regularly.

Hopefully, you have a central management group that has established some formal information gathering processes. Very common programs would include Customer Satisfaction, Account Loyalty, Win-back, Win Loss, Client Retention and Defection. Usually, these programs fall under the heading of "Voice of the Customer" (VOC).

So, you have two types of contact:
1-Informal, everyday conversations
2-Formal programs to gather Voice of the Customer Data

The fact of the matter is that your customers know nearly as much about the competition as they do about you. They evaluated the competition before selecting you as their vendor. They are regularly courted by the competition and many of your best clients also have purchased from your competitors, either in the past or currently.

Take a minute to see if your VOC program is generating competitive intelligence. In my experience, most customer sat and loyalty interviews focus on the client's experience with their present vendor. Go one step further and:

1-Ask your clients who they perceive as your biggest threats
2-Find out what they are hearing about the competitors' recent initiatives and offers
3-Understand how you stack up in various performance areas

The information will not only be enlightening, but will show your company what is happening in the market place in real time. Your company will benefit in the following ways:

1-Sales will know what is being said about your company by the competitors. They will have more intelligence to sell more effectively and counter negative messages
2-Marketing will know what the prospects and clients value in the marketplace (not just from you) and will be able to establish messaging that drive home the most important value propositions
3-Product Development will know the advances being made by the competition and will understand how well these innovations may be received by the marketplace.
4-Executives will have the right Competitive Intelligence to make strategic decisions.

And, to think... all of this information resides within your current customer base.

Next week, I will co-host a webinar with Ron Sathoff. The presentation will be made on Thursday, April 19 at 2 PM ET (11 AM PT). You can register by clicking here. Consider yourself invited.

And, Current Analysis (a company that I respect) has some information on creating CI from VOC. It is good to see shared thinking between two companies.

If you want to talk specifically about these ideas, call me (801-838-9600 x5050) or send me a note (cdalley@primary-intel.com). I would like to hear your ideas, too.

Inteligencia Competitiva

Yesterday, I received a very kind note from a gentleman (and Competitive Intelligence Professional) named Adrian Alvarez. His company, Midas Consulting , provides consultative services in Latin America.

I read his latest blog entry and found his observations to be insightful. If you don’t read Spanish, I’ll take the liberty of (very briefly) summarizing Mr. Alvarez’ message:

Adrian ponders the fact that Guillefmo Cañas has beaten Federer twice in their last two meetings. He suggests two reasons for Cañas’ success:

1- Based on quotes from Federer, his intelligence on Cañas game may be out of date. I would appear that Federer was surprised when he was not able to exploit Cañas’ game during the last two matches.
2- Cañas’ desire to win may have been underestimated.

These points are brought to business by demonstrating:

1- Companies need to update their intelligence regularly. Old (bad) data may be worse than no data.
2- Don’t underestimate the lengths that smaller, more hungry companies may go to in order to take your customers and market share.

Adrian says that he posts once a week. Join me in returning to his blog regularly to review his insights. And, if you read other Intelligence blogs and think I should know about them, email me.

What, How and Why

As a third-party competitive intelligence provider, Primary Intelligence receives numerous project specs and requests for bids, advice or consulting. By the time we hear about the project, our clients already know WHAT needs to be discovered and they want us to tell them HOW we will collect their data.

Logical. They want our expertise (or that of any third-party vendor) to make their efforts more effective. And Primary Intelligence exists to show companies how to grow market share, increase revenues and keep clients in the fold.

But, too often, nobody has considered WHY the information should be gathered.

For instance, one of our clients approached us with a formal RFP. From the content, it was obvious that there were concerns about sales effectiveness against a specific competitor. At the risk of:

*How is LaborFree’s sales organization structured (numbers; roles; management structure; span of control; by product)? Is there a sales organization chart that presents this structure? In a more general sense, is there a detailed, company wide org. chart? If so, please provide.
*To whom does sales report, both regionally, and at the corporate level?
*How are the sales offices geographically dispersed?
*What is the role, and extent of, inside sales?
*What is the typical, daily experience of a LaborFree sales associate (number of prospect/client contacts; “roll-calling” requirements; prospecting vs. account maintenance/growth; interaction with accountants and existing clients to acquire referrals; support from other LaborFree’s organizations and management, etc.)?
*How extensively do LaborFree sales associate make use of product demos in the sales process? Describe the typical sales call.
*Describe LaborFree’s discounting practices, at the time of initial sale.
*Does LaborFree raise its price over time to these customers who received initial discounts? Do these customers experience greater price increases than those who did not receive initial discounts?
*Are these price increases a major cause of customer losses?
*How does LaborFree calculate its customer retention rate (by client, or by revenues)? What has that rate been over the last five years?
*Does LaborFree use its LaborFree Agency commission revenue to support discounting to customers who use the pay-as-you-go insurance products? If so, to what extent?
*Number of orders submitted / % errors
*Number of payrolls setup / % perfect
*Number of first payrolls processed /% perfect
*Number of hot-start orders submitted / % actual starts
*Average cycle times
*How does LaborFree categorize its expenses? Provide specifics.
*As compared to SOFTTIME-ES, are similarly-labeled expenses actually alike, or are there definition differences? What are these differences?
*As compared to SOFTTIME-ES, does LaborFree match us expense-for-expense, or are there whole categories of expense not present in the LaborFree business model?
*Where LaborFree and SOFTTIME-ES expenses are similarly defined, where are their expenses materially less or more (proportionately) than SOFTTIME’s expenses?
*Per the above question, why are their expenses proportionately less or more than ours, for similar activities?

After five pages of this information, it was apparent that the CI group of this company looked like a Saturday evening DJ; taking requests and serving up the tunes. But the group wasn't doing their job of pushing back on the stakeholders and asking WHY.

Tomorrow, I'll examine a different course of action that eventually made a big difference in SOFTIME'S financial performance.

And, if you want to talk in the meantime, give me (Chris) a call at 801.838.9600 x5050.

Webinar - Competitive Intelligence with ROI

Last week, Primary Intelligence hosted a one-hour webinar demonstrating the benefits of approaching competitive intelligence with the goal of demonstrating predictable ROI. By far, it was our most successful online seminar session and the feedback indicates a strong need for better processes and criteria to shape business intelligence efforts.

(The presentation is available here)

While the presentation was well received, the Q&A session was a confirmation of the fact that business leaders and intelligence providers want more consistent processes and better criteria. CI Professionals want a plan that will make a difference.

Too often, the CI generated in a company is reactionary. Someone suddenly wants to know "Why we lost that account" or "When [competitor] moved into our space on the east cost."

While these are real business problems, the questions are reactionary, at best. CI efforts will bog down and die if they only answer these types of questions. And if management can't see that your efforts are making a difference, you'll probably be working for another company soon.

Day-to-day CI has to be guided by a strategic vision. Execution must be timely and people have to be nimble enough to change direction as the landscape shifts. But, there has to be a vision.

Who sets that vision? Give that idea some thought.

If you would like to talk more about the idea of CI with ROI, call me at 801-838-9600 x5050 or cdalley@primary-intel.com. Let's chat.