Effective Competitive Intelligence – Timeliness is Key

In my last post, I started talking again about effective competitive intelligence. Again, my definition of effectiveness is:

– Strengthen your company’s position
• How is our value proposition perceived?
• What is the competition doing?
• Which industry-wide best practices will truly apply?
– Discover new markets
• What is possible with new technologies?
• Where should we steer the company?
– Develop new products/services/solutions
• What problems do our clients experience that we can address?

One of the biggest obstacles to creating effective competitive intelligence is the timeliness of the data. If intelligence is not available at the moment of need, it does little good. And the value deteriorates quickly after the decision for which it was generated has been made. In other words, intelligence should be present before decisions are made as often as possible.

To judge your situation, ask yourself:

How much time passes between question and answer?

How out of date is the intelligence after it is finally collected?

Can spontaneous requests for intelligence be fulfilled in a timely manner?

In my experience, the timeliness issue is magnified in two scenarios: First, if your company has a reactive approach to intelligence and second, if your company has not yet developed a consistent intelligence plan to feed its strategic decision-making process.

The first example is characterized by companies that do not typically rely on intelligence. The reactive approach goes something like this: “We just lost [major account] to who? Find out why!” Or, “When did [company] start [entering our space/offering new features/pricing us out of the market]?” There isn’t anything wrong with being surprised by a market event. But, if surprising market events are the driving force for your intelligence, timeliness is going to be an issue. Unfortunately, it probably isn’t your biggest issue.

The second example may be the result of a company that has not yet consistently incorporated intelligence at the highest levels. In this case, you or your department has some selling to do. You are going to have to make a case for the benefits of your intelligence, ability to deliver and willingness to produce and analyze the information that is most applicable to the current ideas in the boardroom. You have to find the channels that will eventually grant you access to those people.

If you review the definition above, you’ll see that effective intelligence often has to be placed in the hands of senior management, at the least. Otherwise, how will the most productive changes be made?

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.

What is Sales Intelligence?

Sometimes, it is interesting to try to classify different areas of research and intelligence to see how certain specialties have originated, evolved and grown into their own species, so to speak. This study of the “origin of the species” can provide intelligence practitioners with the ability to see how their efforts might support or interrelate with other disciplines.

So, let’s define the top rung as general market research. The purpose of market research is to answer any question that might be of interest to a company. This is very broad and probably doesn’t do justice to all of the value a skilled market research director can provide. But, the umbrella of market research covers the entire gamut of information collection.

A subset of general market research is competitive intelligence. Again, this can be a pretty broad area and it is concerned with gathering information and answering questions that are influenced by the presence of competitive forces.

A sibling to competitive intelligence is market intelligence. To me, this specialty works to understand the market, value proposition, opportunity and forces in play against your company and product which are not influenced by the competition.

Sales Intelligence sounds like it should be a sibling to competitive and market intelligence. It could be defined as the information that is used to help sales sell more. If you limit this type of information to sales data (stuff like contact name, phone number, email, etc…) I guess you could say that’s true. But, overall, I don’t think this is the right approach.

To me, the definition of sales intelligence is:

Intelligence (competitive or otherwise) that can and will be used by a sales individual or team to increase the chances of ultimately
winning a quality sales opportunity.

This is a definition that is still evolving, so don’t get too stuck on any particular point. Overall, sales intelligence seems less like a specific discipline and more like a purpose. In other words, bits of competitive intelligence, market intelligence, general market research, (branding, pricing, value, etc…) can all be included in sales intelligence. If the information can be used to help sales people sell more, I think it can properly be classified as sales intelligence.

If a business exists to make money (and really, what other purpose does the business entity have?) as efficiently as possible, and the role of sales is to create the revenue streams as effectively as possible, then isn’t sales intelligence potentially the most important information a company can generate?

There are so many research initiatives that clamor for budget. When deciding which efforts to support, give the proper amount of gravity to those project that will have a direct effect on a company’s ability to sell more effectively in a market against the competitive landscape. Your company will benefit from this approach.

If you would like to help me refine the definition of Sales Intelligence, let me know. Send your suggestions to cdalley@primary-intel.com.

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).

Clients Will Build Your Market Share

Recently, I was working with my son, trying to teach him to help him start his own candy business. He wanted to know how to make a certain sucker that he buys from the store. He was a little frustrated that he couldn’t find their recipe online and he certainly wasn’t going to get the formula from that company.

In the end, I told him, it just doesn’t matter. It would be cool to know how to make the competitor’s sucker. But, it would be even better to create your own and make it better.

How do you find out what people will like better? Ask them. The consumer (or client) knows what they want to buy and they will tell you without much trouble. In my son’s case, following the leader might not be as productive as blazing a trail, based on market needs.

Yesterday, I described an RFP we received at Primary Intelligence that requested mountains of competitive intelligence. In a nutshell, our client wanted to know the inner workings of a specific competitor’s sales, marketing, operations and financial divisions.

Some of the more interesting requests were:

*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 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?
*As compared to SOFTTIME, 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 expenses are similarly defined, where are their expenses materially less or more (proportionately) than SOFTTIME’s expenses?

This laundry list was five pages long and most of the requests could only be fulfilled by tunneling in to the competitor and stealing all of the trade secrets.

The most amusing part of the deal was their requirement that the vendor had to demonstrate how each data request would be fulfilled in an "ethical manner."

And, when we asked SOFTTIME’s CI group to explain how they were going to turn this information into revenue, they had no clue; just a hope that someone above them knew what would come next.

At this point, the CI group at SOFTTIME needed to step up. They should have asked why all of this information was critical. They should have made stakeholders explain what they would do with the information. They should have explained the risks in obtaining this kind of data. (“How would a competitor find this information out about us? They couldn’t? Well, how do you expect us to ethically get this information on them?”)

If the goal is to win business, increase market share, serve clients and keep them in the fold, these information requests have very little to do with those objectives. In short, collect the data that will bring more clients to your company and keep more from defecting. Knowing your competitor’s sales commission plan probably won’t get you there.

This approach is working for my son. It will work for you. Make the Voice of the Customer an integral part of your CI plan.

Let's chat about these ideas. Call me at 801.838.9600 x5050 or leave me a comment below.