Competitive Intelligence Tip #3 for 2008 – Leverage Your Intel to Beat the Competition to the Battlefield

In a marketing case study published by SCIP way back in 2001, the following description of the competitive environment illustrated the need to involve more sales and marketing people within the competitive intelligence efforts.

“A truism: In the face of economic uncertainty, companies must be more aggressive in order to gain competitive advantage. A fact: Under pressure to deliver against difficult odds, sales and marketing groups increasingly are being embedded into company-wide CI operations. The result: A real difference in revenue generation, from winning a small sale, to taking advantage of a major market opportunity.”

In a case study of Merck’s intelligence efforts, a description of the objectives included the following:

“The project involved re-positioning a current Merck drug so that it claimed the competitive space a rival's product was aiming to occupy -- thus delaying the competitor's launch to the point where, because of patent expiration timetables, a major rollout no longer made financial sense.

Summed up, this project involved using publicly available data to predetermine the competitor's plans for marketing and positioning a brand still in development. Once anticipated, a pre-emptive counterstrategy was conceived and employed by Merck, by repositioning a product already on the market. This forced the competitor to conduct new trials to reposition its brand, resulting in a significant delay in market entry, and allowing Merck's existing brand to enjoy sustained growth and increased market share.

While the specifics may relate to pharmaceuticals, basic CI technique was at the heart of this success. Early warning of the competitor's intentions was gleaned by attending professional medical meetings and gathering public domain information such as efficacy and safety data, and clinical trial results -- providing clues on how a forthcoming development may be marketed.

‘We found that the message around the competitor's product, which hadn't been introduced yet, was very strong. Not only strong, but in a market segment that no one else occupied," related Mr. Kalb. "Our own original data about a Merck product showed if our product was positioned in the same area where their product was most likely going to be positioned, we could block them. We could get into their space before they got there, and occupy it in a way that prevented them from claiming a unique selling proposition.’”

Merck ended up running simulations of marketing messages, strategies, product marketing and attempted to anticipate where the competitor’s product would be of most value. As a result of these exercises, Merck was able to beat the competitor to its intended market, causing the competitor to delay its product launch 18-24 months due to repositioning efforts. Additionally, Merck was able to take advantage of being first to market and weakening all subsequent efforts of the competitor.

Merck estimated a gain of $150-200 million over the competitor due to its competitive intelligence project, which was still bringing in gains. These gains may have eventually total out somewhere in the $300-400 million range.

Not a bad bit of ROI for a hard working competitive intelligence team.

Not every competitive intelligence initiative is such a big hit. In fact, some CI efforts do little more than monitor trends. But, if you are in a position to understand company strategy, future direction and aspirations, you need to step away from the day-to-day and examine how your current CI might lead to bigger insights. If you can improve your company’s overall performance by just 1-5% with intelligence, the ROI story can be very impressive.

And remember. Every extra dollar you earn for your company is a dollar your competition will never see.

Competitive Intelligence Tip #1 - Make Your CI Produce Revenue

In a post by Jan P. Herring titled “How Much is Your Competitive Intelligence Worth,” the distinction between information and intelligence is made in a way that speaks to me:

“In the final analysis you can evaluate your company’s CI effort if you properly define what and how you intend to measure. In my experience, senior level users of BI/CI are not as interested in financial or quantitative measures of your CI products & services as they are in having intelligence that visibly affects their decision-making or business actions in a positive fashion. They do, however, expect to see some form of related action. Those actions that result in grater sales, profits, or other measures of business success are the most valued.

An old friend and associate, Robert Steele, probably put it best, “Information costs money. Intelligence makes money!” Essentially, any competitive information that a business manager acts on becomes intelligence. And, intelligence used by a company that makes money is good intelligence!”

He also discusses various ways that Competitive Intelligence can produce ROI, but more importantly, can be measured to validate the ROI:

Time saving: Savings for both professional and support personnel

Cost savings: Elimination or reduction in expenses

Cost avoidance: Elimination of planned expenses

Revenue increases: Increases in the number of sales or size of sales

Value added: Benefits not easily related to specific dollar values, e.g., more effective strategies or better new products and services.

In so many places, we have tried to espouse the same message. Competitive intelligence professionals need to be looking for the ROI in their initiatives. Or, too often, you will be known as the producer of information, not intelligence. And, really? What value is there in that?

Links to other Primary Intelligence thoughts on CI/ROI
Webinar: CI with ROI
Another Endorsement for Win Loss Analysis
Competitive Intelligence – The Difference Between “Interesting” and “Effective”
What are the top challenges with regards to Competitive Intelligence?
Making Competitive Intelligence Effective with Cross-functional Teams (Part 2 of 4)
Increasing ROI from Competitive Intelligence Efforts
Analytics in Competitive Intelligence: Stated Importance vs. Derived Importance

Using Win Loss to Win Back Business (After they have experienced the competition)

During our most recent webinar (hosted on 10/25/2007 and available for download here), Ron Sathoff and I talked about three of the biggest benefits of Win Loss. One of those points was the ability to win back business that was previously lost to a competitor.

At Primary Intelligence, we emphasize competitive intelligence that will help your sales, marketing and business development organizations create more revenue, strengthen competitive positioning and refine value propositions to be more effective than your competitors. Our goal is to provide your company with increased revenue through your sales and marketing efforts.

How do we do this? Primarily, we use Win Loss studies to measure competitive performance during some of the most valuable times; namely, when your company, product and sales performance are being compared with your direct competitors. We also take the opportunity to ask about the key loyalty drivers based on their current experience with their new vendor.

Using these data, combined with additional client satisfaction questions based on their current experience, Primary Intelligence provides a win-back index that helps prioritize sales and account management efforts with your lost deals long before their current vendor starts to worry about retention.

Imagine begin able to target your competitors’ defectors before the competitors can develop retention strategies.

One of our current health insurance clients said that using this system, they were able to win back 7 of 30 losses within 12 months of the initial loss. What would a 23% win back rate do for your company’s top line revenue?

If you have any questions, experiences or thoughts, let me know. I’d enjoy talking with you to understand how you achieve these same types of results. (cdalley@primary-intel.com, 801-838-9600 x5050)

Another Endorsement for Win Loss Analysis

One of our clients in the Blue Cross Blue Shield network was kind enough to provide an assessment of the success of their win loss program, which they have outsourced to Primary Intelligence:

“The real value of the Primary Intelligence System to us, is their uncanny ability to drill through Producers directly to Group Leaders and Group Decision makers and engage them at a level denied to us over and over again.

At that level, Primary Intelligence uncovered the truth, the real drivers of decisions on healthcare, and gave us the opportunity to address those directly the following year.

We won back 7 of the 30 losses the previous year and those wins were driven by knowing the truth.” - Senior Healthcare Intelligence Analyst

If you are considering a win loss program, you might consider the following:

How much more successful would your company be at selling new deals if you really knew why you win and lose?

How much revenue would you gain if your company could win back 23% of lost sales within 12-24 months?

What would the ROI be if you were able to create a more solid “win” and increase the likelihood that your current client base would stay with you longer?

These are the results that Primary Intelligence delivers daily. If you are missing out, let’s chat.

Download our recent webinar on the topic (click here) or we can talk. (cdalley@primary-intel.com, 801-838-9600 x5050)

The Purpose of Business – Competitive Intelligence May Be the Key

Lately, I have been reading about business, business development, and the relationship of marketing in the entire mix. So many different thoughts… So many different ideas.

I found one idea while researching the topic, “The Purpose of Business.” Below, I’ll share a little bit with you:

Dr. Peter Drucker: A business enterprise has two basic functions: marketing and innovation

If we want to know what a business is, we have to start with its purpose. And the purpose must lie outside the business itself. In fact, it must lie in society, since a business enterprise is an organ of society. There is only one valid definition of business purpose: to create a customer. The customer is a foundation of a business and keeps it in existence. The customer alone gives employment. And it is to supply the customer that society entrusts wealth-producing resources to the business enterprise.

Because it is the purpose to create a customer, any business enterprise has two – and only two – basic functions: marketing and innovation. These are the entrepreneurial functions. Marketing is the distinguishing, the unique function of the business.

ACTION POINT: Find out what needs your customers want fulfilled today. Determine how well your products are meeting the needs of your customers.

If the idea is to create a customer, I don’t want to just stop there. In marketing, I want to create a customer better than anyone else in my space. If there are a certain number of potential customers out there, I want to grab as many as possible. It’s not that I’m greedy. It’s just the nature of business.

And, if (as the article says), there are two basic functions (marketing and innovation). The most important tasks will be focused on marketing and innovating better than anyone else in your industry.

Where does CI fit into understanding the marketing and innovation of your competitors? I’ll give you an example that has provided Primary Intelligence and dozens of our clients with powerful insight into these two areas: Win Loss, Post-implementation and Account Loyalty & Retention.

Win loss
The ultimate study of creating a customer. Win loss is a competitive intelligence effort that focuses specifically on the process of building the customer relationship, conveying value, presenting a solution to a need and comparing your performance in those areas to that of the competition. “Why isn’t the business growing?” “What aren’t we creating customers like we thought we would?” If those answers are important to you, win loss is generally the most effective answer.

Primary Intelligence has a very sophisticated win loss system the rivals the results of just about any in-house program we’ve seen. Yes, I’m bragging. Talk to me and find out why.

Post-implementation
Just after the customer has been created, you should be very close to them to determine: a) how life has changed for them now that they have your product/service/solution in place and b) What are the additional bits of service they wish you provided now that the initial needs have been met.

Don’t think that these conversations should happen only with your own clients. If you know the customers that signed with the competitor, make sure you’re talking to them 60-90 days into their experience. You still own a relationship built during the sales process and that relationship can be leveraged to understand whether the grass really is as green as originally thought. What would your sales guys give to be able to say, “You can choose [competitor x] and they have a good product, but the people we talk to say that [competitor x] consistently falls short in these three areas…

Account Loyalty and Retention
There is no argument that keeping a customer is often more important that creating one. Account loyalty and retention show you how to be more effective at keeping a much higher percentage of clients when it is time to renew. I’ll explain the difference between the two:

Account loyalty studies are conducted during the client life-cycle. This research helps you see where the customer experience has helped your chances of renewing a client and where the gaps may be. These efforts should be taken throughout the client lifecycle, but are traditionally administered a few months before accounts begin their renewal considerations.

Account retention programs are conducted just like win loss studies. However, in this case, the study attempts to answer “Why do our clients renew/defect” rather than “Why do our prospects choose us or the competition?” Primary Intelligence has a powerful set of predictive analytics that can be applied to this type of study; just like our win loss.

Be the Best
In the final tally, you’ll have to ask yourself: “Are you in it to do just well enough or to generate customers better than the other guys?” Be in it to win. It’s much more fun that way.

Then, look for the tools that will give you the biggest chance of creating a new customer at the expense of the competition.

Thoughts? Let me know. (cdalley@primary-intel.com, 801-838-9600 x5050)

What are the top challenges with regards to Competitive Intelligence?

Recently, I saw a LinkedIn question that asked,

What are the top challenges with regards to competitive intelligence in Pharma at the moment?
I'm putting together a Pharma industry conference on the subject and would like to hear what's hot in the area at the moment.

My answer, which I presented in form of a letter, explains how important ROI and visibility have become. It wasn’t long ago that the topics were ethics and espionage (and those topics still get mileage), but thought leaders (individual and organizational) seem to be thinking more about effectiveness than methods.

The response is included below:

Ms. Ojewale,

I'm more of a CI practitioner than Pharma industry expert. That said, I believe that many of the challenges in your industry are typical of many others.

One of the problems inherent in CI is trying to make sure that the information you obtain will be used effectively to drive change that:

1. Strengthens a competitive position with an existing product
2. Finds new markets or uses for a product
3. Helps create new products that meet an unforeseen need.

In other words, if CI isn’t producing revenue or leading to the revenue path, it may not be as worthwhile as you might think.

The second problem is trying to convince change agents (senior management) that the intelligence should be used to create business change. This is a widespread problem that causes companies to under-leverage their CI efforts. Too often, the intelligence is judged as trivial. If the intelligence confirms something that the executive already knows, the information is devalued. If the intelligence shows something unexpected, too often, it is dismissed due to the fact that someone in an executive office knows better than a CI analyst.

To understand the significance of this problem, you’ll note that the Society for Competitive Intelligence Professionals (SCIP) hosted a conference earlier this month for CI professionals. The topics they intend to cover do not address any of the “how to gather CI issues.” Instead, their list of topics focuses on making CI relevant, getting CI noticed and meshing with upper management’s needs.

· Allocating resources
· Strategic internal positioning of CI
· Understanding and meeting upper management needs
· Hiring and retaining CI talent
· Ensuring success: Promoting your department
· Establishing measurable objectives (ROI)
· Vehicles for communicating CI

(For more information: http://members.scip.org/scriptcontent/BeWeb/events/eventdetail.cfm?&PRODUCT_MAJOR=BPFORUM907)

These ideas seem to encompass much of what is being discussed in the professional CI ranks. Thought leaders are leaning toward the topics of relevance, effectiveness, ROI, etc…

This Thursday, Primary Intelligence will host a webinar based on making sure that Competitive Intelligence makes a difference. If you would like to attend a no-cost webinar on Thursday, 9/27 at 2pm ET, register HERE.

How Can You Tell if Competitive Intelligence is Effective?

Any electrical socket around you provides a tap to a near endless supply of energy. Inside the wires, there is enough power to run a houseful of gadgets, recharge your electric car or deliver a nasty shock (don’t try that at home).

But, until you use the power in the line to do something (turn on the TV, cook a gourmet dinner, recharge MP3 players and such), it really isn’t of much value. In order for the electricity to be effective, it has to power something that is important to you. Otherwise, it is just a bunch of electrons with potential energy sitting in copper wiring.

Your competitive intelligence is very similar to the electricity in your wires. You can produce as much sales, market or competitive intelligence as you like, but until someone uses it to power change in your organization, it really isn’t effective at all.

And, that’s how I would define “Effective Competitive Intelligence.” The intelligence is effective if it:

1. Strengthens your company’s position
2. Discovers new markets
3. Develops new products/services/solutions

Competitive Intelligence is simply a means to an end. It is not the end itself. Improvement can be made without intelligence (just like you can blend your own kitchen concoctions by hand), but with the intelligence, the final result is usually achieved more quickly and, probably, in a better fashion.

In order to maximize effectiveness, Primary Intelligence recommends that you:

1. Choose your competitive intelligence initiatives wisely.




2. Make use of the intelligence and create change. Previous posts provide thoughts on ways to make intelligence most effective. You can find a 4-part series on the topic here: (part 1, part 2, part 3, part 4)

If the second part doesn’t happen and the intelligence is change is never made, the first part doesn’t matter one bit. The first part is only a means and a means without an end has very little value.

If you have ideas on this topic, let’s talk. (cdalley@primary-intel.com, 801-838-9600 x5050)

Making Competitive Intelligence Effective with Cross-functional Teams (Part 1 of 4)

On Wednesday, I was a little sour toward irrelevant Competitive Intelligence efforts. Fortunately, I am associated with dozens of companies that are producing intelligence efforts at different levels of effectiveness. More importantly, each of these companies has a commitment to making the efforts more effective over time. They are searching for best practices and making changes.

In my experience, companies that make the most effective use of intelligence all use the same system at some level. If your company truly wants to make gains based on intelligence it should:

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

Let’s talk about the first point.

A commitment to making decisions with intelligence
This quality starts at the very top. Perhaps you have a corporate board or an executive team. How do your CEO, CSO, CMO make decisions? Have they been around so long that they “know everything?” Do they reach out personally to clients, employees, partners and other significant market drivers?

You may not know the executive personally, but you can infer their receptivity to market intelligence by the conversations they have with employees. If they are the type that make idle talk and discuss the weather or the local sports team, they may tend to be more closed-minded about intelligence-based decisions. On the other hand, if they are committed to LISTENING to real matters that effect real people, they may tend to consume intelligence more willingly.

Of course, if the executives already sponsor intelligence initiatives, you might consider that a dead giveaway.

Why is this commitment to making decisions so important?

Because intelligence is only a means to an end. The end has to be change in the company that produces more revenue. And, change doesn’t happen without a commitment at the highest levels.

All of your competitive intelligence efforts won’t mean much if the change agents in your company don’t use it. You can contract with 3rd-party vendors, scrape websites, monitor press releases, evaluate public financial documents and measure market penetration forever. But intelligence without action is worthless.

Over the next few posts, let’s consider the other bullet points above.

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

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

Competitive Intelligence, Analytics and Your Job

Where can analytics benefit a company in its competitive intelligence program? Can the application of analytics to specific performance areas (vs. the competition) provide a competitive advantage? Such areas include:

• Supply Chain
• Loyalty
• Pricing
• Human Capital
• Product and Service Quality
• Financial Performance
• Research and Development

While many of these areas would seem to be analysis of internal processes, these same techniques can be applied to outside influences as well, including the competitive landscape.

And, nobody has to apologize for categorizing the refinement of internal processes as competitive intelligence. If a company can gain a bigger competitive advantage by studying itself rather than the competition, why wouldn’t you consider this method?


FUNCTION/DESCRIPTION/EXEMPLARS
Supply chain – Simulate and optimize supply chain flows; reduce inventory and stock-outs. (Dell, Wal-Mart, Amazon)

Customer selection, loyalty, and service – Identify customers with the greatest profit potential; increase likelihood that they will want the product or service offering; retain their loyalty. (Harrah’s, Capital One, Barclays

Pricing – Identify the price that will maximize yield, or profit. (Progressive, Marriott)

Human capital – Select the best employees for particular tasks or jobs, at particular compensation levels. (New England Patriots, Oakland A’s, Boston Red Sox)

Product and service quality – Detect quality problems early and minimize them. (Honda, Intel)

Financial performance – Better understand the drivers of financial performance and the effects of nonfinancial factors. (MCI, Verizon)

Research and development – Improve quality, efficacy and, where applicable, safety of products and services (Novartis, Amazon, Yahoo)

(Davenport, Thomas H. (2006), “Competing on Analytics”, Harvard Business Review, page 6)

Some competitive intelligence professionals are taking the lead in this area and expanding their skill set to include predictive analytics and advanced statistics. Others are still working on creating libraries of information and relying on gut feelings and intuition to provide direction to the company.

Watch for graduates to come out of school with advanced degrees in business analytics. They will be in very high demand in the near future. If you don’t understand these concepts, you may be working for a dinosaur. If your company isn’t a dinosaur, you may have to find a job working for one as the highly skilled analytics experts move in.

Sorry about the doom and gloom. But, that’s where I see things heading. I recommend moving ahead of the curve and adding some additional analytic training to your repertoire.

Of course, Primary Intelligence stands ready to put predictive analytics into your Win Loss and Account Loyalty programs right now. If you have a couple of minutes, give me a call and I’ll show you how. (cdalley@primary-intel.com, 801-838-9600 x5050)

Primary Intelligence Competitive Intelligence Newsletter – 6/12/07

We’re receiving good feedback on our newsletter. It is our hope to cover topics that will help companies sell more. Now.

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.

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Cover Story
Sales Teams: Making "Second Half Adjustments" to Win the 2007 Sales Game
By Tony Randall, Primary Intelligence Inc.These "dog days of summer" are actually more important than many sales teams may realize. Sure, we all want to take a break and head to the beach or the mountains to get recharged. And we will. But lest we forget that while you may be ignoring your current clients or targeted prospects, someone out there may be courting them in your absence. So, how do we prepare for that all important second half push. (For more, click here)

BlogCentral
Voice of the Customer Should Be Used to Collect Competitive Intelligence
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... (For more, click here)

The A-List Archive
Why Did Overstock.com Choose Oracle over IBM?
Originally Published in 2004.
Executives at Overstock.com, an online retailer of discount and closeout merchandise, wanted to create a “data strategy” for the Company that would guide its future solution purchases. Vice President of Technology Shawn Schwegman said that Overstock.com did not look at any marketing materials and considered only the technology that potential vendors could provide. The Company evaluated IBM, MySQL (an open-source database solution), and Oracle.(For more, click here)


If you have feedback or comments, let me know. I am interested to know what you think about our publication. (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)

Life on the Prarie - The Best Ranchers Protect the Herd

At the risk of alluding to your client base as cattle, let’s consider the experience of a successful rancher. A small part of his year is spent on increasing the herd (birthing calves). Most of his time is spent nurturing, caring, feeding and protecting the herd from dangers. He builds fences, renders aid, steers the herd to the greenest pastures and fights to keep wolves, poachers and other predators away from his livestock. This herd of cattle is his life. He doesn’t have the luxury of a safety net or fallback plan.



A business has a great deal in common with the rancher. You work hard to bring in a few new accounts every year. But, if you are like most businesses, 75%+ of the value of your business exists in your current accounts.

Your competitors (either other ranchers or wolves) know the value of your accounts and want them for their own. They are fighting hard to get inside your fences. They may even dress up in funny little cow suits so as not to spook the herd and possibly even fool the rancher.

This is the reason why you have to focus a substantial amount of your competitive intelligence on maintaining your accounts.

There are two very important sources of competitive intelligence that need to be mined in the client lifecycle:

1-During the normal course of business (e.g. during the execution of the project or fulfillment of the contract)
2-Post renewal-defection (after the company chooses to renew its engagement or defect to a competitor or otherwise)

Your current client list interacts very frequently with your competition. Even the most satisfied accounts listen to your competitors. Occasionally, they reach out to discover new developments in the marketplace.

A big benefit of your current client base is that they are generally friendly to you and willing to provide quality information about your competitors. Usually, all you have to do is ask. They will talk.

They can tell you new development and tactics. They can tell you how you stack up in many different areas vs. various competitors. They will tell you what you will need to do to maintain competitive advantages in the marketplace against specific companies.

And, you can quantify competitive performance scores in order to perform statistical analysis and predictive analytics. With these tools, you can build very strong fences to keep the herd intact.

Keep riding cowboys (and cowgirls…). If you want some ideas on how to implement Competitive Intelligence among your current accounts, talk to me. (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)