by: Richard Ensman
Hear the term “competitor intelligence,” and you may visualize sinister activities like industrial espionage, electronic eavesdropping, and other shadowy phenomena that smack of poor ethics or illegality.
Typical competitor intelligence gathering techniques, however, are not at all like this. Rather, they’re based on common-sense research principles, and usually involve public information available to any wise business person willing to seek it out.
Competitor intelligence is far from a luxury and, at times, may even be a critical ingredient of business success today. Think about it: only through knowledge of your competitors’ products, market penetration, and strategic strengths can you effectively position your own products and services in the marketplace.
Analyzing the Competition: What to Look For
The secret to effective competitor analysis is to identify exactly what you need to know, and zero in on that data crisply and efficiently. Then, you can use that information to help achieve your own business objectives. Here are some common questions you might answer through a competition analysis:
- What are the unique selling propositions of my competitors? What can they do that I can’t?
- What are my competitors’ customer service capabilities?
- Where are the gaps and weaknesses in my competitors’ business operations? How can I turn these into competitive strengths of my own?
- How do my competitors’ prices fare in relation to mine? Do prices vary from season to season? What discount programs do they make available?
- What key marketing strategies do my competitors pursue? Do they tend to focus on particular segments of the buying population?
- What is the quality of my competitors’ products? Do customers perceive this level of quality?
- How do my competitors perceive me?
- How would I describe the financial posture of my chief competitors? Can I estimate their profit margins? Are their behind-the-scenes operations more or less efficient than mine? Are competitors’ costs being soaked up in some way?
- What distribution channels do my competitors use? Who are the middlemen? How fast is distribution?
- Who supplies my competitors? What unique financial arrangements do my competitors have with suppliers?
- What is my competitor’s market share? Is it going up or down? Why?
- What is my competitors’ vision of the future? Does it include expansion plans?
Searching for Answers
Now, you have a list of things you want to know about the competition. How do you find the answers? An amazing variety of information about your competitors is available at your fingertips right now. As a simple starting point, know your trade. This means reading industry and local business publications (which may cover your competitors) and listening to competitor scuttlebutt in your community.
To continue your investigation, begin to inspect your competitors’ advertising in both consumer and trade media. You’ll learn about their product line and capabilities. At trade shows, stop by the booths of your competitors. They’ll be putting their best foot forward here. Pick up their literature and observe their product displays. And if you notice that your competitor is making a presentation at a trade meeting, don’t miss the opportunity to attend.
Go a step further and conduct a formal competition survey. Call or write your competitors, requesting product and pricing information. Observe the speed and nature of the responses you receive, and the content of any ensuing contacts your competitors make. A step further still: consider a service analysis, using a “mystery shopper” or “mystery customer.” This shopper, a trained employee or consultant, can visit or call competitors with pointed questions about product quality, delivery, past performance, or specific issues youre concerned about. The answers will often reveal information about your competitors’ philosophy, product performance, and market strategies.
At times, you may need to gather in-depth qualitative information on your competitors. This is the type of information you can obtain only by talking with other people. Make a list of questions you’re trying to answer: questions about new product lines, weaknesses in the market, or service response, for instance. Pose those questions to your peers, or to the peers of your friends and colleagues in other industries. Next, move to your suppliers, who may have extensive information about your competitors. And don’t hesitate to take the opportunity to chat with prospective employees about their experiences with your competitors.
As you ponder all these business intelligence opportunities, remember that you need not – and should not – pursue all of them. The secret is to identify a select few intelligence-gathering strategies that you can call your own. Work those strategies into your day-to-day routine – say, by making it a point to ask a competitor-related question or two of a visiting sales rep or spending time gathering competitor information from the Internet once a month. The result: you’ll learn how to stay a step or two ahead of your competition and you’ll learn more about your own hidden business potential as well.