No matter how successful you are, you know that staying a step—make that many steps—ahead of your competitors is critical to your profitability. Your sales, your product development and your service all need to match or beat that of competitors. And the only way to get direct insight on your competitors is to engage their current and former customers.
Most entrepreneurs know this is mission critical, but very few know how to get it done. So what does effective competitive intelligence look like? It should meet the following criteria:
• Have a very well-defined purpose: Competitive intelligence is hard to obtain and requires significant effort on your part and that of potential customers. If you find out the information you obtained isn’t what you need, it’s not easy to go back to the well. It’s also vital to use competitive intelligence with precision—trying to generalize it after poor targeting is fraught with disaster.
• Be from the right audience (your buyers/influencers): It sounds obvious, but a reminder is in order on this factor, given the number of times I’ve seen it breached. Just double check that your target audience really is the group you want insight from. If they’re not relevant decision makers or influencers, move on, or risk costly misguided decisions.
• Be fresh and current: Top level strategic decisions are made based on competitive intelligence—decisions about a company’s entire direction. Acting on out-of-date information can be absolutely detrimental.
• Be based on actual and speculative elements: You need to be very clear on which feedback is based on actual experience and which results from conjecture. The first is a better signal of what things buyers might actually take action on, and the latter of emerging opportunities.
• Be measurable (quantitative) and/or specific (qualitative): The most powerful competitive intelligence is a combination of qualitative and quantitative. It takes carefully constructed questions to get at each. Qualitative lets you get insight on things like market trends and potential product enhancements. Quantitative lets you get insight on things like customer satisfaction and strength of your references. Each of these factors should be obtained in the context of competitive comparison.
• Be ethically obtained: Competitive intelligence is often misunderstood and seen as unethical or as a type of espionage. Done incorrectly it might be, but when done in line with the code of ethics of the Strategic and Competitive Intelligence Professionals (SCIP), the practice is completely above board. Having used SCIP member organizations in the past, I’d argue that not leveraging competitive intelligence in this way is a large strategic gap.
• Be securely managed: Competitive intelligence involves sensitive data about potential customers, existing customers and competitors. You have a duty to keep it secure and well managed to protect it. For this reason it is often best to outsource this task to a cost effective, recognized professional.
• Be actioned: Like all information, competitive intelligence is only as good as its application. Don’t revel in it, make decisions and take actions based on it.
Clearly, there are a number of critical elements to get right when pursuing better decisions through competitive intelligence. But the payoff is big and the risk of not acting is probably even bigger. Once you’ve explicitly decided that competitive intelligence is vital to your strategic management approach, the next step is to obtain and manage it effectively. A best practice way to accomplish this is through a Customer Advisory Board.
If you have time, you can set-up a Customer Advisory Board (CAB) on your own, following best practices. But if you are constrained for time, you can now enlist a turnkey managed customer advisory board service for the first time—www.SMECAB.com. Register here and you’ll get a month free. No obligation. No credit card required. No risk. No cost.
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