Just like reaching an unknown destination without a map is difficult, so is building a business strategy without competitive intelligence.
Competitive intelligence helps brands shape their product development, distribution channels, pricing, messaging, positioning, brand promotions, and features. It allows brands to identify their challenges and opportunities in the market in relation to their competition, so they can see what their competitors are doing and differentiate themselves from them.
What is competitive intelligence (CI)?
Competitive intelligence refers to any intentional research where brands collect, analyse, and utilise data and information gathered on their competitors, customers, and other external factors, potentially providing brands with a competitive advantage.
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When brands ethically and legally collect competitive intelligence, it can help boost the organisation’s decision-making capabilities. The goal of any competitive intelligence study is to create a business plan and strategy so organisations can make well-informed decisions based on market considerations.
Competitive intelligence goes beyond knowing the competition; the process is designed to take a deep dive to unravel the finer points of the competitor’s target markets and business strategy.
Competitive intelligence plays a vital role in all major departments of an organisation and can take on a different meaning for each department or function. For instance, for a product development team, competitive intelligence may mean new features being added to products. For a sales executive, it may be helpful to know how to create a winning proposal. For leadership, it may be understanding the competitor’s marketing strategies so they can craft a plan to gain more foothold in the market.
Competitive Intelligence studies and exercises can be tactical (shorter-term) or strategic (longer-term). The goal of tactical competitive intelligence studies, for instance, can be to obtain insights into increasing revenues or gaining market share. At the same time, strategic or longer-term reporting focuses on significant risks, threats, and opportunities, present or emerging.
A competitive intelligence study typically includes a wealth of information and insights from various sources, like government records, online mentions, social media, trade shows and journals, customer data and interviews, and traditional news media, to name a few. These sources are easily accessible and form the starting point for the studies. More in-depth information from distributors, suppliers, competitors, and customers is needed to make truly informed decisions.
What are the key benefits of competitive intelligence?
There is no substitute for Competitive intelligence research when it is undertaken with care and diligence. It is a powerful tool for brands to gain market share, boost revenue, and continue to build the right products at competitive prices.
Here are some key benefits of using competitive intelligence for brands:
#1. Ability to predict patterns and emerging trends
As brands excavate an enormous amount of data and insights related to their competitor’s activities, they begin to identify and foresee emerging trends in the industry. This allows brands to gain deep foresight to make informed decisions and strategic business plans.
#2. Aids in brand positioning
As brands gather insights and data about the competitive landscape, they also gain clarity on their activities and messaging. It helps them understand what works and doesn’t and cement their marketing.
#3. Helps make more informed decisions.
When brands unearth information, they gain critical insights into how the customers feel about their brand and the competing brands. This gives brands a better view of their customers’ wants and how their competitors are meeting the needs of the target markets.
#4. Boosts returns and profits
When you have a good understanding of the strategies and tactics employed by your competition and how they are performing, you will be better able to invest in areas that bring the highest returns, reducing risks and boosting profits.
Going back to the definition of Competitive Intelligence, we can see three necessary steps: “collect, analyse, and use competitor and market information to make informed decisions.”
There are many ways of unearthing relevant competitor data legally and ethically. Searching for information online may seem rudimentary, but it can provide invaluable information about the competitors and their activities. This information is readily available and accessible on the internet and is considered low-hanging fruit. With a few simple web searches, you can find great information on what the competitor is doing and what it has done in the past. You can also learn about product features, pricing, innovations, leadership, and important news and announcements relevant to your competition. There are tools that provide insight into the competitor’s search engine optimisation activities and their online advertising efforts.
From here, brands often go deeper and beyond the internet to analyse target markets and customer segments. Brands use quantitative and qualitative market research to gain more market insight.
Brands use data to analyse their competition beyond the simple search process. This entails going through endless data and making sense of it all can become cumbersome. This is where data mining comes into play. Besides gathering data from third-party sources, brands also gather human intelligence by interviewing relevant people, including customers and past suppliers. This is a time-consuming process and must be undertaken by experts in market research to ensure it is done ethically and legally.
Analysis of data is a crucial step in the competitive intelligence process. Once brands collect data, it needs to be analysed carefully to provide actionable insights. This allows brands to understand the patterns and separate them from the outliers.
The analysis aims to uncover strengths, weaknesses, opportunities, and threats as they relate to the competitive landscape. Therefore, collecting and analyzing information from disparate sources is essential in verifying their authenticity and validity. This helps us move away from making assumptions and gaining real insights from more accurate pieces of data.
Crafting a strategy
Once a brand has enough verified data and information on its competitors and strategies, it can utilise it to differentiate itself and make informed decisions regarding product, price, messaging, and other essential aspects. It allows brands to weigh the competitor’s strengths, weaknesses, and opportunities in relation to their own to gain a competitive advantage.
For instance, pricing is an important area for differentiation but can only be done right if everything is studied and taken into account to find the right price that is profitable and aligns with the customer’s perceived value of a brand or product offering. Therefore, a successful price is not about pricing your product at the same or lower price than your competitor but positioning your brand as the choice that provides the greatest value. And to make that happen, you need to know the price of competing products and their perceived value in the buyer’s mind. This calls for a thorough study and analysis of the competing products, markets, and consumers.
Today, e-commerce companies use sophisticated software for competitive pricing due to the market’s highly competitive and dynamic nature. Read more on how e-commerce brands utilise price monitoring software technology to track competitor pricing here.
To get the complete picture, brands may conduct competitive intelligence surveys. They can define their target audience and use various demographic and psychographic questions to identify consumer behaviour. These also include questions about competing products and services. You may also use ranking and rating type questions and identify any unmet needs or gaps in the marketplace or use open-ended questions to get a more in-depth view of the consumer’s mind. Brand recall and recognition surveys are also helpful in gaining consumer perception of various brands. For instance, a sparkling water brand may ask: “When you think of bottled sparkling water, what brand comes to mind first?” This can help brands discover how frequently their brand is mentioned compared to competing brands in the category.
When armed with the powerful insights gained through competitive intelligence, brands can be more strategic in all aspects of business, from product development to pricing and distribution. By differentiating themselves from competitors, they can gain valuable market share, grow brand value, and brand equity, and boost their return on investment (ROI).