It is vitally important to know what your competitors are up to. Having solid information on your competitors keeps you in the loop regarding their latest activities, campaigns, and new products. Competitor information helps you protect and grow your business.
You can also leapfrog their innovations to secure a leading position for your company. It is well worth the effort to maintain a detailed profile of your competitors, their strengths, weaknesses, and relationships with customers.
You can use this to compare the performance of your organisation with that of your main competitors by measuring key factors such as price, quality and speed of delivery and use that information to enhance your organisation’s performance.
Why is competitor intelligence important?
Competitor analysis is a strategy that involves researching major competitors to gain insight into their products, sales, and marketing tactics. Implementing stronger business strategies, warding off competitors, and capturing market share are just a few benefits of conducting a competitive market analysis.
What your competitors are up to can have a significant impact on your plans. There can be significant business implications if you are about to run a marketing campaign or new product launch at the same time a rival is bringing out a new product.
How to begin your competitive intelligence exercise
Competitive information helps you identify how you can protect your most important business components. It also helps you strengthen your position with customers in situations where your competitors are currently holding a much larger share of the market.
Your market intelligence on different aspects of your customers’ business should include:
- Main markets
- Customers
- Resources and financial performance
- Product range
- New products
- Growth plans
It’s often difficult to know where to begin. Here are the main questions you should be asking.
1. Competitor information
- How many competitors do you have?
- Who are your competitors?
- Are they direct or indirect competitors?
- What are your competitors’ main strengths?
- Who are your competitors’ main customers?
- Where are your main competitors located in relation to your factory or your outlets?
- How do they compare in size of estimated turnover?
- Which products produced by your business are threatened by which opponent?
- Which of your competitors has the strongest growth prospects?
- Are there new entrants to your marketplace?
2. Customer information
- Which of your customers could switch their purchasing to one of your competitors?
- How strong are your competitors’ relationships with key decision-makers in your market space?
- How has the volume of business changed over the last three years?
- Are there any significant developments that have brought about these changes?
- How long have competitors been dealing with your key customers?
- How do your practices compare with competitive offerings?
3. Price and service
- How do prices compare?
- What are your standards of customer service in relation to your rivals?
- Have your competitors invested in relationships with customers that make it difficult for you to make inroads?
- Are any competitors making inroads into businesses in which you are currently the dominant supplier?
4. Capability
- Have you got the skills and expertise to overcome any competitive threat?
- What is the current financial situation of your business?
- Is your cash flow strong or are you limping along on overdraft?
Getting organised
Building competitive intelligence takes time and demands resources. Make sure you set aside the time and the skilled people to assist you. Not only must the competitive information be harvested but it must also be sorted, analyzed and sorted so that it is retrievable, a data warehouse or artificial intelligence capability will be of great assistance here. Statistics in graphical form will greatly assist executive decision-making. But you can still get powerful results with a skilled administrator and an elementary digital and physical filing system.
Sources of information
There are a variety of ways to collect information on your competitors. The trick is to regularly review the sources to see what the new developments are.
1. The internet
The internet is going to be your single most valuable source of information. Your competitors are putting product and service information in the public space on their business websites. They also announce new developments and new products there. They may have details of their strategy and their management team. Knowing the background of their senior executives can give you an indication of how they run the business. Listed companies will also share their annual reports. The great advantage of internet-based information is that it is digital and readily downloadable.
2. Your sales team
Your sales team will be another valuable source of competitor information. This is regardless of whether they do telesales or visit customers on their premises. Customers will share information during these calls. A visit to a client is a useful opportunity to look at deliveries, and stock in the warehouse. Who knows who your salespeople will bump into in the customer reception waiting area? Have regular conversations with your sales folk and capture what they come across in their encounters with the marketplace.
3. Trade media
Trade media is a good source of information. Companies will place advertisements or make announcements through advertorials. Publishers may also produce regular surveys on economic conditions and technological development. All these are valuable sources of information. The surveys are particularly useful in that significant analysis will have been done at no cost to you.
4. Networking
Your personal networks are a useful source of competitor information. Your suppliers will also have dealings with your competitors. A conversation over some coffee can yield valuable insights. Chambers of commerce and professional bodies are great not only for information about your rivals but are also a source of new business opportunities. Service clubs are also a good place to obtain marketplace information.
Analyze your information
Your competitor analysis will deliver a regular flow of website links, downloaded documents as well as paper versions. You now must review, analyse, and store this, so that you can build up useful intelligence over time and be able to quickly access important information.
With digital information, you can set up a simple directory, starting with the names of each competitor and then folders under each for marketing, products, services, or other relevant categories. A manual filing system may be useful for paper documents. A simple excel spreadsheet or a database application may further assist in identifying a competitor, relevant sources, and type of information.
If your budget allows it, you may implement an appropriate artificial intelligence application that will codify all the digital information to hand and locate it quickly and easily upon initiating your inquiry.
It does not matter how sophisticated your competitor intelligence system is. The mere fact that you are regularly evaluating the information on your competitors will put you at an advantage. And in these days of harsh competition, a small advantage can mean the difference between success or failure. It won’t happen overnight, it’s an ongoing process. Performing regular competitor analysis will give your company the advantage it needs to outsmart the competition and stay ahead.
