Competitive intelligence gathering can be a useful exercise that yields important information to guide your business and marketing strategy, or it can sit in a computer file and collect the equivalent of electronic dust if you’re not careful. While a competitive intelligence project can bring out your inner spy, it can also lead to confusion, misinterpretation of data, and faulty strategy-setting. Worse still, it can lead to something I call the “me too” syndrome in which you end up pushing your business into a model that’s a poor imitation of a competitor rather than an authentic and rich representation of yourself. The following 10 tips for effective gathering and use of competitive intelligence information may help you avoid the pitfalls of gathering information on your competitors while simultaneously helping you use it effectively.
Tip 1: Schedule Time Regularly to Perform Research
One of the most common complaints from business owners is that they don’t have time to do competitive intelligence. They also complain that they don’t have time for market research, marketing and promotions, and you name it – they don’t have time for it. Every entrepreneur, business owner and executive is faced with this problem. Honestly, have you ever had a day in which you just had oodles of free time? Probably not. The best way to overcome this problem is to block off competitive intelligence time on your calendar as you would an appointment with a prospect or an important meeting. Block off at least one hour a month, and preferably one hour every other week. This should give you some uninterrupted time to do some internet research and begin your competitive intelligence-gathering efforts.
Tip 2: Keep a List of Competitors Handy for Future Research
One time-saving tip I like to share is the handy spreadsheet; keep a list of competitors on your spreadsheet for future reference. Include the date last researched, the name of the competitor, and the URL of their website, and leave the last column blank to type in any research notes. This ensures that each month, when you sit down to conduct your competitive intelligence work, you’ll have the list handy and won’t need to reinvent the wheel.
Tip 3: Listen to Your Customers When They Mention Other Companies
Your customers are an invaluable resource of information about your competitors. If they mention that someone else does the same thing for cheaper or better than you do – note the name. That’s a competitor. Whenever I get a call from a prospective customer, I always ask, “How did you hear about us?” Often they will mention they visited a competitor’s website first and then came to us, or they used a competitor’s services and weren’t happy with either the price or the results, so they are seeking a new vendor. The companies, products and individuals they mention may be competitors, and provide you with great information to start your research-gathering efforts.
Tip 4: Track Products and Services, Messages and Offers
Many people make the mistake of simply tracking the overall efforts of their competitors. It’s important to note not just the direction the competing company is headed in, but what new products and services they are offering. Look at the messages they are using to describe their products and services, and any prices, sales or special offers to entice customers to buy from them. Are they retiring programs? Adding new ones? Touting research projects? Offering special events or announcing participation in a trade show? Each of these pieces adds up to the big picture of the activities of your competitor, and merits tracking and monitoring.
Tip 5: Sign Up for Competitors’ Emails and Social Media
To make your job easier, sign up for your competitors’ press releases, email newsletters and announcements, and major social media sites. You’d be amazed at how much they share with their customers, information that you can obtain freely and publicly. You can even set up a Google Alert to monitor new information and articles published about them.
Tip 6: When You’re Stuck Looking For Information, Search on a Key Executive’s Name
Here’s a useful trick I learned when researching an industry for which there was little published information about industry revenues, market growth, demographics and more; use a key company executive’s name as the search term and see what pops up. In my specific example, the executive had an unusual last name, and when I typed her name into the search engine, the result was several articles in which she was quotes about the detailed demographics of the industry I was researching. If you know the names of your competitor companies, then you can find out the names of key executives. To find any interviews they may have participated in, search their names. You may unearth some golden nuggets of information.
Tip 7: Examine SEO and Internet Marketing Efforts
Take a few minutes to examine any search engine optimization (SEO) elements your competitors may have put into place on their web pages. While a complete discussion of every potential method and element is beyond the scope of this article, there are many good resources online offering advice and suggestions for what to examine and how to find the information. For example, you can plug any URL into the Google Keywords Analysis Tool and the tool will attempt to extrapolate the keywords from the page. A cursory examination of the HTML code on any web page uncovers any meta tags in place, and using your favorite search engine, you can read your competitors’ page descriptions. Learn as much as you can about SEO and use this knowledge both to empower your own internet marketing efforts and to help you uncover your competitors’ level of SEO fluency.
Tip 8: Don’t Fall Into the “Me Too” Trap
One of the pitfalls of conducting competitive intelligence is assuming that what you see your competitors doing is the ‘right’ or ‘best’ way of doing things. If the competition is running ads on certain websites, the company owner feels he must, too. Beware of the “me too” trap and of copying anything, even the smallest thing, your competitors are doing. First of all, you don’t know if what they are doing is successful; they could be failing miserably at their efforts, not generating any sales or leads from their campaign even if you happen to like it. You don’t have access to their results, so you don’t know what is working and what isn’t. Copying anything they’re doing could be dangerous. Why make your business into a poor copy of another? Instead, focus on how you can improve your business, products or marketing efforts based on what you learn during the competitive analysis. Can you add new features? Better service? Focus on your own efforts and avoid the ‘me too’ trap.
Tip 9: Avoid Pricing Wars
Another trap many novices fall into is getting into a pricing war with competing businesses after seeing their prices. Many business owners realize that their prices are higher than the competitions’ and panic, thinking that by lowering their prices they will beat the competition and increase their own sales. You may increase your sales but unless you can decrease your costs, you’ve also just decreased your profit margin. And how much of that can your business withstand? What if your competitor decides to lower prices further – can you afford to keep lowering yours? Can you afford to set your customers’ expectations around lower prices?
Tip 10: Use the Information to Choose Your Strategy
After completing your competitive assessment, use the information you’ve uncovered to establish your own marketing strategy. Strive to improve your products, promotions, and service, always focusing on what you can do better, more efficiently or less expensively (while still maintaining margin) than your competitors.
Focus on your own business strategy, and decide for yourself how you are going to position your business in the marketplace in light of what you’ve learned. The result may be a competitive business, one that acknowledges competition without being a reactionary to the competition. Be the leader, not the follower, and use competitive intelligence to your advantage.