Competitive intelligence is an absolute necessity in business today
This is the first article in a series on competitive intelligence. For the first article on why I’m writing this series, please check out the previous post.
When I was working at the PR agency, I was supporting the launch of a new product for one of the world’s largest software developers. We’d spent weeks working with our in-house PR contacts, product managers, marketing teams and sales teams to prepare all the materials that we needed for the public launch. After we had sign-off from the executives and legal, we were ready to go.
There was just one little problem: the positioning and tagline for the product was basically identical to that of our largest competitor’s product, and nobody seemed to notice.
It didn’t appear that anyone took the basic step of Googling how our competitor talked about their version of the product. We’re not talking about super sophisticated competitive intelligence (CI) work here. But it exemplifies why even the bare minimum of competitive research matters.
The result of the launch? A product brought to market with little to no differentiation in messaging or positioning. A wasted opportunity for our client. But one of my first lessons in why CI is so critical for a business.
And while it should come as no surprise to you that I, a CI professional, would advocate for every business to invest time and resources in it, here are the reasons why I believe it is so critical today.
The speed of business has never been faster
Buyers today have unprecedented access to information, which impacts how, what, where and why they make purchasing decisions. And these decisions can change rapidly.
Take the fickle world of fast fashion. What consumers have wanted from one season to the next has changed so quickly that many leading companies in this space have struggled to keep up despite pioneering the concept. Buyers have hundreds of retailers to choose from, several different ways to purchase (brick and mortar, e-commerce via web or mobile app, social) and easy ways to find exactly what they are looking for that decisions and tastes can change over the course of weeks. Competitors that are succeeding in this challenging space deserve careful evaluation.
Or take the social media management space that Sprout plays in. When it first emerged, buyers prioritized platforms that were packed full of features at the expense of usability. However, over the years, buyers soon realized that it didn’t matter how powerful a tool was in theory if teams wouldn’t use it. Now, buyers prioritize user experience as much as they do functionality, which was an unfathomable thought even a few years ago. This has led to stagnating growth for some of our competitors and a lesson in what we need to avoid.
Finally, the changing landscape of entire industries can lead to new market opportunities. With Instagram’s ascendence over the last half decade, the concept of social influencers for brands has led to the creation of dozens of SaaS companies that help teams manage the brand relationship with the influencer. Ten years ago, the concept of an influencer meant something significantly different than it does today. But the market’s changed and these companies capitalized on that shift. CI teams should be responsible for monitoring these opportunities and threats to their own business.
Without an individual or team committed to tracking buyer changes, how competitors are responding and how these trends are creating new market opportunities, a business risks falling behind in the market.
There’s more information–for better or worse–than there’s ever been before
Competitive data that’s available has proliferated, and that is both a blessing and a curse. For those that are committed to incorporating CI into their corporate strategy, your teams will have an enormous amount of information available to evaluate.
However, the downside is that there is arguably more than they could ever hope to consume. The challenge becomes determining what is valuable vs. what is just noise.
CI teams must be responsible for filtering out the noise and delivering only the core insights that are business-critical. What may seem like a golden nugget may turn out to be a dud once it is cross-referenced with other sources. If a business isn’t taking the time to sift through this information before acting on it, there’s a huge risk that the intel isn’t 100% accurate.
In SaaS, let’s take the topic of competitive pricing, which is an invaluable piece of intel. These contracts are often heavily negotiated, so the price a customer pays can end up being very different from what’s listed on the website (if there’s anything at all). Additionally, every buyer and budget is different, which impacts how a vendor will price their final offer. So if we get our hands on a competitive price in one deal, we have to recognize that this piece of intel, while valuable, isn’t necessarily indicative of our competitor’s overall pricing strategy. If we rushed to make changes off that single piece, we’d be making an enormous mistake. Our job is to gather all the relevant data, look at it holistically and determine what is most important.
With the amount of competitive information available today on the web and through buyer insights, companies can make properly informed decisions, but only if they’ve taken the time to qualify the data.
Nearly all business today is global in nature
In mid-2018, Sprout opened an office in Dublin, our first office in Europe. The overwhelming majority of my work up to that point was for North America only. I had never stopped to consider just how different the competitive landscape would be in Europe. But as we started hiring sales reps, it quickly became apparent to me that what was working in North America couldn’t be copied over there.
The competitors were different. The buyer trends were different. The buyer maturity was different. Sure, there were some similarities, but I knew right away that all my work that supported that team and market would need to change. It required starting from scratch, just like I did when I first joined Sprout, and collecting the intel I needed to support my efforts. The same has been true as we’ve expanded our footprint in both Latin America and Asia-Pacific.
When your business moves into new territories, your playbook must change. You need to do research on the key players and how large their footprints are. You need to consider how buyers will evaluate you, a newcomer, when they put you side-by-side with their local businesses. Just because you have a firm grasp on who your competitors are in your region doesn’t mean you can expect the same in a new one.
Almost every decision a buyer makes is a competitive situation
At the end of the day, the single most important reason a business should be investing in CI is simply that in today’s world, every choice a buyer makes is a competition whether they realize it or not.
Nike vs. adidas vs. Under Armour. Marriott vs. Hilton vs. Loews. Sprout vs. every other social tool (like I’m going to give our competitors free mindshare by saying their names? Not likely).
There’s very few instances where a buyer isn’t going to make the decision to purchase a product without directly or indirectly comparing it to a competitive alternative. And if your business isn’t understanding why they are making that choice and what your competitor is doing to influence it, you’ve already lost.
I cannot emphasize enough how important it is that CI is established as a discipline in companies. It doesn’t matter whether it is a team specifically devoted to it or a commitment from other teams to incorporate it into their everyday jobs (though the former is better). Hopefully it is clear why it has become such a necessity.
In the next article, I’m going to outline the various teams that benefit from CI and how you can deliver information that is relevant to them.
In the meantime, if you’re interested in talking more, shoot me a note at peter.mertens@sproutsocial.com to chat. I’d love to hear from folks that currently conduct CI and those that are looking to start.
