The ethics of competitive intelligence

How far are you willing to go to collect competitive intelligence for your company? When does acceptable information gathering turn into something more sinister? How do you maintain a strong sense of ethics when you’re trying to create a competitive advantage?

To succeed in competitive intelligence, you need a relentless drive to crush your market. You consider every angle so you’re a step ahead of other companies. But how do you know what strategies are fair to surface these advantages? There’s a fine line between being creative and immoral. Every CI professional should feel this push and pull to do everything they can to create a competitive advantage without resorting to unethical and potentially illegal behavior.

The tricky part about this is that there are no set standards. While I like what the Society of Competitive Intelligence Professionals has put together, I’m not sure how well known it is. Each company and team generally operates under their own sense of morals. What you may consider highly unethical a competitor may see as fair game.

Admittedly, my approach is fairly conservative. I tend to think that companies overvalue hyper-specific pieces of intel and miss the bigger picture. I believe that with a strong CI foundation that is rooted in ongoing quantitative and qualitative analysis, you don’t need to take nefarious paths to squeeze intel from your competitors.

The question that I always come back to when deciding whether or not I should engage in a CI tactic is this:

If I found out that a competitor did this to Sprout, how would I react?

Generally speaking, the answer to this question guides my point-of-view on competitive strategies and tactics. If I say to myself, “gee, that’s pretty shitty and misleading that they did that,” then I wouldn’t do it to them. If my reaction is, “I never thought of of that and need to incorporate this into my playbook right away,” then that’s fair game.

Is this a foolproof science? Absolutely not! Ethics in any profession is a tough subject, and I believe in CI it is particularly challenging. But it is critical that we are always honing our craft with fair and honest approaches, and that means we need to always question the ethics of our actions.

I want to address two specific CI topics that come up commonly in SaaS. The first is pretexting. Pretexting is more closely associated with the security industry, but it definitely applies to CI professionals.

Given the proliferation of free trials and freemium go-to-market strategies in SaaS, pretexting has become increasingly more common. Sign up for a free trial using a fake name and email and, boom, you’ve got access to your competitor’s platform. It may seem harmless, but it opens up all kinds of questions about access to IP that you really don’t want to deal with. I’m definitely no expert when it comes to the legality issues, but I’m aware enough to know that if you even have to question whether something may break a law or not, you probably shouldn’t be doing it.

Most SaaS vendors outline in their terms of service that use of the software by a competitor is prohibited. We have it in our terms of service at Sprout. Despite that we have several competitors that constantly open up new trials under different emails and slight variations of their names. So instead of doing my normal job, I’m forced to play goddamn whack-a-mole with these trials because bottom-feeders can’t resist it.

I cannot emphasize enough how irritated this makes me. And you might be thinking to yourself, “this doesn’t seem like that big of a deal.” But I simply don’t agree. Faking who you are to circumvent controls put in place to prevent this type of behavior is cheating and, frankly, it’s bullshit.

With SaaS companies that don’t offer free trials, it becomes a little trickier to get this level of product detail. But I have heard people advocate for creating a fake LinkedIn profile and company and making connections to make it look authentic so they can request a competitor demo and go through their sales cycle.

Don’t. Fucking. Do. This.

I shouldn’t even have to say this. But it happens and I cannot describe how irritated it makes me. Not only is it incredibly unethical, it is a tremendous waste of sales and marketing resources for your competitor that they would have no way of avoiding.

I don’t want to belabor this point further because if you can’t understand why this is wrong, you honestly shouldn’t be in this profession.

The second situation involves your prospects and customers. Often times our customers will want to show us their workflows in their current platform and we get a peek behind the curtain. Or maybe they’ll send us a report and ask if we can duplicate it.

If your customers are proactively sharing this information with you, that’s perfectly okay in my book. The decision is solely in their hands and that’s their prerogative if they pass it along.

Where it gets tricky is when they mention that they use a competitive product and you ask them to share that info with you. Or you pressure the customer to feed you information about what doesn’t work with your competitor’s technology.

I believe that you can ask the right questions to get the customer to provide you with more information without putting them in a position where they feel obligated to share this intel with you. You shouldn’t be putting your prospects and customers in a situation where they have to weigh these ethical considerations themselves.

There are a number of other duplicitous ways to collect CI that I haven’t touched on but may in a future blog post. Here are a few examples:

• Applying for jobs at competitors that you have no intention of taking
• Asking a coworker to do the same thing
• Badge-swapping at a conference or tradeshow
• Having customers sign up for demos and feeding info back to you

Maybe you’re reading this and thinking that I’m being too strict and missing opportunities to put Sprout in a better position. But I’m here to tell you that just isn’t true. You can be successful without compromising your ethics. In fact, our own results prove it.

In Sprout’s Q2 earnings call, our CEO, Justyn Howard, specifically called out the increases in ARR and win rate percentage against our competitors across nearly every segment compared to the previous four quarters.

Our CI team is leading this charge while establishing a strong ethical stance on how we source and collect competitive information.

You don’t need to resort to questionable tactics to build a successful competitive intelligence program.

We’re living proof of that.

Competitive intelligence gathering is a skill. Impersonating a fake person or company or forcing your customers to violate their own ethical codes aren’t skills. These are just two common examples, but there are plenty of other tactics that resemble these. The key is ensuring that you know what is ethical and what isn’t and you’re holding your team accountable to those standards.