Gathering competitive intelligence can be a useful exercise that provides important information to guide your business and marketing strategy, or it can sit in a computer file and accumulate 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 flawed strategy setting. Worse yet, it can lead to something I call the “me too” syndrome where you end up pushing your business to a role model that is a poor imitation of a competitor rather than a rich, authentic representation of yourself. The following 10 tips for collecting and using competitive intelligence information effectively can help you avoid the pitfalls of collecting information about your competitors while helping you use it effectively.
Tip 1: Schedule time regularly to conduct research
One of the most common complaints from entrepreneurs 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 whatever, they don’t have time for that. All entrepreneurs, entrepreneurs and executives face this problem. Honestly, have you ever had a day where you had tons of free time? Probably not. The best way to overcome this problem is to block off competitive intelligence time in your calendar like you would an appointment with a potential client or an important meeting. Block out at least an hour a month, and preferably an hour every two weeks. This should give you uninterrupted time to do some Internet research and start 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 in your spreadsheet for future reference. Include the date of the last investigation, the competitor’s name and their website URL, and leave the last column blank for any investigation notes. This ensures that each month when you sit down to do your competitive intelligence work, you’ll have the list at hand and not have 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 someone else doing the same thing for less money or better than you, write down their name. That is a competitor. Whenever I get a call from a prospective client, I always ask, “How did you hear about us?” They will often mention that they first visited a competitor’s website and then came to us, or that they used a competitor’s services and were not satisfied with either the price or the results, so they are looking for a new provider. The companies, products, and people they mention may be competitors and provide you with great information to start your research-gathering efforts.
Tip 4: Follow up on products and services, messages and offers
Many people make the mistake of simply keeping track of their competitors’ overall efforts. It is important to consider not only the direction in which the competitor company is heading, but also the new products and services it offers. 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 withdrawing programs? Add new? Touting research projects? Offer special events or advertise participation in a trade show? Each of these pieces adds to the bigger picture of your competitor’s activities and deserves tracking and monitoring.
Tip 5: Sign up for competitors’ emails and social media
To make your job easier, subscribe to your competitors’ press releases, newsletters, and email announcements and to major social networking sites. You’d be surprised how much they share with their customers, information that you can get for free 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, look up the name of a key executive
Here’s a helpful trick I learned when researching an industry for which there was little published information on industry revenue, market growth, demographics, and more; use the name of a key company executive as a search term and see what comes 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 cited demographic details of the industry she was researching. If you know the names of her competitor companies, you can find out the names of the key executives. To find interviews they have participated in, search for their names. You may uncover 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 that your competitors have put on their web pages. While a full discussion of each method and potential item is beyond the scope of this article, there are many good resources online that offer tips and advice on what to look for and how to find the information. For example, you can connect any URL to Google’s keyword analysis tool and the tool will try to extrapolate the keywords on the page. A cursory examination of the HTML code on any web page uncovers the meta tags in place, and using your favorite search engine, you can read the descriptions of your competitors’ pages. Learn as much as you can about SEO and use this knowledge to both power your own internet marketing efforts and help you discover how SEO fluent your competitors are.
Tip 8: Don’t fall into the “me too” trap
One of the pitfalls of doing competitive intelligence is assuming that what you see your competitors doing is the ‘right’ or ‘best’ way of doing things. If the competition is posting ads on certain websites, the business owner feels that he should too. Beware of the “me too” trap and copying anything, even the smallest thing, that your competitors are doing. First of all, you don’t know if what they are doing is successful; they could be failing miserably in their efforts, not generating any sales or leads from your campaign, even if you like it. You don’t have access to your results, so you don’t know what works and what doesn’t. Copying whatever they’re doing could be dangerous. Why make your business a bad copy of another? Instead, focus on how you can improve your business, products, or marketing efforts based on what you learn during competitive analysis. Can you add new features? Best service? Focus on your own efforts and avoid the ‘me too’ trap.
Tip 9: Avoid price wars
Another trap many newbies fall into is getting into a price war with competing companies after seeing their prices. Many business owners realize that their prices are higher than the competition and panic, thinking that by lowering their prices they will beat the competition and increase their own sales. You can increase your sales, but unless you can reduce your costs, you will also have decreased your profit margin. And how much of that can your business handle? What happens if your competitor decides to lower prices even 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 you complete your competitive assessment, use the information you’ve discovered to establish your own marketing strategy. Strive to improve your products, promotions, and services, always focusing on what you can do better, more efficiently, or less expensively (while 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 market in light of what you have learned. The result can be a competitive business that recognizes the competition without reacting to it. Be the leader, not the follower, and use competitive intelligence to your advantage.