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Competitive Intelligence: The Sneaky Business of Spying on Your Competitors Part 1

Corporate espionage in real life? No, we’re not about to hire a secret agent to set up an outfit in the building across from your rival’s office. We don’t have to install spy cameras and eavesdrop on business meetings. We’re not going that far! But, let me tell you, you should still do the proverbial black suit and set up an ongoing mission to regularly keep a close eye on your competitors. You shouldn’t be doing anything less if you want your business to dominate the market. #MissionPossible

We love talking about competitive intelligence (CI) here at Craft - data and analysis are our bread and butter - so check out links to other materials on CI at the end of this blog.

Quick Case Study: Apple

Circa 2000, Apple was a successful computer company with a small market share, a far cry from the behemoth tech company they are today. The company’s fate changed when Apple introduced the iPod in 2001. The product flew off the shelves! It sold two million in 2003, ten million in 2004, and forty million in 2005.

But the brilliant Apple execs always had a finger on the pulse of their competition. They didn’t relax at their phenomenal success. They quickly noticed that people were carrying an iPod and a cellphone together. As cellphones started carrying music, they knew that if people would choose just one device to bring, it wouldn’t be the iPod.

Apple had no business with mobile phones; they had zero credibility in this field, but they had to get ahead of their product’s potential killer. So Apple locked down a whole floor at their Cupertino HQ to create Project Purple. The brilliant engineers who agreed to work on this super secret operation were not allowed to talk about the project to anyone until a couple of years later…

In 2007, Apple launched the iPhone, the single most influential piece of consumer technology of our time.

What is Competitive Intelligence

Competitive intelligence (CI), or “keeping a finger on the pulse of your competition,” is all about (a) understanding your competitors, (b) inspecting their strategies, and (c) anticipating their next moves amidst shifting market trends. CI involves gathering data about your competitor’s products, services, customers, and marketing efforts.

But data is just half of the equation. The other half is analysis. It’s about using the information you gathered to (1) identify gaps in the market, (2) find opportunities to improve your own product and/or service offerings, and (3) develop strategies that will set you apart from the rest. It's about leveraging your strengths and understanding your weaknesses to position yourself as the best option for your target audience.

Needless to say, competition is fierce in today's world. An ongoing CI program is no longer just a nice-to-have but a must-have for any organization looking to stand out and thrive in this hyper-competitive business landscape.

The Importance of Competitive Intelligence

That being said, let’s expound more on some key reasons why competitive intelligence is so important for business growth:

1. Staying ahead of the curve

Question: How are you able to make sure you’re a recognized leader in your industry?

Answer: You have to be the one with innovative solutions that meet the ever-changing demands of your customers. Are there new trends affecting consumer behavior? Have new technologies been discovered that could potentially alter future engagements with your brand? Be on high alert for these industry trends by keeping tabs of your competitors’ product offerings and marketing strategies.

2010 saw the rise of health-conscious millennial consumers. They were intrinsically hostile to fast-food, demanding healthy options and not minding the higher price tags that came with the “organic” and “free range” stickers. In an attempt to assuage the hate, fast-food companies were eager to launch new products slapped with health-related communications strategies. The soda industry wouldn’t get left behind. In 2011, Pepsi launched Pepsi Next in a green can hoping to attract this unstoppable new cult. Coca-cola saw this and also released their own version of low-calorie soda in a green can, the Coca-Cola Life.

2. Identifying areas for improvement

A good business is not afraid to admit that even its best offerings can still be subject to change. In order to identify areas of improvement in your own organization, it pays to have a look at your competitors' strengths and weaknesses and compare it with your own.

In our previous example, Coca-cola discontinued Coca-cola Life in 2017, following the discontinuation of rival soda, Pepsi Next, effectively ending the Green Cola Wars. In its stead, Coca-Cola refocused on Coke Zero and rebranded it to Coca-Cola Zero Sugar as their competitive intelligence research revealed that many people actually didn’t know that Coke Zero meant it contained zero sugar. Imagine that.

3. Winning amidst sudden market shifts

Market shifts are an assumed no-surprise surprise by now. Having the business topography changed forever by the pandemic in 2020, all surviving and thriving businesses know that the ability to adapt quickly is now the gold standard.

As businesses anticipate changes, more and more companies are now innovating in response to an imagined future. This is good for advancement in general, but challenging for organizations that seek to set trends and not just follow them. In order not to get left behind, the key is to constantly be in the know of what others in your industry are doing and adjust (or pivot) if needed.

In 2020, the pandemic had an incredibly negative impact on Uber's ride-hailing business as people stayed home and avoided non-essential travel. Meanwhile, DoorDash and Grubhub were constantly overbooked everywhere. Taking the hint, Uber shifted its focus to its food delivery service, Uber Eats.

4. Identifying new market opportunities

Competitive intelligence helps you identify new market opportunities that you may have easily missed or otherwise not considered. By observing closely what your competitors are paying attention to and where their investments are going, you can identify emerging niches and gaps in the market that you can capitalize on.

In the B2B space, cloud-based solutions rocked the SOA-world circa 2006. SOA or service-oriented architecture relied on on-site servers to host company data. But with an eye on the future, Amazon Web Services (AWS) began offering cloud-based IT infrastructure services. It took a few years, but soon, it became apparent that businesses had to make the switch to cloud-computing in order to meet the needs of modern business management. Armed with this information, Oracle developed Oracle Cloud Infrastructure, a solution that made the migration from SOA to the cloud super easy.

5. Mitigating risk

CI can help mitigate risk by providing you with a deeper understanding of the market and the competitive landscape. By anticipating your competitors' actions and identifying potential threats, you can take proactive steps to protect your business and minimize your exposure to risk.

In the early 2000s, Blockbuster was the dominant player in the video rental market. However, the rise of online streaming services (like Netflix) paired with the increasing ease of access to the internet, meant Blockbuster was losing customers left and right. If Blockbuster had a CI program in place, they could have caught how the internet was taking over the entertainment industry by storm. Unfortunately, they failed to do so, they remained stubborn, refused to adapt to the times, and the company eventually went bankrupt in 2010. (By the way, did you know Blockbuster had the opportunity to buy Netflix and passed on it saying no one would want to wait for their DVD to arrive in the mail!)

Around the same year, Nokia was still king of mobile phones, with its Symbian operating system powering many of the world's smartphones. However, the rise of Apple's iPhone and Google's Android operating system started to pose a significant threat to Nokia's market share. With a CI in place, Nokia could have identified these threats, but when a brand has been dominating the market for so very long, it could be hard to admit that the world is changing away from you. Maybe Nokia saw this, but they, like Blockbuster, decided to stick to what they know, thinking businesses would stay loyal to a trusted brand. Turns out, they were wrong, and the company eventually sold its mobile phone business to Microsoft in 2014.

These are brands that we loved and we felt sad to see them go, for sure. But I hope this gives you enough reason to really consider establishing a good CI program within your organization.

Practical Examples of Competitive Intelligence

Now that we’ve established the importance of CI, you’re probably hyped to know what kind of information should you be looking out for. Well, allow me to decode the secrets:

1. Changes in Messaging and Positioning

It is normal to have similar value propositions amongst competing brands within an industry. This is why whatever little differentiation your product can offer is extremely important. Let your business stand out by defining and expressing your unique competitive edge.

But watch out - all your competitors are likely doing the same. So as you try to keep up with the relentless market shifts, keep track how your competitors adapt to the times. The longer you take to detect and analyze their changes, the more likely you'll be caught off guard.

Your competitors' homepages and product pages are great starting points for this. Any shifts in their core value proposition will be reflected in these locations (and probably other places too).

But it's not just about being aware of changes, it's about inspiring action across your organization. Everyone who communicates the unique value of your product, from sales to marketing to customer success, needs to be notified when a competitor initiates a change. Sales and customer service, in particular, must be prepared to address any new objections or talking points from prospects and customers that may arise as a result of these changes.

2. Changes in Pricing

In a competitive marketplace, pricing plays a critical role in influencing buyers' decisions. Your potential customers are always operating within a certain budget, and sometimes, even if your product offers unbeatable ROI, you may lose out to a competitor because they have a lower price point.

It's critical to keep track of where each of your competitors stands when it comes to pricing. You don't want to be caught off guard when a prospect goes dark or when a customer churns.

Your competitors may have their pricing and packaging details available on their websites. If not, you'll need to gather field intelligence to stay informed.

Make sure that your sales and customer success teams are aware of these changes. It may also be wise to notify product management and executive leadership if a competitor makes a pricing change that indicates a shift toward a new customer segment. This information will help those in charge of product and business strategy make informed decisions.

3. Changes in Leadership

Keep an eye on your competitors' leadership changes because these shifts can signal important strategic developments ahead. For example, if one of your rivals hires a new SVP of Sales, it's likely that they're planning to take their sales team to the next level, which could mean more competition for your sales reps.

Similarly, if one of your competitors suddenly loses their Chief Product Officer, it could be a sign of internal turmoil over their product roadmap. By keeping tabs on these kinds of changes, you can better anticipate how your competitors may adapt and adjust their strategies to remain competitive.

So, going back to your organization, ask yourself what the major consequences of these changes might be, and who needs to be prepared for them. If your rival hires a new SVP of Sales, your sales and customer success teams will need to be armed with the right collateral to combat new talking points and win competitive deals. You may also need to brief your own leadership team to ensure that you're maintaining a healthy bottom line.

4. Check out news coverage

Always be on-the-know of any news coverage involving your competitors. Whether it's good, bad, or neutral, it can provide valuable insights into their strategic direction. For instance, if a competitor announces a partnership with a trade association, it could signal a shift in their branding and demand generation strategy.

But news coverage isn't just about identifying threats. It can also be an opportunity to reinforce your own value proposition. If a competitor experiences a data breach and earns negative coverage, it can be a chance to showcase your superior security.

To take action, you'll need to assess the situation and determine the stakeholders who need to be alerted. If it's a trade association partnership, sales, and marketing will need to adjust their messaging. If it's an SEC filing, executive leadership should be informed. And if it's a product malfunction, everyone from sales and marketing to product management and customer success should be aware and ready to respond. Keep your finger on the pulse of your competitors, and you'll be better positioned to adapt to changes in the market.

5. A/B Testings on your Competitors’ Websites

Keeping an eye on your competitors' website A/B tests can offer valuable insights into their marketing strategy. When a competitor tries out a new approach, it could mean a shift in lead generation and qualification. Furthermore, analyzing the results of these A/B tests can also provide valuable information about your target audience.

For example, if a competitor's "Get a Demo" CTA performs better than "Start Your Free Trial," it suggests that demos are more appealing to your audience.

Marketing is typically the primary stakeholder when it comes to website A/B tests. However, the specific marketers who need to be alerted will depend on the details of the test. If a competitor experiments with a new homepage CTA, demand gen specialists should be informed, while content specialists should be involved if there's an alternative resource page design.

6. Customer Reviews

What’s poppin’ on the reviews section of third-party websites? Get the tea! Get in on the juicy details! This is how young people say it these days, right?

Reading honest customer reviews of your competitors’ products and/or services gives you incredibly valuable insights into their strengths and weaknesses, which you can then analyze to identify market opportunities and threats.

Customer reviews are so loaded with priceless information, it would so foolish for any business to ignore this beautiful piece of public info.

If you discover that a competitor is failing to address a specific pain point, use this information to guide your long-term strategic planning. If what you're offering addresses the problem, emphasize it as your strength and edge against the others. Let your marketers incorporate this intel into their positioning and messaging. Weaponize good and bad reviews to position yourself for success in a crowded market.

To be continued…

There are so many layers to competitive intelligence that it’s impossible to cover all the good points in one single article. Watch out for Part 2 where we talk about more practical examples of CI information and we will also explore practical (and legal) ways to keep an eye (spy) on your competition.

For now, I leave you with a powerful quote from the magnificent Wayne Gretzky, National Hockey League's all-time leading goal scorer:

“You need to skate to where the puck will be, not where it has been.”

Don't let your competitors outpace you any longer - reach out to Craft Marketing and Branding today to learn how we can help.

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