Competitive Intelligence (CI) has technically been around since the 1980s. What was once considered an expert strategy employed by a select few corporations is now an accessible, powerful tool for businesses of all sizes in many industries.
Today, failing to implement competitive intelligence strategies can put you a step behind your competitors at best, and at risk of losing market share at worst.
The good news? There are some great first steps you can take to get started with CI if you haven’t yet and strategies for enhancing your efforts if you’re already doing it.
- Competitive intelligence analyzes the entire competitive landscape: company, competitors, consumers, market trends and more.
- 94% of companies are investing in CI; those who don’t risk being left behind.
- Competitive intelligence minimizes decision making risks and supports strategic moves like product launches, new market entries, and rebrands.
- There are a number of competitive intelligence software tools available and companies should choose one that meets their specific needs.
- Human intelligence can also be used to gather CI information through real conversations, but companies should always use third party services to do this.
COMPETITIVE INTELLIGENCE: A QUICK OVERVIEW
Competitive intelligence is the collection and analysis of market and competitor data that companies use to make decisions and build strategy. CI is important because it gives companies a comprehensive, holistic view of their entire industry and all of its players. It looks beyond what goes on internally at their own organizations.
It’s essentially the difference between knowing where you land and flying blind. Without CI, you know what your company offers. Anything beyond that, like how you stack up to competitors, where the gaps are in the markets, and what kinds of marketing strategies are working best for your target customers, are all very much a guessing game. CI can also tell you what opportunities are on the horizon.
To implement CI strategy, companies use both manual and automated processes (or a combination of both) to conduct industry research. Sources can include company websites, job postings, social media accounts, press releases, annual reports, advertisements, and employee conversations. But it’s certainly not limited to those, and competitive intelligence can vary depending on the industry and organization.
WHY USE IT?
Smart CEOs don’t implement a strategy without knowing how it will benefit the company and what kind of ROI it will produce. So, let’s dig into how competitive intelligence will add value for your business.
A quick and impactful reason is that 94% of businesses are investing in CI. Put simply, if you don’t invest in CI for your company in some capacity, you’ll absolutely fall behind the competition. They’ll know more about the industry and they’ll know more about you — and how to gain a competitive edge.
The trend is the same across industries. In a survey conducted by Crayon in their annual State of Competitive Intelligence report, more than 80% of respondents indicated they thought their industry had gotten either “somewhat more” or “much more” competitive. That percentage increased between 2019 and 2020.
In such a competitive environment, it’s important to understand how your company fits into the landscape and what you can do to optimize your operations, strategies, and resources to attain the best results.
Using competitive intelligence, you can:
- Identify market gaps and analyze potential new markets
- Learn about competitor strategies and see what’s working
- Minimize risk by making data-driven decisions
- Predict consumer and competitor trends and behavior
- Use insights to improve internal processes and strategy
WHEN ARE THE BEST TIMES TO USE COMPETITIVE INTELLIGENCE?
Competitive intelligence is most effective when it is practiced on an ongoing basis over a long period of time. When companies have a large information set over a wide range of time and scope, they’re best able to use that information to make informed decisions.
This becomes extremely valuable when it comes time to make an important business decision or strategic move, including:
- Entering a new market
- Launching a new product or service
- Opening a new business unit
- Launching a new advertising campaign
One of the most important things that competitive intelligence provides is context. Really data-driven, analytical, informed context can help CEOs lead their companies with confidence knowing their decisions and strategies are backed by reliable information.
COMPETITIVE INTELLIGENCE TOOLS
Competitive intelligence tools take the bias and human error out of the process, giving you the most valuable and reliable information possible. There are two main ways you can collect competitive intelligence information: through AI-powered software programs or through human intelligence.
Companies can also implement human intelligence strategies that involve direct contact and conversations with people who can provide competitor information (such as former customers and employers or vendors). In this case, it’s highly recommended that companies hire a third-party service to avoid bias and maintain an ethical analysis.
One common and accurate description of competitive intelligence is that it’s the difference between just getting to the finish line and getting there first. CEOs who implement CI are making a decision to lead instead of follow, setting their organizations up to operate a step ahead of the competition and operate beyond the industry status quo.