Unveiling your masterpiece: Find out how to keep an eye on the competition before showing the world your sales and marketing strategies.
Feb 1, 1998 12:00 PM, Richard G. Ensman, Jr.
Hear the term "competitor intelligence," and you may visualize sinister activities. Typical competitor intelligence gathering techniques, however, are not at all like this; they're based on common- sense research principles, and they usually involve public information.
Competitor intelligence is critical to a business' success. Only through knowledge of your competitors' products, market penetration and strategies can you effectively position your own products and services in the marketplace.
A variety of information about your competitors is available at your fingertips. As a starting point, know your trade. This means reading industry and local business publications and listening to competitor scuttlebutt in your community.
To continue your investigation, inspect your competitors who advertise in both consumer and trade media. Pick up literature your competitors make available at public outlets. You'll learn about their product line and capabilities. Scrutinize your competitors' help-wanted ads in the newspaper to learn about employment trends.
Don't overlook public directories, such as your city directory or trade directories. Some offer clues to the size and scope of competiting businesses. Consult your local chamber of commerce or trade association to discover the scope of activity in your field. Between your own knowledge and the judicious use of business statistics, you can often estimate competitors' market share. Visit the local public library to discover if any public histories or vertical file material is available on your competitors.
Consult public documents. Information on corporate officers, mortgages, transfer of properties, civil suits, real estate holdings, and licenses and permits are usually public information. If your competitor does business with public entities in the United States, you can probably obtain bids, proposals and contract information on past business relationships by filing freedom of information requests.
If you're not able to secure sufficient information about your competitors from readily available public sources, use today's computer technology. Most major online services provide electronic clipping services for downloading articles about your industry. If you want to limit your search to local sources, you can subscribe to a local or regional clipping service.
Examples of such electronic services are: Dun & Bradstreet (www.dbisna.com), Hoover's (www.hoovers.com), Dow Jones (www.dowjones.com), Infotrieve (www.infotrieve.com), American Business Information (www.abii.com), PR Newswire (www.prnewswire.com), LEXIS-NEXIS (www.lexis-nexis.com). ABI/Inform, which holds a data base of thousands upon thousands of articles about specific products and companies (as well as non-business information), is available through online services and many public libraries.
Consider a general Internet search. Using one or more of the popular search engines, scan the Web for key words relating to your industry - usually the names of competitors or products. Check industry-specific electronic bulletin boards for comments about competitors; here anecdotes, advice and information about competitor strengths and weaknesses might be available from your own peers, competitor customers and even employees of competitors.
Internet information drawn from paper databases, such as credit records or electronic reprints of published articles, is usually quite accurate and often very thorough. The quality of information contained on the Web, in chat rooms and on bulletin boards, however, varies considerably.
At times, because of the intensity of the competition you face or the amount of money you have riding on a particular market decision, you may want firsthand information. You can often obtain this simply by watching your competitors.
For starters, become a customer of your competition if you can. Buy their products and analyze them. If your competitor is a publicly held company, buy a few shares of stock and you'll receive a plethora of printed information, and you'll have the right to attend the annual shareholders meetings.
Go further and conduct a formal competition survey. Call or write your competitors, requesting product and pricing information. Observe the speed and nature of the responses you receive and the content of any ensuing contacts your competitors make. Consider a service analysis, using a mystery shopper or mystery customer. This shopper, a trained employee or consultant, can visit or call competitors with pointed questions about product quality, delivery, past performance or other issues. The answers will often reveal information about your competitors and their philosophy, product performance and market strategies. Observe the amount of traffic at key times during the week, the number and sources of delivery trucks going in and out of their parking areas and the responsiveness of service people. This technique may not be worthwhile for most small- to mid-sized firms.
At trade shows, stop by your competitors' booths. They'll be putting their best feet forward. Pick up literature and observe product displays. If you notice that your competitor is making a presentation at a trade meeting, attend.
If you want to study the competition in even greater depth, visit your competitors' places of business and conduct your own behavioral analysis studies. Observe things like employee eye contact, interpersonal interaction, questioning style and sales techniques. Your observations will tell you a lot about competitors' approach to sales. If you observe closely enough, you can roughly estimate the competitor's traffic, purchase volume and inventory turnover and actually create theoretical profit-and-loss statements and balance sheets on these competitors. This sort of in-depth observation might require the assistance of an expert.
At times, you may need in-depth qualitative information on your competitors which is obtainable only by talking with other people. Make a list of questions you're trying to answer. Pose those questions to your peers or to the peers of your friends and colleagues in other industries. Next, move to your suppliers, who may have information about your competitors. Ask friends in the banking, real estate and insurance professions - people who often have insight into the workings of a vast array of businesses. Identify past employees of your competition and arrange debriefing interviews. Don't hesitate to chat with prospective employees about their experiences with competitors.
If you'd like to assess public or customer attitudes toward your competitors, set up focus groups of consumers to explore. If you're interested in beginning a professionally designed focus-group program, a market research firm can help. Finally, if you need a substantial amount of information, consider retaining a competitor analysis consultant who can conduct statistical research on your competition, as well as in-depth interviews with the competitors, customers and other individuals who know the field.
As you ponder these business intelligence opportunities, remember that you need not pursue all of them. The secret is to identify a select few intelligence-gathering strategies, and work them into your day-to-day routine. The result: You'll learn how to stay a step or two ahead of your competition, and you'll learn more about your own hidden business potential as well.
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