Unveiling your masterpiece: Find out how to keep an eye on the competitionbefore 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 sinisteractivities. Typical competitor intelligence gathering techniques, however,are not at all like this; they’re based on common- sense researchprinciples, and they usually involve public information.
Competitor intelligence is critical to a business’ success. Only throughknowledge of your competitors’ products, market penetration and strategiescan you effectively position your own products and services in themarketplace.
A variety of information about your competitors is available at yourfingertips. As a starting point, know your trade. This means readingindustry and local business publications and listening to competitorscuttlebutt in your community.
To continue your investigation, inspect your competitors who advertise inboth consumer and trade media. Pick up literature your competitors makeavailable at public outlets. You’ll learn about their product line andcapabilities. Scrutinize your competitors’ help-wanted ads in the newspaperto learn about employment trends.
Don’t overlook public directories, such as your city directory or tradedirectories. Some offer clues to the size and scope of competitingbusinesses. Consult your local chamber of commerce or trade association todiscover the scope of activity in your field. Between your own knowledgeand the judicious use of business statistics, you can often estimatecompetitors’ market share. Visit the local public library to discover ifany public histories or vertical file material is available on yourcompetitors.
Consult public documents. Information on corporate officers, mortgages,transfer of properties, civil suits, real estate holdings, and licenses andpermits are usually public information. If your competitor does businesswith public entities in the United States, you can probably obtain bids,proposals and contract information on past business relationships by filingfreedom of information requests.
If you’re not able to secure sufficient information about your competitorsfrom readily available public sources, use today’s computer technology.Most major online services provide electronic clipping services fordownloading articles about your industry. If you want to limit your searchto 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 thousandsupon thousands of articles about specific products and companies (as wellas non-business information), is available through online services and manypublic libraries.
Consider a general Internet search. Using one or more of the popular searchengines, scan the Web for key words relating to your industry – usually thenames of competitors or products. Check industry-specific electronicbulletin boards for comments about competitors; here anecdotes, advice andinformation about competitor strengths and weaknesses might be availablefrom your own peers, competitor customers and even employees of competitors.
Internet information drawn from paper databases, such as credit records orelectronic reprints of published articles, is usually quite accurate andoften very thorough. The quality of information contained on the Web, inchat rooms and on bulletin boards, however, varies considerably.
At times, because of the intensity of the competition you face or theamount of money you have riding on a particular market decision, you maywant firsthand information. You can often obtain this simply by watchingyour competitors.
For starters, become a customer of your competition if you can. Buy theirproducts and analyze them. If your competitor is a publicly held company,buy a few shares of stock and you’ll receive a plethora of printedinformation, and you’ll have the right to attend the annual shareholdersmeetings.
Go further and conduct a formal competition survey. Call or write yourcompetitors, requesting product and pricing information. Observe the speedand nature of the responses you receive and the content of any ensuingcontacts your competitors make. Consider a service analysis, using amystery shopper or mystery customer. This shopper, a trained employee orconsultant, can visit or call competitors with pointed questions aboutproduct quality, delivery, past performance or other issues. The answerswill often reveal information about your competitors and their philosophy,product performance and market strategies. Observe the amount of traffic atkey times during the week, the number and sources of delivery trucks goingin 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 theirbest feet forward. Pick up literature and observe product displays. If younotice that your competitor is making a presentation at a trade meeting,attend.
If you want to study the competition in even greater depth, visit yourcompetitors’ places of business and conduct your own behavioral analysisstudies. Observe things like employee eye contact, interpersonalinteraction, questioning style and sales techniques. Your observations willtell you a lot about competitors’ approach to sales. If you observe closelyenough, you can roughly estimate the competitor’s traffic, purchase volumeand inventory turnover and actually create theoretical profit-and-lossstatements and balance sheets on these competitors. This sort of in-depthobservation might require the assistance of an expert.
At times, you may need in-depth qualitative information on your competitorswhich is obtainable only by talking with other people. Make a list ofquestions you’re trying to answer. Pose those questions to your peers or tothe peers of your friends and colleagues in other industries. Next, move toyour suppliers, who may have information about your competitors. Askfriends in the banking, real estate and insurance professions – people whooften have insight into the workings of a vast array of businesses.Identify past employees of your competition and arrange debriefinginterviews. Don’t hesitate to chat with prospective employees about theirexperiences with competitors.
If you’d like to assess public or customer attitudes toward yourcompetitors, set up focus groups of consumers to explore. If you’reinterested in beginning a professionally designed focus-group program, amarket research firm can help. Finally, if you need a substantial amount ofinformation, consider retaining a competitor analysis consultant who canconduct statistical research on your competition, as well as in-depthinterviews with the competitors, customers and other individuals who knowthe field.
As you ponder these business intelligence opportunities, remember that youneed not pursue all of them. The secret is to identify a select fewintelligence-gathering strategies, and work them into your day-to-dayroutine. The result: You’ll learn how to stay a step or two ahead of yourcompetition, and you’ll learn more about your own hidden business potentialas well.