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Competitive Intelligence

Thanks to digital transformation, young market entrants with seemingly few resources are challenging the status quo and threatening even some of the most established organizations. 

The average company lifespan has shrunk to under ten years, primarily due to the rapidly changing competitive landscape. 

To stay afloat and adapt to changes in market demand, organizations rely heavily on competitive intelligence.

What is Competitive Intelligence?

Competitive intelligence (CI) is the process of gathering, interpreting, and assessing information about competitors to gain a competitive edge. 

Companies use CI to gain an understanding of their current business market and identify potential opportunities for growth.

CI encompasses a broad range of activities that utilize both primary and secondary data sources.

  • Primary Sources: Customer data (e.g., feedback surveys, customer interviews), competitor products (e.g., competitive pricing, feature comparisons), market reports, patent filings, and financial reports.
  • Secondary Sources: Market research studies, analyst reports, news articles, and social media platforms.

Businesses use competitive intelligence to inform strategic decisions, such as product and service development, pricing strategies, marketing plans, and risk management. 

CI also helps them anticipate their competitors’ future activities by keeping track of changes in market trends and technologies.

Beyond keeping a pulse on external market conditions, organizations can use competitive intelligence to benchmark their own performance against competitors and identify areas for improvement. 

This information can help sales reps improve the sales process, and product developers create more useful offerings.

Synonyms

  • Competitive Analysis A business analysis that takes an in-depth look at the competitive forces and market dynamics of an industry, factoring in competitive intelligence.
  • Competitive Insights – Actionable insights companies use to identify and target untapped customer segments, devise pricing strategies, or create new products or services.
  • Competitive Market Intelligence – Data-driven information that helps organizations make informed decisions about marketing campaigns, product launches, and customer segmentation.
  • Competitive Research Research gathered by an organization with the intent of making decisions that will give them a competitive edge.
  • CI The abbreviation for “competitive intelligence.”

Types of Competitive Intelligence

Competitive intelligence” is a broad term that encompasses both qualitative and quantitative techniques.

  • Qualitative CI: Understanding a competitor’s strategies, tactics, and goals through research such as interviews, market studies, and surveys.
  • Quantitative CI: Analyzing competitors’ data to identify patterns in their activities and make predictions about their next moves. This often involves using analytics tools such as web crawlers and sentiment analysis.

Beyond this, there are four types of competitive intelligence.

1. Marketplace

Marketplace intelligence consists of gathering publicly available information on the competitive landscape. This includes analyzing competitors’ pricing, financial performance, products, services, customer base, and growth strategies.

To collect this information, companies often use tools such as web scraping, keyword tracking, and sentiment analysis. 

Some marketplace intelligence is also readily available through market research reports and analyst opinions.

2. Customer

Customer intelligence involves understanding the wants and needs of customers, such as their behavior, preferences, and buying habits. 

Companies typically use this type of intelligence to inform product development, customer segmentation, and marketing strategies.

Data sources for customer intelligence include feedback surveys, focus groups, social media platforms, and segmentation tools. 

Typically, businesses collect their own customer intelligence, but they may also purchase third-party data from research firms or market analyses. 

In many cases, industry leaders also publish some form of generalized customer intelligence in the form of white papers.

3. Product

Product intelligence helps businesses understand the features, benefits, and usage of their competitors’ products. 

Companies use this information to develop competitive offerings, target untapped customer segments, and optimize their pricing strategy.

Information sources for product intelligence include user reviews, feature comparison tools, competitor websites and documentation, and interviews with industry experts. 

This form of intelligence also involves user testing, which allows companies to identify usability issues with competitors’ products and improve their own accordingly.

4. Marketing

Marketing intelligence focuses on understanding competitors’ marketing tactics, including their online presence, ad campaigns, content strategy, and sales process.

Businesses use this information to identify areas of opportunity, potential threats in the market, and ways to convey their value proposition effectively. 

Sources for marketing intelligence include competitor website analytics, social media monitoring tools, search engine optimization (SEO) assessments, and online advertising data.

Good Sources of Competitive Intelligence Research

Since a company’s intellectual property is critical to its success, almost all business intelligence is rigorously guarded at the internal level. And going after private company data through company infiltration, hacking, or other illegal methods is, of course, illegal.

However, there are numerous legitimate sources for CI research:

  • Analysts Reports (e.g., Gartner, Forrester, Deloitte)
  • Research Papers (e.g., academic journals, industry reports)
  • Trade Publications (e.g., online blogs)
  • Investor Relations Documents (e.g., earnings calls)
  • Public Records (e.g., SEC filings)
  • Press Releases (e.g., news sites, company websites)
  • Social Media Platforms (e.g., Twitter, LinkedIn)
  • Government Agencies (e.g., the U.S. Department of Commerce)
  • Market Research Firms (e.g., Gallup, Nielsen, Statista)
  • SEO Tools (e.g., Semrush, Ahrefs)
  • User Reviews (e.g., Amazon reviews, App Store ratings, G2 comparisons and reviews)
  • Online Communities (e.g., Reddit, Quora)

But each source shares the same limitation—they can only provide a limited view of the competitive landscape. 

To fully understand their market positioning, organizations must also conduct their own research and analysis.

The best ways to collect competitive intelligence include:

  • Establishing a network of industry contacts
  • Developing relationships with vendors, partners, and suppliers
  • Attending trade shows and conferences
  • Continuously surveying customers and industry experts
  • Conducting user tests on products and benchmarking them against competitors’
  • Analyzing competitors’ online presence 

Most major industry players (e.g., HubSpot, Salesforce, Oracle, Shopify, Microsoft) even publish their own studies to solidify their knowledge of the competitive landscape and establish thought leadership.

Competitive Intelligence Best Practices

Once a company has collected the relevant data and insights, they should follow some best practices to ensure their correct use. This requires different strategies and approaches at different points in the process.

Research

Conducting research involves careful planning and preparation. To ensure research is correctly executed, companies should follow these best practices:

  • Research with intent: Studies should have a predetermined goal in mind that gives the product, sales, and/or marketing team actionable insights.
  • Focus on relevant data: Research should be targeted to the areas where it’s most useful, such as industry trends, customer needs and preferences, competitive strategies, and market opportunities.
  • Study multiple sources: Don’t rely solely on one source or sample size when gathering information; instead collect data from a variety of sources to ensure accuracy.
  • Create standardized systems and processes: The biggest problem that companies run into when researching competitor activity is not having a centralized data repository. Utilizing an in-house system, such as a CRM system or marketing automation platform, helps to store and organize all the collected information in one place.
  • Streamline communication with messaging and project management tools: Make sure all team members have access to the necessary data and can communicate with one another in a timely manner.

Analyze

To properly analyze data, companies should use an analytical approach that considers both qualitative and quantitative data. 

This should include assessing market trends, analyzing competitors’ product features, examining customer sentiment, and understanding pricing dynamics.

A few common ways businesses analyze their CI data include:

  • Market segmentation
  • Porter’s five forces analysis
  • Competitor benchmarking
  • SWOT analysis

In most cases, businesses use a combination of these techniques to draw meaningful insights. 

They also use visualization tools, such as heat maps and data flow diagrams, which show relationships between different data points and help to identify key areas of focus.

Take Action

Once an organization has gathered its competitive insights, analyzed it, and established a business strategy, they need to take action.

This could mean several things:

  • Adjusting product features to address unmet customer needs.
  • Crafting messaging for marketing campaigns to communicate with their ideal customer profile.
  • Adjusting pricing and discounts to represent what buyers are willing to pay.
  • Shortening the sales cycle, improving buyer engagement, or otherwise improving the buying experience.
  • Successfully navigating a new product launch.
  • Personalizing customer service to ensure a positive customer experience.

The ultimate goal is to use the insights collected from competitive intelligence to improve the organization’s position in the market and help them remain ahead of their competition.

Ways to Use Competitive Intelligence to Grow Revenue

Through competitive strategies, organizations can drive revenue growth by clearly understanding their target customers and the competitive landscape. 

Here are a few ways to use competitive intelligence to grow revenue:

Product Development

Each year, more than 30,000 consumer products are launched and about 95% of them fail. In the Software-as-a-Service (SaaS), cloud computing, mobile app, and other technology-oriented markets, about one in five fail within the first year.

The top reasons for this include:

  • Lack of necessary funding, financing, or resources.
  • Poor product-market fit.
  • Ineffective marketing and sales efforts.
  • Bad business partnerships.
  • Lack of research.

Some of these are inescapable—a company can’t fix a bad partnership and CI won’t help a CFO manage their budget. But prior research into the competitive landscape could have prevented a lack of product-market fit or ineffective marketing and sales efforts for many of these companies.

Since the product comes before the sales and marketing efforts, this boils down to product development. Without the right product that solves a customer need, no amount of sales or marketing will help.

By researching the overall market and competitors’ products to find gaps before launching a new one, sales teams will be selling a product with a proven need, rather than just a “good idea.”

Marketing & Sales

The goal of sales engagement and marketing communications is to connect with prospective customers in a way that resonates and encourages them to convert. 

To create the right messaging, organizations need to have a clear idea of the customer journey, what it means, and what the best engagement strategy is.

Rather than creating one out of thin air, businesses should look to previous successful businesses (i.e., competitors and other industries), talk with potential buyers, and analyze the full range of available data.

By understanding buyer behavior, motivations, and decision-making processes, businesses can craft targeted messages that have a higher likelihood of resonating with their target audience. 

This means more successful sales conversations and better customer engagement—ultimately leading to increased revenue.

Setting Prices

Product pricing is a tricky balancing act—it needs to be high enough to generate sufficient revenue, while being low enough to remain competitive in the market. And without the right data, price optimization is nearly impossible.

Several elements go into creating the optimal price for buyers and sellers:

  • Competitor pricing.
  • Customer buying preferences.
  • Cost of goods and services.
  • External market forces such as taxes, tariffs, or supply chain issues.
  • Internal variables such as overhead, labor costs, production capacity.

Pricing dynamics also play a significant role in pricing optimization. 

This includes understanding the customer’s willingness to pay, how competitors react to changes in pricing and discounts, and other external factors that can impact a company’s ability to set prices.

With a clear understanding of the competition, customer preferences, and costs, organizations can accurately set prices that drive revenue growth without significantly impacting their bottom line. 

Then, they can use CPQ software and pricing optimization tools to automate the process and ensure accuracy.

Strategic Investments

When a major company does a round of layoffs, it always makes the news. 

Sometimes, these layoffs are caused by structural issues, such as an over-leveraged company or a shift in business operations. But often, they represent an industry at large.

If an organization sees numerous companies in its industry making significant moves in human capital (i.e., hiring or laying off staff), its stakeholders should look into why that is and give their own company a closer look.

The same is true for technology investments. If multiple competitors move toward a new cloud platform or data analytics solution, an organization should investigate why and determine if it could benefit from the same move.

Go-to-Market Strategy

A go-to-market (GTM) strategy is a comprehensive plan for launching and marketing a product or service to the right customer segments at the right time. It includes strategies for gaining market share, building brand awareness, and delivering value that resonates with target customers.

At its core, a GTM strategy seeks to maximize sales performance, but to do that, executives need to understand their competitive landscape. 

CI can help here by providing the data needed to develop a comprehensive plan for launching products in the most effective way possible.

With access to competitor pricing, customer feedback, product reviews, buyer trends, and other market-related insights, organizations can take strategic planning to the next level and create GTM strategies that lead to long-term success.

Competitive Intelligence Tools

Organizations need to ensure they have the right tools in place to get the insights they need.

Here is a list of the best competitive intelligence tools to help you get started:

  • Sisense
  • Crayon
  • SimilarWeb
  • G2 Crowd
  • Semrush
  • Wappalyzer
  • BuzzSumo

People Also Ask

What are the main components of competitive intelligence?

There are six key elements of a successful competitive intelligence strategy:

1. Market analysis
2. Customer feedback
3. Competitor research and analysis
4. Pricing optimization
5. Go-to-market (GTM) strategy
6. Competitive intelligence tools

What is the main function of competitive intelligence?

The primary function of competitive intelligence is to provide businesses with the insights needed to make informed decisions about their strategies and operations. 
Using these insights, organizations can identify opportunities, uncover threats, and position themselves for success in the market.

What is a competitive intelligence strategy?

A competitive intelligence strategy is an organized, systematic approach to gathering and analyzing data from competitors, customers, and markets. 
It helps organizations identify opportunities for growth, develop informed strategies for market share, price optimization, customer engagement, and brand awareness.

What’s the difference between competitive intelligence and market intelligence?

Market intelligence is one type of competitive intelligence. It focuses on gathering and analyzing data related to a specific market or industry, including its competitors. 
For example, market intelligence would include analyzing multiple competitors’ pricing, product offerings, and customer reviews to understand the market as a whole.

How can I start building a competitive intelligence program?

The first step to building a competitive intelligence program is to identify the key aspects of your business that need to be monitored. 
These could include market trends, customer sentiment, pricing models, and competitor activities. 
Once you have identified the areas of focus, you can begin setting up systems and processes to monitor these factors on an ongoing basis.