How well do you make business decisions? Would you make better decisions if you could rub a crystal ball and see into the future? For those of you who are skeptical of Dionne Warwick’s ability to help you discover the next great innovation in your industry through the Psychic Friends Network, try competitive intelligence.
While I cannot promise to out-predict the mythical wizard Merlin, I can help you can gain valuable foresight into market trends, buyer behavior and your competitors’ plans by employing creative techniques for gathering information from public records, interviews and physical surveillance and then using sophisticated methods of analysis to combine numerous pieces of uncommon information into strategic recommendations for your business (or a client’s business). All for a lot less than the $2.99 per minute the psychic hotlines are charging.
Intelligence is uncommon information analyzed for its strategic implications. Thousands of years ago, the brilliant Chinese military strategist Sun Tsu stressed the vital role of military intelligence to gain a “foreknowledge” of the enemy’s plans and the use of counterintelligence to deceive your enemy. This combination of foresight and deception provides a strategic advantage in both a military and commercial setting.
While military intelligence is gathered through spying, commercial or competitive intelligence is gathered through a thorough review of public records for hidden information, excellent interviewing skills and keen physical observation, all geared toward predicting the future plans of your competitors and customers by understanding their behavior and thought processes.
For example, a restaurant located in a busy urban area operates in an intensely competitive environment. While good food at a good price are prerequisites to success (“order necessary criteria”), you need something to put you over the top (“order winning criteria”). A review of your competitors’ filings with the planning and zoning commission may provide you with critical insight into future plans. Applications for construction permits suggest expansion, which means shorter waits for customers, an order winning criteria. Requests for no parking zones in front of the restaurant may be for valet parking, an order winning criteria, especially in overcrowded urban areas.
The really good competitive intelligence professionals are extremely creative and go well beyond public records. For example, getting a job at the competing restaurant as a bus boy would allow you to: (a) calculate a reasonable estimate of that day’s revenues by dividing the total tips by 15%-20% (working backwards from his tips from the servers); (b) develop a list of suppliers; (c) uncover operational strengths and weakness that can be bench-marked against your business and industry averages; and (d) gain valuable insight into the thought process of the managers.
This is very different from spying, which is illegal. A so called industrial spy would rip the hard drive out the restaurant’s PC, tap the phone, bug the office or steal files. A competitive intelligence professional is merely paying great attention to publicly observable events, having innocent conversations with customers, suppliers and employees, and viewing public filings to create a profile of the business and its decision making processes. employees, and reviewing public filings to create a profile of the business and its decision making processes.
Competitive intelligence can be used not only to predict and counteract your competitor’s strategic moves, but also to better understand your customers and your market, allowing you to become the market innovator. Marketing mavens Al Reis and Jack Trout, in their book Positioning: How To Be Seen and Heard in an Overcrowded Marketplace, emphasize the importance of being first. In a society where consumers are bombarded by competing, groundless claims of who is the best, what people remember is who was first. If you are the first restaurant to offer free valet parking in an overcrowded neighborhood, every one else is viewed as a follower, no matter how much better they may do it. Therefore, good, timely intelligence about the market in which you operate is critical to innovation, strategic positioning and effective business decision making.
According to the Society of Competitive Intelligence Professionals, only seven percent of large corporations have a formalized, full scale, competitive intelligence capability. For smaller companies, the figure drops to approximately five percent. If you are looking for a competitive advantage, try looking into the mind of your customers and competitors through competitive intelligence.
If you are looking for additional revenue in your own investigations agency, why not offer competitive intelligence to your business clients?
I had a case not too long ago where a friend wanted to start a commercial landscaping service and he asked me how he could jump-start his marketing and advertising. The solution was immediately clear to me: go to the consumers of such services first and offer to do the job better and a little less expensive than the current provider (again, “order necessary criteria”). So he hired my investigation agency to pick 3 commercial landscaping companies to follow and develop a client list. We not only developed an extensive client list for him but obtained copies of their marketing materials, products used, service fees and client points of contact (the decision makers). Armed with this information my friend then simply approached the potential clients with a better offer.
Out of the 71 service consumers we identified, he landed 18 of them and had instant start up revenue; 11 of these 18 were clients of the same landscaping company, so we both realized that there was an obvious service problem that was exploitable. We focused our efforts on that service provider for 2 more days and our client ended up gaining an additional 6 accounts. Our cost to him for services ended up being a little over $5,720 but the 24 accounts he picked up paid for our services in less than 2 months. We have replicated this type of service now well over a dozen times and are making this a featured service within my agency.