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The Complete Guide to Market and Competitive Intelligence

Cipher_Complete Guide to CI SCN

 

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The world of competitive intelligence is changing. In a world of fast-access, mass quantity data, traditional methods for competitive intelligence (CI) are rendered obsolete. And yet, the practice of gathering and interpreting competitive intelligence data remains essential for any competitive business. 

Reactive competitive intelligence yields few, if any, meaningful insights. But there is a world of meaning to be found if relevant data is subject to better methodologies. In this treatment, the experts at Cipher—who are themselves CI analysts—provide a comprehensive guide to competitive intelligence that actually works.

 

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About Cipher

Supports the needs of enterprise Market and Competitive Intelligence (M/CI) professionals, Marketing & Sales teams, Corporate Strategy, Product Managers and Research professionals in highly competitive and regulated industries with the software tools and services they need to gain and maintain a competitive advantage.

Table of Contents

Jump straight to chapter by clicking on the options below.

What Does Competitive Intelligence Mean?

Most companies make an investment in competitive intelligence because they are surprised. The entrances of new technology or business models can easily catch leadership teams off guard. To mitigate the risk of future surprises, either internal or external competitive intelligence is deployed. Even inexperienced teams understand that this activity begins with data. 

Here’s how it usually works:

They review data sets: news, PR-focused solutions, online databases, curated feeds, etc. It will quickly become apparent that they need more data, at which point they’ll collect public financial data or private company data, social monitoring, regulatory data, digital footprint/online traffic data, etc. They spend a tremendous amount of money on data and then realize they don’t have enough time to review the data. The team grows. 

Many organizations will end up spending a ton of money on data, and people to make sense of the data before they even realize they need a better, more strategic solution.

Without a solution for categorizing, organizing and raising important data points, it’s virtually impossible to find the signal present amidst the noise of copious data streams. But that signal is the actual point and the only reality that will prevent unwelcome surprises.

 

20190911-WhyDoesCIFail

 

This pattern is sadly prevalent and reflects the traditional way that many companies attempt market and competitive intelligence initiatives. 

But it doesn’t have to be that way. You can build a sustainable CI practice, if you do it right. 

Take for instance, Cipher’s approach. In three steps, we at Cipher help build a market and competitive intelligence initiative that will actually stand the test of time, and provide real value:

  1. Assessment: Cipher’s experienced team evaluates the client’s competitive insights capability against our proprietary maturity model and designs recommendations.
  2. Implementation: Cipher’s consulting team develops a baseline understanding of the client’s competitive and market environment while our industry-leading Customer Success Team works collaboratively with the client team to implement, customize, and configure Cipher’s All-in-One competitive intel solution Knowledge360®.
  3. Cipher-as-a-Service: Cipher’s experienced team of strategists, analysts, and technologists help clients extract maximum value from their CI investment by collaboratively partnering to deeply understand the client’s business, and leveraging their expertise in Knowledge360’s data and tools to deliver timely, relevant, actionable insights that drive value.

 

A more thoughtful and measured approach, like the one described above, will help you avoid the dreaded “CI cycle of death.” You’ll be able to extrapolate the right data and hone in on the aforementioned signal that genuinely informs the best strategic steps.

By combining the right market and competitive intelligence tools with the people responsible for data analysis, you can build a winning combination.

CI Tools and Methodologies

The goal of a CI data pull is to ultimately analyze that data and get to strategic insights. Rather than a reactive, global approach—wherein teams follow the above steps of data mining from individual sites or databases—a software tool can automate this process. Knowledge360Ⓡ, for example, reduces the cost of buying access to dozens of databases and accelerates progress toward meaningful knowledge. 

Fueled by AI, software like this can pull data from every relevant source and deliver it to users on an easy-to-understand dashboard. Automating the process is, in point of fact, the only way to know that the data is current and comprehensive. The sheer quantity of available content outpaces human effort. AI can offset that overload and make a clear path based on 360 degrees of knowledge.

Competitive Environment

One of the most important goals of competitive intelligence is to establish the playing field. In other words: what is your company’s competitive environment? As you can imagine, this is an ever-changing situation, with new players coming onboard all of the time. 

Building a CI initiative once (that never gets off the ground), or pursuing traditional methods that eventually fail, will hamstring your entire organization. Knowing who the relevant players are in your space, who is being hired, who is being let go, how power is changing hands, mergers and acquisitions, and thousands of other points of data are essential to remaining competitive.

BI, MI, CI: The Strategic Triad

Competitive intelligence doesn’t exist or function in a silo. The discipline of CI is interrelated to both business intelligence (BI) and marketing intelligence (MI). Together, these three exercises form the most complete picture of a competitive landscape:

Consider if your business was a navy ship. Here is how these three interplay:

  1. BI: What is happening on my own ship? BI focuses on internal data.
  2. MI: What is happening outside? MI focuses on the weather or environment of the market itself.
  3. CI: What are my adversaries up to? CI provides intelligence about the “bad guys” and focuses on external data.

Navy Analogy

Together, these three can create an unstoppable growth machine, capable of withstanding any change or challenge.

What Does a Competitive Intelligence Analyst Do?

Competitive intelligence analysts are highly trained in exactly the processes mentioned above and can accelerate your journey toward meaningful insights.

Now that CI function has become AI-enabled, the job of a competitive intelligence analyst has changed. Fundamentally, competitive intelligence analysts are sense makers. They need to have the ability to take data from numerous sources and make sense of it. 

More than anyone, that individual should be able to determine signals versus noise (what is and is not important) and then understand the strategic implications. Data is incomplete and rife with uncertainty. An authoritative analyst will be able to determine the truth and quickly parse out conflicting information.

Competitive intelligence professionals should be able to leverage the right tools to process data, generate and test hypotheses and curate a vast knowledge base.

While increasingly essential, this is not a standardized role. You may see competitive intelligence analysts functioning in various capacities, such as:

  • Consumer intelligence analysts
  • Business intelligence or marketing intelligence analysts
  • Insights teams/leaders
  • VP of sales or VP of marketing
  • Strategy managers

The competitive intelligence professional will have a unique set of skills that enable them to glean meaningful, actionable information from competitive intelligence data.

What is the Difference Between Competitive Intelligence and Customer Intelligence?

Customer intelligence is a component of both market and competitive intelligence. It isn’t enough to know who is buying from you. Customer intelligence is about understanding both what your universe of potential customers wants, and how your competitors are fulfilling their needs differently than you.

Customer intelligence is also part of marketing intelligence. The activities of win/loss analysis, for instance, will be a key activity for this kind of competitive analysis.

Goal of Competitive Intelligence

The goal of competitive intelligence is to increase confidence and reduce uncertainty around decisions for your business.

CI won’t be the only thing to consider. It is one of many inputs that should be considered when making decisions about the future.

Why Should You Care About Competitive Intelligence?

No business can remain relevant without paying attention to what’s going on outside the company. While all of the internal data points are helpful, and can be useful for managing the business, this information is incomplete. Any company that doesn’t do CI runs the risk of being threatened by competitors.

The Risk of Not Caring: Illustrations of Damage

There are plenty of examples of businesses that have incurred damage or been burned by competition they couldn’t or didn’t anticipate.

Some major examples of organizations with insufficient competitive knowledge that experienced irretrievable loss include:

  • Kodak: Unable to foresee how digital photography would completely overtake the market, Kodak went from being enormously profitable to virtually irrelevant.
  • Blockbuster: Without a plan to adapt to digital delivery, Blockbuster went out of business. They passed on the opportunity to buy Netflix, which proved deadly.

Frequently, even large companies will come to Cipher and admit that they haven’t looked at the competition for several years. Sales and management may have some cursory knowledge but there hasn’t been a systematic devotion of time to CI. Once small surprises repeat, they realize they have no choice but to pivot their attention to this.

As an example, a client of ours came to us after they were astounded when they sat in a competitor’s investment meeting and heard that the competitor was patenting a POS device. This tool would be groundbreaking for tracking, consumer insights and sales. 

They were completely caught off guard. If a business finds out about something like this at an investor day presentation, they’re way too late to make an impact. It should never get that far without your strategic team being aware of it. 

And that’s why the health of your business relies on you caring about CI.

How to Determine Competitive Intelligence Information Needs

Not all intelligence software is going to perform the same function or the right function. This is important to differentiate, especially if you are currently looking for a BI, CI or MI software system. Here are some key indicators to look for as you try to find a competitive intelligence software system:

Good CI Software

  • Pulls all data into one place, and comes with most of the data sources you need out of the box
  • Identifies competitors
  • Pulls out the data that matters most
  • Learns from user behavior
  • Understands the relationships between events and things
  • Has elements for collaboration

Bad CI Software

  • Forces users to bring their own data
  • Takes considerably more work to implement
  • Is siloed and inflexible
  • Can’t extrapolate or aid interpretation

Click here for a comparison of the top competitive intelligence software tools.

The Difference Between Business Intelligence and Competitive Intelligence Software

Remember that BI tools and CI tools are related but not the same. Business intelligence software is measuring everything within your company; competitive intelligence is measuring everything your adversaries are up to. These discrete missions provide similarly relevant insight but should be conducted in tandem.

BI software focuses on pulling out data from your own information. Competitive intel is focused on pulling data about what your competitors are doing. Market intelligence is the third facet of these that may tap similar sources, such as social media or SEO, but has its own distinct functions and findings. All are important and unique.

The Complete Guide to Competitor Analysis Research, Data and Information Sources

Competitor analysis research guide

The Advantage of Competitive Intelligence

Having a general awareness can empower teams to make a more holistic decision about their own competitive activities. At the end of the day, the investment in BI, CI and MI has an enormous yield

Competitive differentiation will empower business leaders to make informed, strategic decisions. Companies that invest in CI will be unsurprised by shifts in the market because they are tracking both the market itself and the other players. There is no argument against it. Competitive intelligence works when done right, and businesses who intend to stick around will do it.

Want to see how we do it? Go here for a Case Study on how Knowledge360Ⓡ can be used to uncover a competitor’s pricing.

The Cost of Competitive Intelligence

Let’s drill down into the cost of not doing CI compared to the cost of making an investment in CI. As illustrated below, over a five-year period, software like Knowledge360Ⓡ can save users more than $315,000. Automation saves in terms of labor and time. The benefits in both actual spend, cost savings and knowledge are incalculable.

FIve-year-savings

 

Knowledge360Ⓡ is a competitive intelligence solution that works. If you are trying to learn the competitive landscape, glean meaningful competitive insights or hire competitive intelligence professionals, Cipher has the right resources. Contact Cipher to learn more.

How Competitive Intelligence Software Works

Ok that cost savings sounds great, but how can it save you that much?

Traditional CI ends in death, but not before a serious strain on resources. The predictably repetitious cycle of traditional competitive intelligence starts with the costly reaction of new hiring or directing current team members to CI efforts. After the initial resource allocation in terms of manpower, those teams themselves start spending money. They do this through a (frequently disorganized) process of data collection. Many data sources are paywalled and require subscriptions. Any and every platform may feel essential, so the budget gets increased to gain more access.

This has the unfortunate outcome of increasing the quantity of data, without necessarily yielding any quality results. With more data comes—you guessed it—the need for more manpower. In this way, the CI machine grows without ever actually informing strategic processes. After the cycle rolls through a few times, the cost simply comes prohibitive. Without any real results to show, teams are dismantled and budgets slashed. That is, until the next market surprise which activates the process over again. It doesn’t have to be this expensive, or this hard.

Generally speaking, the idea behind competitive intelligence is quite simple. CI analysts pull information from multiple sources, aggregate it, analyze it and interpret it. This may include data from financial sectors, publicly available info, private info and different types of data sources.

Quality CI software will pull all of the discrete data into a single place. This gives teams the chance to spend more time on high value activities. Software, and the much-needed automation, dramatically reduce but do not replace the need for human oversight. 

Good vs. Bad CI Software

Ok that cost savings sounds great, but how can it save you that much?

Traditional CI ends in death, but not before a serious strain on resources. The predictably repetitious cycle of traditional competitive intelligence starts with the costly reaction of new hiring or directing current team members to CI efforts. After the initial resource allocation in terms of manpower, those teams themselves start spending money. They do this through a (frequently disorganized) process of data collection. Many data sources are paywalled and require subscriptions. Any and every platform may feel essential, so the budget gets increased to gain more access.

This has the unfortunate outcome of increasing the quantity of data, without necessarily yielding any quality results. With more data comes—you guessed it—the need for more manpower. In this way, the CI machine grows without ever actually informing strategic processes. After the cycle rolls through a few times, the cost simply comes prohibitive. Without any real results to show, teams are dismantled and budgets slashed. That is, until the next market surprise which activates the process over again. It doesn’t have to be this expensive, or this hard.

Generally speaking, the idea behind competitive intelligence is quite simple. CI analysts pull information from multiple sources, aggregate it, analyze it and interpret it. This may include data from financial sectors, publicly available info, private info and different types of data sources.

Quality CI software will pull all of the discrete data into a single place. This gives teams the chance to spend more time on high value activities. Software, and the much-needed automation, dramatically reduce but do not replace the need for human oversight. 

Benefits of CI Software

There are numerous benefits to CI software. These include:

  • Reducing research time: Manual processes are unnecessary and expensive. Automations cut through the clutter, making relevant information easily accessible without a ton of searching and sifting.
  • Getting to 80% of the information needed: Right off the bat, a great CI software system is going to collect the majority of the data you want. This is done by setting the right criteria and letting it do its thing. The remaining 20% or so will be gathered as you refine terms and better understand what you’re actually looking for. Then, you just point the software in the right direction and it collects the rest.
  • Fast, accurate reporting: The margin for error is almost eliminated with AI-based software. Algorithms don’t make mistakes. Humans do. Software will get you a lot closer to the mark without a shadow of a doubt.
  • High data quality: Not all data on every platform is relevant or good. Sometimes, data becomes outdated or there is simply a better study or case out there. The right software can prioritize and deliver the best data to you.
  • Identification of market trends: CI requires both a broad view and a close view. This is best achieved by good CI software. Market trends are informed by history and are impacted by a host of factors and players. Software has the ability to, in realtime, gather and extrapolate everything relevant and useful.
  • Improves operational efficiency: No more tedious workflows, waiting on humans or relying solely on analysts. Get to the CI point a lot faster with CI software.
  • Data visualization: Not everyone is a spreadsheet person. But, the truth is, quantities of data have to be organized in a specific way so they actually tell you something useful. Great CI software can offer visualization of data, making it easier to understand and share.

Competitive intelligence collects the right data for competitive analysis. A holistic system, tailored to the industry a business is in, will amplify impact in every department.

How to Use Competitive Intelligence Insights Across Departments

Competitive intelligence is relevant across multiple departments in any business. Most commonly, CI software or analysts are budgeted as marketing spend. If a company is big or broad enough, CI efforts may be funded under a strategy or intelligence budget. What is consistent across all organizations is that any good CI effort must start at the top.

Executive Level Strategy

Executive leadership are key stakeholders in competitive intelligence activities. Competitive intelligence helps teams like these make the right, strategic and business decisions for the organization. 

Here is an example of how a top insurance company was able outpace the competition during COVID-19 when executives had access to timely CI insights. As you’ll see, CI efforts have innumerable benefits. Both tactical execution and top line strategy are efforts that start at the C-suite and have top-down positive results.

Tactical Execution

Executives that use the right CI software get access to:

  • Customized dashboards that present the most relevant information
  • A 30,000 foot view of the competitive landscape, for instance instantly seeing top 5 competitors and their current activities
  • Single views that are drill down to more details or points of focus
  • The right info to make high level, direction-based decisions

Essentially, the right CI software saves time, and decisions can be made lightyears faster than with traditional research methods. Data can be broken down into what is most important, virtually alleviating time and effort spend for executives.

op Line Strategy

How is competitive intelligence used in setting top line strategy? This is mostly about resource allocation:

  • Where do we allocate capital?
  • What are the most attractive segments of the market?
  • How do we understand our differentiators and value props?
  • How do we understand our competitors in each segment?
  • How do we deploy capital to each segment?

Both marketing and competitive intelligence insights help to answer all of these questions, enriching decision-making with the right information to make sound decisions faster than your competitors.

Competitive Intelligence and Sales

Sales leaders are very frequently spearheading MI and CI efforts. Competitive intelligence and sales is a vitally important connection. From product development to testing to pricing, all aspects of selling a good or service can improve with the right information. There are a few areas of CI data that are extremely relevant for sales departments.

Important Aspects of CI for Sales Leaders

The most important aspects of CI for sales leaders are getting answers to questions that include:

  • How do we win against top competitors?
  • What are our competitors’ strengths?
  • What are our competitors’ weaknesses?

Quality CI provides an understanding of the market. For instance, CI will help sales teams understand the top employers in the area they sell to, or clue them into major changes in leadership in the region.

The primary challenge to adoption among sales teams is integration. CI cannot be “yet another” software that has to be accessed. Salespeople already use CRMs but don’t feel that these contribute as much as they should to productivity. Sales teams can quickly be made to see that CI isn’t additional work or busy work—especially if it is largely automated or powered by AI—but another tool in their arsenal.

How Competitive Intelligence is Used in Sales

Sales opportunities are everywhere. They are ready to be won or lost. Beating out “Competitor A” in a sales opportunity is the goal of any salesperson in any company. They do this by better communicating: my solution has advantages compared to competitor solutions. This usually includes highlighted facts and features, such as pricing. 

In this context, competitive intelligence is invaluable, providing far more plug-and-play differentiators than product information alone. Knowing how your product stacks up in the market is a winning step toward closing more sales. 

The Sales Analytics That Contribute to Competitive Intelligence

Competitive intelligence itself benefits from sales data and analytics. For instance, sales and marketing typically live under the business intelligence umbrella. Sales data can inform both competitive intelligence and marketing intelligence. 

The idea is measuring the share of the wallet: how much spend are we getting and how much are we losing? This data puts a finger on the pulse of the market in a way that leads to proactive, rather than reactive, decision-making.

Competitive Intelligence and Product Development

No product should go to market without a thorough analysis of the competitive landscape. There are many aspects of competitive intelligence that are important to product development and product managers. For example:

  • What new products are being developed by competitors?
  • What similar products are on the market and how are they priced?
  • What are the hiring trends for certain roles or products?
  • What tools and technology are being used?

All of this isn’t just beneficial to know: it’s essential. Without it, every step could be slightly off. This won’t be apparent until you are too far along the path of marketing a product to notice. By then, it will be too late to course correct.

Important Aspects of CI for Product Development

Continuous product innovation is only made possible by competitive intelligence. The cost and risk of new products are both reduced with the right CI. Knowing customer needs and market conditions are primary activities before a product even passes all of its R & D stages.

How Competitive Intelligence is Used in Product Development

The importance of CI for product development is largely tactical. It varies widely across different industries and depends on things like product development lifecycle, time to market, etc. Some businesses, like pharmaceutical companies, take years to get to market. 

Other companies, with far shorter product life cycles, need to know week-by-week shifts. A good CI software can customize the approach to data pull and delivery, so that users see the timeline and rhythm that best informs their decisions.

The Product Analytics That Contribute to Competitive Intelligence

The right product analytics are central to quality CI data. Location-based data, such as buyer trends and regional sales/marketing efforts, can help businesses deliver the right product to the right people. 

Social media analytics, consumer trends, similar product sales numbers and more have a vast potential to aid businesses as they make meaningful decisions for a new product. And knowing the other products out there is really a core activity as you deploy any marketing efforts.

Competitive Intelligence and Marketing

Marketers may be the most instinctively interested in what competitive intelligence has to offer. After all, they are driven by metrics and utilize numerous platforms with built-in data. Finding a competitor provides the right insight. 

Marketing intelligence and marketing data are undeniably part of a holistic competitive intelligence plan. The goal? Competitor analysis should result in a competitive advantage. And there are a few important aspects marketers use to achieve this goal.

Important Aspects of CI for Marketers

While things like buyer behavior, brand engagement and brand loyalty may feel largely “soft science,” they are backed by irrefutable data. In some ways, people are predictable, and their buying habits reflect that. CI enables marketers to track their own marketing efforts, track competitor websites and track competitor messaging.

Now that the world is online, CI for marketers is easier than ever. Everything a competitor is saying about themselves or their product is available for the world (and their competition) to see. All of this can be harvested, collected and learned from. Savvy marketers will engage in ongoing research that includes CI.

How Competitive Intelligence is Used in Marketing

Competitive intelligence is based on an understanding of the competitive advantage of quality communication. Marketing deals largely in connections and attention. The best marketers cash in on the spotlight afforded by a well-built digital property. 

Building digital properties and digital collateral is done with an eye to the website, social media profile and ad campaign next door. Both a telescope and microscope have value and both realms of data can be gained with the right CI software.

The Marketing Analytics That Contribute to Competitive Intelligence

Marketing data deals with the four Ps:

  1. Product
  2. Price
  3. Promotion
  4. Place

All of these can be accessed and assessed through CI activities. Market research and competitive analysis are endless activities. Markets grow and change and crumble and rally. This never-ending activity requires super-human tools. And Knowledge360Ⓡ has the power for you.

Knowledge360: Competitive Intelligence Software

Knowledge360 is the first-of-its-kind, all encompassing Market and Competitive Intelligence Platform to accelerate your CI success. Addressing all of the vital components of both market and competitive intelligence, Knowledge360 becomes your platform to harness data. Collect, discover, analyze and collaborate with ease. 

With natural language processing and AI-enabled searchability, it is the fastest, simplest way to make market and competitive intelligence data insightful and actionable. Want to see it in action?

Schedule a Demo