The Complete Guide to Market and Competitive Intelligence

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.

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.

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.

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.

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

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.

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.

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. 

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.