Business is like running a race. Effective uses of competitive intelligence are the hottest tactics to beat your competitors.
It’s important for businesses to closely monitor their marketing, pricing, and costs. In facing financial issues, many businesses are too quick to cut costs in marketing and human resources.
One of the first questions businesspeople ask me: “How do I affordably find out what my competitors’ prices are?”
My typical answer: “Use your salespeople to talk with your former customers, present customers, and the people who buy from your competitors.”
Not to be gauche as a business-performance consultant, my best-practice answer is to hire a competent outside-participant to learn customers’ attitudes.
A hot topic: Since early 2009, it seems all we have heard about is social media and connecting with customers.
With the increasing popularity of social-media, it is helpful for business success. It takes a savvy staff or outside experts to listen and engage prospective customers in the marketplace.
Competitive intelligence insights
That’s why big companies have become astute in social-media strategies and they invest in competitive intelligence. But they do not divulge what they learn. As a result, competitive intelligence is still a relatively unknown best-practice in business, especially for small to medium-size companies.
Not to criticize, but that’s partly true because a lot of practitioners in competitive intelligence are great at what they do, but they don’t adequately explain their services.
Many small to medium size businesses owners assume competitive intelligence is simply the art of understanding business adversaries. Not true.
To use an analogy, designing speedy tactics to beat business competitors is a lot like sports, especially track. The surest way for runners to lose in a competitive race is to look over their shoulder.
Yes, many businesspeople tend to look over their proverbial shoulder. They are too worried about a competitor instead of running their best race.
A leading competitive intelligence consultant, Seena Sharp, agrees. She wrote the book on competitive intelligence: “Competitive Intelligence Advantage: How to Minimize Risk, Avoid Surprises, and Grow Your Business in a Changing World.”
She says focusing on competitors is a misguided approach.
“A far better strategy is to monitor and deeply understand the marketplace which is constantly changing,” says Ms. Sharp. “Competitors are just one piece of the puzzle and you need all the pieces.”
She points out success does not result from outsmarting competitors.
“Success is a direct result of giving the customer what they want,” adds the author. “You don’t need competitors for that.”
“If so, then why would another restaurant open? Do we really need another place to get hamburgers or pizza or coffee? Business is not a zero-sum game, so beating competitors still may not bring you the results you seek.”
Ms. Sharp contends competitors may not be direct competitors from your industry.
“They may specialize in a different industry but still offer what some customers want,” she explains. “The most important thing to learn from competitors (direct, indirect, new and substitute) is why are they attracting customers, customers who could be yours?”
Her advice: Learn how to respond to marketplace changes.
“Those changes today are likely to be unexpected, surprising, weird – and therefore, most likely to be ignored or underestimated,” says the author. “Take some time – a few weeks – to recognize more evidence of these changes and to consider what these changes mean.”
Finally, Ms. Sharp theorizes how companies unknowingly give away their power.
“Not necessarily a point for a brief article, but the highly reputed ‘Blue Ocean Strategy’ stresses the importance of not being a me-too company, of not being a direct competitor,” she concludes. “I call it the anti-competitor strategy in my book.”
Of course, “Blue Ocean Strategy” is an award-winning, best-selling book by consultants W. Chan Kim and Renée Mauborgne.
Ms. Sharp’s Web site: www.sharpmarket.com. Be sure to read her “SharpInsights.”
Another Biz Coach article featuring Ms. Sharp’s expert opinion: Competitive Intelligence Author Shares Her Insights
(Disclosure: I highly respect Ms. Sharp and have watched her for several years and I believe you can take anything she says to the bank.)
From the Coach’s Corner, related content to consider:
11 Sales Strategies to Outsell Your Big Competitors — Big companies have obvious advantages over small businesses. Their brands are well-known. They can afford sales training, sales-support staff and customer-relationship management software. On the other hand, there are good reasons why Cyber Monday has become big. Yes, many online customers do it to save money on sales taxes.
“It is of the highest importance in the art of detection to be able to recognize, out of a number of facts, which are incidental and which vital”.