Competitor intelligence – what is it?

Unless your business is entirely isolated and working in a niche untouched by any other company, you’ll have competitors. While of course, their job is essentially to overtake you in market share and encourage customers to purchase from or work with, their organisation over all others, having competition is actually good for the industry and can help boost productivity, proactivity and progress.

It’s important that businesses keep an eye on their competitors and use any information they have on them to act in a strategic and smart manner. Gathering — and using — competitor intelligence can help businesses gain competitive advantage and customer share, and maintain a ‘one step ahead’ position in the market. But how to do so? Let’s deep dive…

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What is competitor intelligence?

Competitor intelligence (often abbreviated to just CI) is a specific type of market intelligence that refers to information gathered and analysed on competing businesses in the same sector, business area or market.

Competitor intelligence sits in business strategy alongside market intelligence and customer intelligence to build a comprehensive overview of how and why markets operate as they do, as well as to highlight areas for concern, areas for improvement or areas for investigation. When intelligence and information is used from all areas properly, businesses are able to develop, grow and move in a way that keeps them abreast of market appetites and ahead of the curve compared with competing firms.

If used properly, competitor intelligence should encourage businesses to move in fresh and new directions from other organisations, opposing ‘copycat’ or uncompetitive behaviours. In gaining the ability to differentiate itself from the competition, a business can develop its own steadfast brand persona and benefit hugely as a result.

Isn’t it illegal to hold information on business competitors?

Absolutely not! Competitor intelligence should not be confused with industrial espionage, which is indeed a crime. Where Industrial espionage is a specific type of surveillance and intelligence-gathering without transparency for commercial purposes, competitor intelligence simply gathers and retains publicly available information to build up a portfolio of knowledge. No information in a competitor intelligence programme is gathered illegally, unethically or illegitimately.

How does obtaining competitor intelligence benefit a company?

The best business decision is a well-informed business decision, and knowing what the competition is doing can help build a competitive advantage. If companies are quick to react and fill any gaps in customer fulfillment, needs or appetites, they can be the first to do so and not get caught out or left behind by others.

No matter how much or how little competitor intelligence is collected, businesses can decide for themselves how or whether to use it. There may be some areas that are relevant for them to explore and some there aren’t —but providing the organisation stays true to its values and vision in working with competitor intelligence, it will succeed in its own way.

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Choosing not to obtain any competitor intelligence at all will often result in the competitor moving to overtake or even make obsolete the original business, so even if there isn’t the time, money or inclination to spend on gathering vast amounts of competitor intelligence, it is always recommended that at least some work in this field is done.

What components are there to competitor intelligence?

Competitor intelligence is a matter of gathering information on competitors, but when coordinated properly in different parts, it can be hugely beneficial. In order to build a thorough and well-rounded competitor intelligence strategy, several areas should be considered and — where possible and available — information obtained to fit each.

These areas are:

Competitive analysis

The competitive analysis identifies the strengths, weaknesses, threats and opportunities (SWOT) of the business and the environment it operates within. A basic SWOT analysis helps highlight points of opportunity and concern to act as a starting point for onward movement.

The SWOT analysis, when backed with some evidence and data-driven investigative findings, can be used to make informed business decisions as part of an ongoing strategy. Typically, although there may be a basic SWOT analysis in place put together by someone within the business, it is wise to involve a product marketing or specific analysis team (or a third party) to carry out a full competitive analysis. Their expertise and broader perspective can bring up topics and issues that may otherwise not be considered and/or would be overlooked or missed.

The market and competitive landscape

Every company operates within a competitive landscape — that is, a market, niche, or specialisation with competing companies within.

Putting together a basic map of the competitive landscape within which a business sits is often considered as just a list of competitors in the field, but it’s so much more. Using a basic mapping technique (whatever is of preference) to break down types of competitors, businesses can identify the following:

Direct and indirect competitors — those businesses with whom a company is competing for every sale or purchase. Direct competitors offer the same or similar product/s and/or services, and indirect competitors offer differing products and/or services but ones that can also fulfil the customer need.
Perceived competitors — those businesses operating within the same field or market whom others may consider to be competitors, but who currently aren’t. This may include some businesses that have misperceived by those inside the business as competitors!
Aspirational competitors — companies, usually leading in their fields, of whom the business aspires to compare to and eventually compete with. An aspirational competitor may influence and inspire the business in the way it operates, markets itself, communicates and/or develops.
Potential competitors — any businesses that are likely to move into the same industry and compete, either directly or indirectly, in the future.
Once these lists have been populated, work can begin to understand their products, services, competitive advantage, unique selling points (USPs), industry direction, consumer perception, company stage and solution type. All of these factors could influence the business’s onward success.

 

Competitive advantage

Every business and its products or services should have a competitive advantage that differentiates it from its competitors in a positive manner and influences them to buy it over others. Understanding not just what the business thinks its competitive advantage is but also what consumers perceive it to be is imperative in order to ensure they’re able to continue to shape and brand themselves appropriately; communicating effectively about exactly why customers should work with and buy from them over anyone else.

The competitive advantage of rivals should also be understood. Why is it that customers of rival businesses use them? What are they offering that their competition isn’t? What is it that makes customers return to them? Once the answers to these are known and properly comprehended, action can be taken to meet those needs and perceptions in the business.

Ideally, a competitive advantage should be permanent and sustainable, although it is acknowledged that some advantages (i.e. money-off discounts, limited edition products) are beneficial even on a temporary basis. However, in these cases, it may be more difficult to retain customers in the future, so thought should be given to how best to capitalise on a purchase in such circumstances.

What is the best way to gather competitor intelligence?

The term ‘market research’ is very broad, but it encompasses a whole range of intelligence gathering and amalgamation. Whilst it doesn’t just focus on the activities of competitors, it does include it, but also broadens out from this basic information to feed various insights into a wider competitor intelligence strategy for the betterment of the company. If carried out correctly, market research should collect data from throughout the market and its operations, as well as the experiences and opinions of stakeholders and consumers who are yet to purchase from, or work with, the business.

Market research can be carried out in part or full by a specialist agency, or completed by someone internal to the company — but it is always worth seeking a third-party independent opinion and an unbiased view.

Good market research combines customer needs and preferences with actual market activity in a range of qualitative and quantitative measures. These include, but are by no means limited to, the following:

Customer reviews

Although it is always beneficial for a business to understand how customers feel about its products and services after purchase or collaboration, user-created reviews are often overlooked as a competitor intelligence tool.

When facilitated through a third-party independent software system such as Feefo, customer reviews prove an invaluable tool to businesses by using analysis techniques to group and theme content to prompt business action — both positively and negatively. However, the content of these reviews, providing they are public, is hugely important not just for the business concerned, but also for its competitors.

Businesses are able to view and analyse the content of public reviews to identify the areas for improvement and areas of success for their competitors. There may be distinguishable gaps where a business can operate that its competitor can’t, highlighting a competitive advantage opportunity. Or, there may be an area for development that the competitor appears to be missing even though it is evident customers are looking for it. What can be even more interesting is where the business being reviewed has responded. This can indicate customer service policies and even business direction!

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Customer surveys

Customer surveys allow for consumers to be asked specific, targeted questions to focus in on the information a business wants to receive. These can be sent at any time during the customer lifecycle but must be deemed to be appropriate, relevant and not too time-consuming.

In particular, customer surveys are fantastic for probing further into consumer perceptions. The way customers view and think of a business — yours or a competitor — may not align with the perception the business has or wants to put across. Understanding perceptions and working with them can hugely impact on customer interaction and engagement, and ensure that communications and understanding marry up in harmony to encourage purchase and collaboration. While it may not be advisable to ask straight up ‘what do you think of business A and business B?’ on a customer survey, it can be worded in a subtler way to gather such insights. For example, ‘what do you think other businesses do better than us?’ or ‘why do you choose to use our products/services over other companies’?’.

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Focus groups

Customer surveys are great for gathering basic data, but, where more emotive or in-depth information is needed, a face-to-face conversation may uncover further competitor intelligence.

Focus groups are usually run by a specialist third party and allow for consumers (be they existing customers, potential customers or a random subsection of a specified community) to enter into discussion on a brand, and/or its products and services. This conversation presents the opportunity for further (and smarter) questioning and the identification of new areas for business development and growth. Focus groups are labour-intensive but allow for open, honest and frank discussion around concepts, products and ideas in order to better understand true human emotion and perception of the subject at hand. The discussion can be led in any manner of directions to include competitor information and perceptions in order to feed into the wider competitor intelligence knowledge bank.

Market and industry data

If market statistics and data are available publicly (or to a business through an appropriate professional channel), these should be studied to identify trends, changes, strengths and weaknesses. Such data may be accumulated from industry press and publications, government data, stocks, shares, bonds and equities prices, industry-specific studies, public consumer survey findings, presentations and even just conversing with others who work in the same field or sector.

Observing how the market that a business operates in responds to new products, new players, relevant legislation and even current affairs allows for those in the industry to plan ahead and adapt their business strategies to how the market is most likely to move and react in the future.

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The competitor themselves!

Unless operating in an extremely covert manner, it is unlikely competing firms remain silent publicly. An often overlooked but hugely beneficial channel to gather competitor intelligence from is the competitor themselves.

Social media posts, newsletters, product developments, online forums, publications and event contributions can all help provide tangible, workable information for businesses. In particular, business breakthroughs or developments are likely to be posted publicly — with competitors able to monitor them. Relocations, new locations, new products and new hires are all likely to be mentioned somewhere online, if not off, and can help indicate a competitor’s direction, appetite and success thus far — all ready to be added to the competitor intelligence arsenal and responded to appropriately.

How is best to organise competitor intelligence?

Once the competitor intelligence has been gathered, it should be compiled and organised in order to make it workable. This can be done in whichever way is most appropriate and workable for the business. The following are all popular, and well-proven, methods:

A sales battlecard

A sales battlecard is a single piece of paper (or electronic page) that is designed specifically for sales personnel within a business to help them navigate competitive sales interactions.

This document includes information on each competing product or service alongside potential strategies that could be employed to compete against them. It’s a small, easily (and quickly) read ‘snackable’ reference piece that should be updated and circulated on a regular basis. This quick reference allows sales staff (or indeed anyone who may enter into such conversations) the ability to recall how best to tackle competition and result in a positive outcome for the business.

A comparative competitive matrix

Once competitor intelligence has been gathered, a competitive matrix can be created to compare the data side-by-side for ease of use in the analysis. These visualisation tools are most often found in the form of comparative matrices such as you can find in feature comparison tick box charts on consumer products, as this is considered a simple way to see, at a glance, strengths and weaknesses between competitors. They often come as a list of criteria vertically along the side with each competitor’s name horizontally across the top. There may be ticks or colour codes added that indicate the ability, service or level of each business.

Comparative competitive matrices can also be found in the form of:

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  • Quadrants — a measure that sorts each competing company into four sections based on two tangible metrics. Quadrants are a commonly used visual display matrix by third party analysis specialists such as Forrester and Gartner.
  • Win/Loss Maps — these matrices map out where you struggle as well as where you excel in comparison to competitors. For example, when working against Company Y, you may win every time, but this may only happen once a year. But when working against Company X, you win 50% of the time and this happens monthly. This determines not just the business’s ability to succeed but also the likelihood and frequency of doing so. 

 

Pricing analysis feeds

Pricing analysis is a specialist field and usually one within which a company operating in a price-sensitive field would hire a member of staff to cover. Statistical techniques such as simultaneous multi-attribute level trade-off (SIMALTO) and conjoint analysis are used to understand what price markets will pay at any given time for what products and/or services. Research specifically into competitor pricing may be present too but can be extremely complex to understand depending on the pricing model used. In some fields, price information is so secretive that the data needs to be sourced manually from websites, price lists and B2B sales platforms.

In industries where prices fluctuate and so competitors need to monitor theirs against others, pricing analysis is usually presented as a live feed on a database to allow for real-time changes as required.

So, where to begin with competitor intelligence?

Start gathering info! Businesses need to begin on the competitor intelligence journey by gathering information from two sources: their competitors and their customers. Matching up customer wants and needs with competitor activity and direction is the simplest way to coordinate an approach that immediately covers off any ‘quick fixes’ or tweaks that can help improve the business offerings.

There are specialist providers for the likes of customer reviews and customer surveys, and where these offer further analysis and intelligence tools with user-generated content (UGC) created by customer reviews, this should be used to its full potential to gather insights. Consumer opinions and perceptions can also be gathered from other online interactions such as social media tags, social media responses and tags, as well as any offline direct activity.

To start collecting information on competitors directly, such data may come from one of the previously mentioned ‘less formal’ methods and can be completed on a basic level with just a quick Google search. It is worth noting here that there may be some information gleaned from UGC, as above, but this is more likely to be perception indications than statistical data, so a separate piece of work should be undertaken.

If possible, a business should seek to benchmark itself against others in its industry or sector in order to gain an idea of current positioning, future movement and business aspiration. This can be done either through the collation of data manually or through the use of a third-party online tool such as Feefo’s anonymised software (ensuring exact business-sensitive details of the business are never shared with its competitors and vice versa).

Competitor intelligence operations can, and should, be unique to every business and its market’s idiosyncrasies. Once the customer’s needs, wants and perceptions are acknowledged and understood, competitors can be analysed, the market understood and progress made. Although it may seem a daunting field to step into — after all, every piece of publicly available information on a competitor is also probably available on your business too — it is worth remembering that not many companies manage the competitor intelligence practice properly, or even at all — so it is always worth embarking and persevering with.


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