- March 25, 2019
- Posted by: Stacey Wisniewski
- Categories: Consultant, Marketing Strategy
A Quick Story
In my former life, years ago, I was on a team tasked with analyzing churn. My company had grown so quickly that we didn’t realize we were losing almost as many customers each year as we were gaining in our top accounts. As a B2B subscription business with high customer concentration, this was an issue. We found that our top two clients – and the biggest players in their industry – did not require their indirect channel to sell our product given regulatory risk. The indirect channel represented 20% of total client revenues. Competitors had exploited this and entered the market, providing commissions to dealers to sell their products instead. Over the course of several years, these players had stolen over 50 percent of our customers in that channel. It took our company two years to convince our clients to change their decision, and partner with us to offer their dealers commissions. It took another two years to implement that strategy and regain our market share. We were a global multi-billion dollar business who thought we “owned” the industry. We were wrong. Small, agile competitors had penetrated the industry under our noses and stolen our customers by providing commissions.
The morals of this story:
- Do a proactive competitive assessment on your business at least annually to keep your fingers on the pulse of your industry.
- Understand that your competitive landscape may differ, depending on your channels, products/service, and geographies.
Ten Reasons Why CI is Crucial for your Business
Competitive intelligence is essential to business growth, no matter what stage you are in. You should never use an excuse like “no one else does exactly what we do”, “we own the market”, or “we already know who our competitors are” to avoid doing a competitive assessment.
- Develops self-awareness – CI prompts you to assess your strengths and weaknesses vs. competitors, understand gaps, and create strategies to overcome them.
- Avoids complacency – If you are the sole provider in an industry, you lose the motivation to innovate – you stagnate. Competitors keep you on your toes.
- Builds your brand – CI helps you better communicate your brand by understanding how you provide distinct value to your customer base.
- Provides an indicator of demand – If you learn that more competition is entering your market, that may be a sign that demand is strong. The opposite can indicate a mature market, slower growth, margin pressure, and potential consolidation.
- Identifies an emerging trend – Competitors may launch new products or services or offer new features when they identify an unmet customer need or technology innovation. CI keeps you up to date on emerging trends.
- Encourages differentiation – Competitors will always try to provide a better, stronger, faster, cheaper widget. CI provides insights for you to deliver differentiated value to your customers.
- Uncovers unexpected partners – Competitors that provide something you don’t can expand the market. This can lead to collaboration, cross promotion, and down the line, potential mergers/acquisitions.
- Narrows your niche – If competitors are better than you in a particular area, you may decide to target a segment of the market where you have a competitive edge.
- Motivates strategic planning – By focusing on CI, you get out of the day-to-day. CI can provide insights that can lead to strategic decision making around investment, resources and technology.
- Prioritizes customer needs – CI provides a path towards a more customer-centric organization. Prioritizing your customers’ needs first will ensure ongoing satisfaction and loyalty.
WIZ’s CI Process
Step One: Collect all available information on your competitors. WIZ Advisors designed an infographic on Competitive Intelligence Sources that outlines the best sources for CI and the types of information each source provides.
Click here to access the infographic: http://wizadvisors.com/wp-content/uploads/2019/03/CI-Sources-Infographic-March-2019.pdf
Step Two: Summarize it in a matrix using Word, PPT or Excel. Put each competitor in a separate row and each type of information down each column (e.g. Products/Services, Customers, Partners, Strengths, Weaknesses, etc.)
Step Three: Turn the information into insights for your key stakeholders. What risks and opportunities does it present? These insights should provide the basis for your go-forward strategy.
I know conducting CI can be time-intensive, but I hope I’ve convinced you that it is an essential step in your strategic planning process. If you lack the resources or time to do a CI assessment internally, reach out. CI is one of WIZ Advisors’ core marketing services. Until next month.
Chief Marketing Strategist, WIZ Advisors
Mobile: (615) 934-1817