Competitive intelligence (CI) is a process of collecting, analyzing, and using information about competitors or clients that aims at improving a company's competitive advantage. It helps understand the competitive environment, challenges, and opportunities, and use data properly to develop effective strategies.
In this article, we’ll review the importance of competitive intelligence, its types, sources, find out how to conduct competitive intelligence, and explore several best practices and examples.
Why is competitive intelligence important?
The market changes all the time, so you need to stay ahead. You can’t build a successful business just on guesses and assumptions. With competitive intelligence, you can understand competitor motivations and behaviors. Knowing your rivals’ behaviors and objectives allows you to shape product development, pricing, and brand positioning. Competitive intelligence is the basis of your company’s strategy.
It enables firms to gather data about the industry, environment, rivals, and competitive products or services and analyze them. CI helps:
- identify and analyze industry trends to decide on the future moves;
- obtain knowledge and insights into expectations, trends, and technologies;
- analyze strength and weaknesses;
- allocate resources more efficiently;
- improve ROI;
- boost the process of product launching;
- predict the steps of competitors;
- make the right business decisions.
Now when you know about the importance, let’s proceed to the types.
2 Types of Competitive Intelligence
The main objectives of competitive intelligence are to allow a company to understand its market, make confident strategic decisions, and increase ROI. For these purposes, businesses use different types of CI.
Competitive intelligence activities can be divided into two main types:
- tactical (it’s a short-term process that strives to contribute to the solution of such issues as capturing market share or increasing profits);
- strategic (it helps with long-term issues such as key risks and opportunities a company can face).
Now when you know the main types, it’s time to move forward and explore the sources of CI.
7 Sources of Competitive Intelligence
- Social media platforms
- Sites of competitors
- Syndicated research reports
- Marketing tests
- Product reviews
- Pricing and packaging updates
- Changes in positioning and messaging
We’ve prepared seven sources where you can find useful data about your competitors. So let’s review them.
- Social media platforms. Analyzing the comments of customers on different social media platforms enables you to compare your products with competitors’ alternatives. Honest feedback can help you improve your products and services.
- Sites of competitors. Competitors’ websites give you free access to their products and services, provide you with insights into their business, and share information on the updates. Many tools can help you make a competitor analysis like SEMRush (to monitor changes in competitors’ ranking) and Ahrefs (to check any URL’s top organic keywords and find out how much traffic your rival obtains on them).
- Syndicated research reports. These reports are very important since they provide data on growth forecasts, company profiles, market-related numbers, and trends. With the help of these reports, you can obtain an overview of your market, main competitors, and what makes them special.
- Marketing tests. Landing pages and A/B tests are particularly important as they allow you to have an insight into the plans of your competitors. By monitoring campaign tests of rivals you can figure out what works best and what doesn’t need to be implemented.
- Product reviews. You can also analyze the third-party product reviews. This information helps you find out what customers of your rivals like and dislike about their products or services. This way, you will obtain important facts about competitors: their strengths and gaps. Knowing what consumers think about goods enables you to identify the weaknesses of your competitors and receive a competitive advantage.
- Pricing and packaging updates. Changes made to packaging and pricing also affect marketing campaigns. That’s why it’s critical to share them with internal teams, with sales, for example. These updates show shifts in the rival’s strategy. For instance, if a competitor expands the business.
- Changes in positioning and messaging. It’s worth mentioning that if your competitor changes messaging or positioning, you need to monitor those changes. This way, you can gauge the direction of your rival. For this purpose, team members visit the competitors’ sites and focus on home pages, blog posts, landing, and product pages.
You are aware of the main sources of information now, so let’s consider several steps to conduct CI.
How to conduct competitive intelligence?
- Identify direct and indirect competitors
- Choose the main focus areas
- Gather the necessary information
- Conduct a competitive analysis
- Share your findings
- Use the information to let your company benefit
Although competitive intelligence is essential for every business yet not everyone is well versed in this process. To help you get started, we’ve prepared several steps.
- Identify direct and indirect competitors. First of all, you need to know your competitors. If you have a lot of them, identify at least the top five direct rivals. Afterward, determine the indirect (firms in the same industry that don’t compete with you for customers), aspirational (companies in the same industry that can give inspiration for your business), and perceived competitors (businesses that can come up during the sales discovery process yet don’t compete with you). Understanding your competitors means knowing your competitive environment.
- Choose the main focus areas. Once rivals are identified, it’s time to determine the areas you want to focus on to collect data. You need to gather all the information you can obtain online and from your front-line teams. To process data more efficiently, it’s worth narrowing the search circle.
- Gather the necessary information. During this step, you have to explore the sites, products, social media platforms, and content of your competitors. Find detailed information about each of them.
- Conduct a competitive analysis. At this stage, a manager breaks down the information and pulls out the main trends and the most important data. After, the information is organized in the right manner to convey it to all company’s teams. You need to create competitor profiles and continue to track their updates: changes in products or services and customer reviews.
- Share your findings. To improve the strategies, share your findings with stakeholders. You can do it by conducting a meeting, sending emails, or using an internal chat. Store data on a reliable platform so that your team can access it easily.
- Use the information to let your company benefit. Make your data actionable for each team of your company. Your marketing team can use it to start new marketing initiatives while the sales team can use this data to improve scripts and sales processes.
Let’s jump into the best practices.
Competitive Intelligence Best Practices
To be successful, companies have to obtain customer trust, provide excellent customer experience, and high-quality products. However, this process takes time and effort and requires collecting data about competitors and customers to know what to expect. CI is the key since it allows businesses to gather and analyze the necessary information. In this section, we’ve prepared three competitive intelligence best practices.
- Create competitive habits. CI is a constant process, that’s why it isn’t enough just to collect data once. When you share competitive intel with your team, remember to do it wisely. There’s no need in sharing every new piece of information with little to no context with your sales team. Team members will spend a lot of time processing it, so it’s better to analyze how useful this data is first.
- Provide relevant insights. The timing of the insights can sometimes be extremely important. The company’s team often faces the lack of the necessary data when they need it. That’s why you should have a channel for internal communication to share insights and different updates on competitors and customers on time.
- Analyze your wins and losses. Often, companies don’t know why they've won or lost a deal. They rely on accurate feedback from their sales reps when, in fact, it would be much more effective to interview customers and see the notes in CRM.
Let’s grab inspiration from the examples below.
Examples of Competitive Intelligence
For successful operating, each business needs to know its external environment. That’s why companies in different industries consider competitive intelligence in their strategies. Further, we’ll review examples where entrepreneurs use the knowledge of CI.
- Startups. Since large companies have big budgets, resources, and necessary technology, startups adapt to competitive intelligence insights. This way, they can understand their customers and offer better solutions. Let’s take Airbnb, for example. This company managed to satisfy the needs of clients by using technology and consumer insights.
- Airline tickets. A great example is how airlines use competitive intelligence. They change the prices on their tickets every day based on the information they obtain. For instance, if competitors increase the prices on a certain route, this company will do the same to receive good revenue. Besides, airline companies track the actions of potential customers to make price adjustments. For example, they spot users who search for the same flight details several times and increase prices.
To improve their competitive advantages, brands need competitive intelligence since it increases the chances for success. They search for data on websites, in reports, and customer feedback to understand the gaps and undertake several improvements.
- The article “Competitive Intelligence Definition” defines the term, explains how it works and covers the types.
- The article “7 Steps To Set Up A Successful Competitive Intelligence Process” covers the necessary steps to conduct a successful competitive intelligence.
- The article “8 Sources of Competitive Intelligence to Boost Your Market Research” provides readers with several sources of competitive intelligence to improve your business.
Last Updated: 23.04.2021