My company is recruiting. As part of the recruiting process, I interviewed half a dozen MBA grads or students yesterday. In these interviews, I asked the MBAs about their work experience to get a sense of what they consider to be a good process for developing a strategy, assessing a market, etc. One of the questions yesterday was on competitive intelligence, as that’s an important input to strategy.
What a disaster. Without fail, the MBAs told me that they do/did competitive intelligence by going online and looking at companies’ websites, and sometimes also by reading their press releases. Good god. And they told me this with a great deal of seriousness.
No wonder so many business owners (both those with MBAs and those without) roll their eyes at MBAs. Sometimes the cynicism about MBAs’ ability to truly deliver value to companies is well placed and sometimes it isn’t, but in the case of doing competitive intelligence in the real world, that cynicism would be very justified. (Disclaimer, I’m an MBA).
The best analogy I can come up with is that doing competitive intelligence by looking at a competitor’s website is like choosing a spouse based on an online-dating profile. When you look at what someone says about themselves online, you know you’re not getting exactly the full story. Chances are that they’ll only mention the good stuff, that what they say is not up to date, and everything is biased. If you do competitive intelligence (or choose a spouse) this way, you are lazy, you will be totally misinformed, and eventually you will pay the price for it. This is true for business to consumer (B2C) companies and for large public companies, and it’s a thousand-fold true for privately held Business to Business (B2B) companies.
Think about your own company’s online presence. Does it really reflect what the company is all about today? Does it broadcast information on your strategy and plans for the year? Of course not. And you can guess the same is true about your competitors’ sites.
Competitive intelligence is really tough. In some industries it’s extremely difficult – almost impossible – to do competitive intelligence on a repeatable, sustainable basis. Once in a while you may get nuggets of information that are extremely valuable, but these often come serendipitously rather than through a concerted and structured process.
But competitive intelligence can yield important information that helps a company develop an informed and effective strategy. So for those poor MBA candidates (and anyone else tasked with doing competitive intelligence), here’s what I suggest as competitive intelligence for the real world:
- Talk to your client, or your colleagues: The company’s sales team, front line staff and management may have good insight on competitors. They often don’t consolidate this information, so they won’t have a 360° view and just by compiling the bits of information they have, you gain a lot.
- At the very least you have to vet what you are see on competitors’ websites : Quite likely your client (or company) will know when the website is a load of garbage.
- Get names of customers or ‘friendlies’ from the client and call those individuals to get a view on competitors: Not everyone will want to talk, but based on my experience you will find a handful of people who are happy to give you their perspective.
- Talk to others in the industry: Use LinkedIn to find people in the industry and send them an Expertise Request. Again, not everyone will respond, but those who do will give you an unbiased view.
- Mystery shop: Not always possible, but if it’s reasonable that you would be in the market for the services that the competitor provides, engage them as a customer. You will learn how they service customers, how they position themselves, what kind of sales and marketing activities they undertake, and others.
- Engage the industry associations: You can find out what tradeshows the competitors attend, whether they do any PR aimed at the trade publications, and other tidbits.
- Look for employment postings: You can glean interesting information about a company’s direction based on who they’re hiring.
Good competitive intelligence takes a lot of effort in multiple directions, but by undertaking the activities above you’ll have a picture of the competitors’ reality – and you won’t be accused of being naïve, or lazy.