How to Implement a Competitive Intelligence Process to Grow Your Business

A few weeks ago, I talked about the importance of gathering competitive intelligence and how you can use it to enhance your competitive advantage.

For today’s post, I’m going to explore how to actually implement a competitive intelligence process (CI) process so you can grow your business.

Building & Implementing a CI Process

In order to practice CI and be successful, you must implement a process and structure to follow.

Only then will you be able to turn the data you’ve gathered into to actionable substance for managers and decision-makers alike to act on.

Celina Olszak (the University of Economics in Katowice, Poland) explains that “this process involves collecting, processing, analyzing, and distributing to top management and other decision makers any information about an organizations’ external environment.”

She also goes on to say that CI is a collective process that managers use to forecast their industry changes and the evolution of their present and future competitors.

It takes an analytical approach to put the fragments of data found on competitors and their respective clients into usable intelligence.

Figure 1 below shows a visual of the CI process:

The following CI processes according to Olszak are:

• Planning and focus – Starting with what is most important to management
• Collection – The collection of info. from multiple sources from inside and outside the company
• Analysis – Converting information into “actionable intelligence” on which strategic and tactical decisions may be made
• Communication – Organizing the info. and presenting the results to management
• Process and structure – Ensure CI can be done properly
• Organizational awareness and culture – Encourage departments involved to take part;  ulture must be accepting and motivated to complete CI efforts

Why CI Matters: IBM Case Study

In the years leading up to the early 1990s, IBM was one of the biggest information technology companies in the world.

They were a force to be reckoned with in their market, and soon enough, complacency settled in.

In 1993, IBM was losing billions of dollars and decided to bring in a new CEO, Louis V. Gerstner, who had a simple mindset: customers and competition.

It was clear that IBM’s customer loyalty was dissipating, and competitors were lining up to take them away.

Gerstner, IBM’s CEO, told his workforce, “We are too preoccupied with ourselves and not concerned enough with the outside” (Prescott, J.E., and Miller, S.H., Proven Strategies in Competitive Intelligence, 2001).

What he meant by that was they had lost sight of their competitors and customers.

IBM sought to reform itself, return to its roots on customer relationship, and tighten its focus on competition. To do so, IBM decided to invest more in CI and identified several information technology companies that were expanding on IBM’s customer base.

An executive team was formed, and each executive was assigned a competitor, tasked with analyzing their strategies and preparing countermeasures depending on the market. Each executive was then given a “virtual” CI team that was made up of other departments such as sales, supply chain, and manufacturing.

On top of that, a corporate team was established to oversee the program. This enormous initiative was not just meant to focus on CI but also to change the culture of CI at IBM according to Prescott & Miller.

Before the program launched, IBM ran their new CI teams through a pilot test. They soon learned from the test that CI needed to be a part of each level of management, from the executives all the way down to their sales reps:

“The question for the team evolved from Should we be strategic or tactical? to How can we be both. The CI program now contributes to development of strategy and also recommends near-term tactics.”

Source: Prescott, J.E., and  Miller, S.H. Proven Strategies in Competitive Intelligence, 2001.

They were able to demonstrate the program was only successful when everyone collectively committed to the CI process they had created.

It took IBM as a company to instill CI into its culture and make it a standard key performance indicator (KPI). The utilization of this new-found data gave IBM a competitive advantage and allowed them to react more quickly to their competitors’ strategies, as well as reengage with customers in a more meaningful manner.

To this day, IBM continues to be a best-in-class technology provider and a culturally fit CI organization.

Win/Loss Analysis

There are many forms and strategies within CI that when leveraged correctly can impact your sales dramatically. Ellen Naylor from The Business Intelligence Source argues that “Win/loss analysis provides the most actionable intelligence available to a company based on its sales results.”  

It is essentially the process of contacting all clients you’ve won or lost and discussing what went right or wrong, where can there be improvements. and what the competitor did right or wrong. This can result in either a win back of a lost client, competitor knowledge, or a great opportunity to learn what your key strengths are.

According to Naylor, there are seven steps to creating and executing the Win/Loss Process:

Figure 2: Win/Loss Process

• Target the right account – The first part of this process is to decide which accounts should be used in the beginning of this analysis. Naylor suggests starting with the clients that make up most of your revenue. This would also include past clients. The next step is set in place a schedule for how often you plan to do the analysis; that way, it is easier to track trends and data over time.
• Include CI in the sale process – Naylor states that keeping notes from start to finish of a sale is vital. An easy way to do so is via your CRM.
• Create a questionnaire – The goal here is to create a series of questions relevant to what you are looking to learn. Naylor lists four main categories that are important to take into consideration:
  • Sales Attributes: Professionalism, client relationship, positioning, and distribution
  • Company Reputation: Company image, financial stability, and reliability/quality
  • Product Attributes: Product capabilities, features, and price
  • Service Issues: Delivery and implementation process
• Win or loss – Make sure to define clearly why you won or lost the business. Key information is held here about either you or the competition.
• Conducting interviews – Be an effective interviewer. Listening skills and intuitive questions to responses are a must during this process. It is important that you come prepared without any bias.
• Tally results and analysis – At this part of the win/loss process, Naylor suggests summarizing each interview and developing an analysis for key trends. Often the client will discuss competitor information that would be useful to know. Through this analysis, you can identify strengths/weaknesses and then create actionable responses.
• Disseminate on a need to know basis – Distribute information only to the departments that would find it relevant to their needs. If something involving graphic design quality came up, it would be important to share that with marketing.

According to Naylor: “Like any other analytical tool, win/loss analysis is only useful if your company takes action based on the results. If properly conducted, win/loss analysis is one of the few areas that provides ROI to the competitive intelligence function.”  

Building CI: A Real-Life Example

Since my time at COACT, I’ve seen the many different ways that we utilize CI to influence campaign strategies.

A great example of this is how COACT positioned the tariffs as a pain point one of our metal fabrication clients.

We did this by discussing them directly in our calls and emails and writing blog posts that positioned our client as a thought leader on the tariffs.

These served a dual purpose for both inbound and outbound sales/marketing initiatives. We were able to provide helpful information in our outreach while at the same time increasing organic traffic to the site to capture additional leads.  

Also, our other marketing and sales touchpoints for this client related to how our client had a competitive advantage because they are domestic and worked in materials that were not affected by the tariffs, thus building their competitive advantage.  

Conclusion

I’ve defined the importance of CI and why it is so heavily practiced among successful businesses. I have also explored the win/loss analysis and gone over the steps needed to put a successful program in place.

Overall, CI has the capacity to truly bring meaningful insight into your organization. As data becomes more accessible over the internet and new technology exploits that access, companies will need to adapt in order to keep their competitive edge.

If used correctly, CI allows companies to react more swiftly to changes in the market and forecast potential threats and opportunities.