What is Competitive Intelligence?

Competitive intelligence (CI) is the process of collecting, analyzing, and disseminating information about your company's competitors, market, and industry. The goal of CI is to provide you with the information that will help you make impactful decisions. The information collected through CI can be used to inform a wide range of decisions, including product development, marketing, and business strategy.

For example, let's say your company, ABC, is in the market for a new software solution. You have identified two possible competitors, XYZ and QRS. In order to make an informed decision, you would use competitive intelligence to learn more about the two companies and the products they offer. This could involve researching the companies online, reading customer reviews, and speaking with industry professionals. With the knowledge you gain, you can make a more informed decision about which product is best suited to your needs and how to best position your own offering.

Competitive Intelligence Definition

Competitive intelligence is defined as “The analytical and intellectual process that transforms disaggregated market, customer, competitor, supplier, technology, and other key competitive data, information and knowledge into usable, actionable intelligence to the key decision-makers. Focus is the key driver of change. The aim is future-oriented,” by Joseph H. A. M. Rodenberg, in his book Competitive Intelligence, and Senior Management.

Companies perform competitive intelligence by gathering and analyzing information collected about the industry, market, business environment, products, and competitors. Competitive intelligence helps your company gain a competitive advantage in the market by constantly making you aware of your competitors in order to stay ahead of the curve.

Competitive Intelligence Advantages

Competitive intelligence is crucial because it assists you in making informed decisions that improve customer experience. Using competitive intelligence, you can comprehend the strengths and weaknesses of your competitors and operate accordingly to capture the majority of your niche.

Here are 10 advantages of competitive intelligence:-

1. Product information:

Competitive intelligence gives enough information about what consumers are saying about different products on different platforms. Using this information, your company can design a product that satisfies most of the expectations of consumers. Further, by developing a suitable product for the customers, you can create a firm space for your brand in the market.

Apart from designing a new product, you can also redesign your product by understanding the mistakes it has from the lens of your customers and the market. You can get insights into how your product is perceived, and if you find even a minor change that can benefit you, you must proceed and test how it goes. Also, you can make major transformation decisions for your product with competitive intelligence that has the potential to upscale your business.

2. Sales Opportunity:

Competitive intelligence is the best tool that can spot possible sales opportunities. When competitive intelligence highlights negative mentions about a competitor’s product, it is a massive opportunity for you to promote your product and gain the attention of the audience towards your offerings.

With competitive intelligence, you can start targeting the audience by understanding the concerns they raise and creating a business strategy that helps the sales team increase sales. You can optimize the sales process and improve your market presence. Furthermore, if you have the information regarding competitive deals, sales reps can be trained to deal with customers accordingly on sales calls and generates higher sales number by enhancing customer perception.

3. Marketing:

With the help of competitive intelligence, companies can easily track social media for various metrics such as follower count, engagement levels, marketing campaigns, and much more. Competitive intelligence also throws light on competitors’ audiences when a customer mentions a competitor on social media. With this data, you can define your target audience and get a clearer picture of what actions you must take to instate best practices.

Competitive intelligence helps you make a necessary strategic shift in your marketing operations which further improves your brand image. Your marketing team can tap into actionable insights and run targeted marketing campaigns to attract more customers to your products and services.

4. Identify Opportunities:

Competitive intelligence provides your organization with competitive information that you can leverage to identify various opportunities to grow your business. By analyzing historical data, you can find customer behavioral patterns and market trends to gain knowledge about what might work in favor of your business. You can determine how to attract potential customers by following a competitive strategy.

Using competitive intelligence, you can comprehend the competitive environment well and work towards increasing your Customer Satisfaction (CSAT) score. With the actionable information you get from performing competitive intelligence, you will be able to figure out easily if there is a need for a new product or service launch to get ahead of your competitors.

5. Revamp Business Strategies:

Competitive intelligence is a great way to rethink your business strategies. Since you get the overall view of what’s happening inside and outside of your business, you can very well articulate and revamp your business strategy to stand out in the competitive landscape. The primary aim here should be to find the flaws in the business path you are following with respect to the industry standards and your business capabilities.

Having a competitive intelligence strategy assists top management in making profitable decisions and restructuring the ways in which a business is run. You can also recognize any potential threat that can disturb your business system and operate accordingly. Moreover, you can see every aspect of your brand from different angles and reach a common point that benefits the whole organization.

6. Reduce Cost

By gaining a better understanding of your competitors and the market, you can make more informed decisions on how to allocate financial resources and set prices. With competitive intelligence, you can identify and analyze the cost structures of your competitors which can help you determine areas where you can cut costs without sacrificing quality or performance. Understanding your competitors' pricing strategies can help you set prices that are competitive while still allowing you to make a profit.

On top of that, you can anticipate industry trends and make strategic investments in research and development to stay ahead of the curve and avoid costly missteps. And on comprehending your competitors' distribution channels, you can recognize cost-effective ways to reach your target market, and optimize your own distribution strategy.

7. Develop Innovative Products

With the help of competitive intelligence, you can identify opportunities for innovation and differentiate your products from your competitors. You can effortlessly identify areas where your company needs to improve products or develop new ones. For instance, you discover that a competitor's product is lacking a certain feature. You can use that information to develop a product that includes that feature and thus differentiate it from the competition.

Additionally, competitive intelligence also helps you to stay up to date on industry movements and changes, allowing you to anticipate future market needs and develop products that meet those needs. There is a higher chance that your authentic product get enough traction and generate higher revenue.

8. Increased Profitability

One way that competitive intelligence can assist you to increase sales and revenues is by providing you with critical information concerning competitors and the industry. It helps you to improve your cost structure by understanding the cost structures of your competitors. You can pinpoint areas where it is wise to improve efficiency by investing in the right program for high profitability.

Also, by keeping an eye on the competition, you can quickly adapt to changing market conditions and shifting consumer preferences, helping you to maintain a competitive edge and protect your market share for getting the desired ROI. Moreover, you can ensure that your company's revenues and profits remain stable over time, even in the face of market fluctuations.

9. Informed Decision-Making

The outcomes of competitive intelligence are backed by data and thoroughly analyzed, so it becomes easy for top executives to make informed decisions without much hustle. Competitive intelligence aid your brand in creating a benchmark according to which you can take decision about the different activities going on in your organization.

Also, competitive intelligence enables you to introduce a new program conveniently as you can predict whether your company will be able to pull off that very well and generate revenue. Ultimately, it helps you to make proactive decisions that will position you for future success.

10. Improved Pricing Strategies

Competitive intelligence pushes you to rethink your pricing strategies in accordance with the industry standards and the market you are serving. It helps you to assess and understand the price elasticity of the market, which is the responsiveness of the demand for a product or service to a change in price. Using this information your company can make decisions about how to set prices for particular products and services.

Competitive intelligence helps you apprehend the nitty-gritty of the pricing of the product and service similar to yours in the market. If the market is very price sensitive, your company may decide to price the products lower to be more competitive, whereas if a market is less price sensitive, you may decide to charge higher prices.

Sources of Competitive Intelligence Data

Competitive intelligence programs require data to get actionable information for analysis to gain meaningful conclusions on which actions can be taken to make the business successful. You can gather information from multiple sources mentioned below for the process of competitor intelligence:-

1) Social Media

The social media activity of customers provides tons of information regarding the market and factors that influence their decisions. Information gathered from social media provide customer reviews that indicate what customers think about you, your competitors, and things they want brands to include in their products and services. Today there are several social media platforms that can be utilized for gathering data for performing competitive intelligence and understanding competitors' strategies for promoting their offers.

2) Competitors’ Websites

For in-depth competitive intelligence research, scrutinizing competitors’ websites is a must. Looking at their websites, you can come to know what they are up to and if or not they have come up with new features for their product. You can track the activities of your competitors through their websites to comprehend their operating procedures. By gathering data from your competitor's websites, you can fix a standard to measure your performance through competitor analysis and improve to obtain a consistent flow of customers.

3) Market Research Reports

Every year, several market research reports have released that show the overall status of the market and the ways in which different companies, including top players, are performing. Using the numbers in the report, you can improve your competitive intelligence efforts as you can become well aware of trends and current facts. As these reports discuss ongoing processes followed by brands to achieve a particular goal, you can refer to their data and figure out key components after analyzing that to set a benchmark to track your performance.

4) Customer Survey

By surveying customers, you can gain valuable insights into their experiences and preferences, as well as get a chance to learn more about your competitors' products and services. A customer survey reveals what your customers think of your brand, and you can include direct questions regarding competitors to attain details about what you are lacking so far. There are various methods you can use to conduct a customer survey, including online surveys, phone surveys, or in-person interviews. Consider the methods that will be most effective and convenient for your customers.

5) Analysis of Products and Services

An analysis of products and services involves examining the features, benefits, and overall value of the products and services offered by your company and your competitors. The analysis helps you understand the potencies of your own offerings, as well as identify opportunities for improvement or innovation. By conducting an analysis of products and services, you can gather valuable market intelligence data that help you to identify any potential gaps in the market and fulfill that to stand apart from the crowd.

6) Tracking News and Industry Publications

With tracking news and industry publications, you can stay up to date with the latest news, trends, and developments in your industry. You must subscribe to relevant industry publications and follow them on online platforms they publish their findings. Further, consider joining industry organizations or professional associations to connect with other professionals in your field. These organizations often provide access to industry-specific news and publications that you can utilize as a data source for your competitive intelligence program.

7) Industry Events and Conferences

For data collection, industry events and conferences are great sources. Not only can you gather data about the current market, but get information concerning the shifts coming in the near future that you can follow to get ahead of your competitors. Additionally, these events bring together experts and professionals from across the industry, providing an opportunity for you to network, learn about new trends and developments, and gather information about your competitors.

Steps to Proceed With Competitive Intelligence

To pursue competitive intelligence best practices, you need to proceed with a structured and systematic approach. You have to regularly monitor the activities of competitors, track industry trends and developments, and analyze the strengths and weaknesses of a company's own products and services.

To carry out these activities successfully, you must follow the below-given steps:-

1) Plan

You need to start with planning for your competitive intelligence endeavors by defining the objectives that clearly answer the question: What do you want to know about your competitors? Other than that, you must identify the sources from which you will find information about your competitors.

2) Identify Your Competitors

Since there are a lot of similar solutions as yours in the market, you cannot add thousands of companies to your list as competition. Often companies provide package products and services that you might not have at a particular point in time. For a proper competitive intelligence process, identify your direct competitors.

3) Collect Information

Gather as much information as possible about your competitors, including their products, pricing, marketing strategies, and competitive advantage, so that you do not miss on any aspect that can help you optimize your processes. Follow an effective information-gathering procedure with the help of data collection tools to get maximum benefit for your organization.

4) Analyze Data and Act on Insights

After analyzing the collected data, look for patterns and trends that tell you about your competitors' strengths and weaknesses. Use the analyzed information to inform your own strategic decisions and improve your competitive position in a manner that boosts your company’s revenue.

5) Share Insights with Decision-Makers

Share your findings with the relevant stakeholders in your organization, such as executives, sales teams, and product development teams, so they can gain a clear understanding of the market position from various angles. Further, stay up-to-date as competitive intelligence is an ongoing process. Keep track of developments in your industry and continue to gather and analyze information about your competitors on a regular basis.

How do Customer Insights Help Competitive Intelligence?

Customer insights provide the perception that your customers hold about your offers. Using this you can make a healthy comparison with your competitors to make required transformations that are critical in nature. For improving your competitive intelligence process, customer insights are a fruitful input as they reveal priceless information.

For example, Clootrack’s CX insights report on Air Purifiers: Top 3 Aspects Driving Negative Customer Experience discloses the top 3 elements that push the customer away. They are:-

1) Light Type and Effects

2) Filter

3) Effects on Allergy/Breathing

Using this information, any air purifier company can measure its performance in the market against others and improve its position for the benefit of customers and the company.

5 Examples of Top Brands Using Competitive Intelligence

Here are 5 real-life examples of well-known companies using competitive intelligence:-

1) Amazon: As one of the world's largest e-commerce companies, Amazon uses competitive intelligence to track the activities of its rivals and monitor market trends in order to identify new opportunities and stay ahead of the competition. They also use this information to inform their pricing, product development, and marketing strategies.

2) Facebook: Facebook uses Competitive intelligence to track the usage and engagement statistics of its rivals like TikTok, Snapchat, and Instagram. This helps them to identify new trends, and opportunities and also to develop new features that would help keep their users engaged and attract new ones.

3) Netflix: Netflix uses competitive intelligence to track the content and marketing strategies of its rivals like Hulu and Amazon Prime. This information is used to inform their own content development and marketing strategies, which in turn will help them to attract and retain subscribers.

4) Intel: Intel, a leading technology company in semiconductors and microprocessors, uses competitive intelligence to track the R&D and patent activity of its rivals in order to stay informed about any new developments in its field. They also use this information to inform their own R&D strategies to perform at an optimal level.

5) Google: Google uses competitive intelligence to track the search queries and usage statistics of its rivals like Bing and Yahoo. They also track the trends on other search engines and related services like Amazon Alexa, Siri, and Bixby to keep an eye on the latest technology and feature development in the field of natural language processing and voice search.

What are the Top Competitive Intelligence Tools?

Your brand needs efficient tools and techniques to bring better outcomes as an end product of executing the competitive intelligence process. You need to perform market research, social media monitoring, and analysis of publically available information such as press releases, and industry reports, and a competitive intelligence tool eases these tasks.

Here are the top competitive intelligence tools you can opt for to make better decisions:-

1) Clootrack

Clootrack is a customer experience analytics platform that provides you with competitor analysis and market research as one of its solutions that helps your company to connect with your customers like never before.

2) Semrush

Semrush helps you learn about your competitors' traffic through its traffic analytics solution. Also, it allows you to get insights into competitors' strategies so you can revamp your operations if necessary.

3) Ahrefs

Ahrefs allows you to perform organic traffic research, check backlinks, and uncover whether your competitors are doing any paid search advertising. By knowing these, you can plan to transform your strategies accordingly.

4) Crayon

Crayon provides you with competitive insights and empowers you to find relevant opportunities and make strategic decisions. It helps you increase the effectiveness of your proceedings with competitive intel.

Leverage Competitive Intelligence to the Fullest

Competitive intelligence is used to inform a wide range of business decisions, including product development, pricing strategy, and marketing efforts. It also helps your company identify new opportunities and possible threats in the market.

Efficacious competitive intelligence research requires a combination of both qualitative and quantitative data, as well as the ability to interpret and analyze this information in the context of the company's overall business strategy. It is an ongoing process that requires regular review and updating to ensure that your company stays ahead of the competition.

Overall, competitive intelligence is a vital tool for your business to stay competitive in today's rapidly changing marketplace. By gathering and analyzing information about competitors and the market, you can make informed decisions that provide you with a competitive edge and help you achieve your desired business objectives.

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