The 3 Priorities Of Competitive Intelligence
Every time there’s a cool new SaaS company out there, I’m one of the first to join the beta list, usually completely regardless of what the thing actually does. Part of that is because I’m a big nerd when it comes to software and apps, but I feel like a small piece of all of us enjoys playing around with tools before we know what they can really do.
My last post was all about the fun and cool tools — but I didn’t explain how and why you should be using them. That’s what this post is all about. We’ll be reviewing the three main goals of competitive intelligence, and by the end of our time together here you’ll know how to use the information you gathered from the research tools I shared to start creating competitive monitoring systems for your business.
The Competitive Research Equilibrium
Let’s begin with the fork in the road toward Competitive Intelligence: there’s (1) Research and (2) Monitoring. Research is where you’re finding, dissecting, and building a Competitive Dossier on each of your biggest competitors. Monitoring is a process of setting up alerts, spotting trends, and getting the inside scoop on upcoming changes in your industry.
It’s hard to draw a line between investing time in research and setting up a monitoring system. Research can be a real rabbit hole — one that can suck you in for weeks, or even months. That’s why I created the Research Equilibrium. This is what I call the balancing point between competitive intelligence research and monitoring processes.
Here’s what the Research Equilibrium states:
When you’ve reached the point where you have at least 5 Competitive Dossiers OR you’ve spent over 20 hours on competitive intelligence research, you need to move on to monitoring.
The only caveat to this rule is that if you hit the 20 hour mark and are moving on, you need to at least have the names, social profiles, and websites of your top 5 competitors.
The Research Equilibrium has two possible conditions because when it comes to massive or invisible competitors, research can start counting against you.
If there’s too much information that it would take a whole team a month to sift through everything (think of a company like Berkshire Hathaway) or there’s so little information that you’re scouring page 43 of Google search results for something useful (think a privately-held biotech firm in the Cayman Islands), then it’s time to move on.
There are specific strategies for these cases that I’ll share sometime in the future. That happens about 2% of the time though, so for now let’s assume we fit into the 98th percentile!
The 3 Priorities
Competitive intelligence can be misused or wasted, so it’s important that we keep in mind the three priorities of Competitive Intelligence:
- Carve out an authority position for your business
- Address comparison questions head-on
- Create left-field products
Think of them as the “Competitive Intelligence Laws.” These three priorities will guide the actions you take whenever you’re engaging in either research or monitoring strategies. They’re not rules, but rather they guide how you interpret (and react to) the information gathered from your research and monitoring processes.
Priority #1: Build Authority
Come on, who doesn’t want to be an authority? It’s an obvious and common goal, primarily because when you’re an authority, it’s easier to sell and you can charge a premium. Pretty good combo. So while your competitors are out there using traditional PR techniques and outsourcing content marketing (come on, man), you’re going to instead be focused on building authority by being the first and being the best.
Boy, that was easy to type. I GET it — it’s easier said than done to just “be the best.” But as you conduct CI research and install your monitoring systems, you’re going to be given opportunities to set yourself apart and build authority.
I’m not here to tell you how to be the best in your industry. But I am telling you that if you use the competitive intelligence strategies I share with you, you’re going to start spotting bigger and bigger authority-building moments.
Priority #2: Address comparison questions head-on
Have you ever been in the situation where a customer asks you how you’re different from your biggest competitor? More to the point, have you been able to stand up straight and deliver a triply-whammy differentiation statement to that customer?
It feels pretty good.
This is the second priority of competitive intelligence. Being able to knock down your competitors’ biggest strengths right out of the gate not only gets you sales, but it contributes to the first priority in solidifying your authority position.
Here’s an example. I hold a lot of webinars on behalf of clients. Product launches, announcements, internal trainings, you name it. So I’m intimately familiar with every single webinar platform out there. Most of them suck.
One of the platforms that is at the top of the industry is called WebinarJam, and they exhibit their competitive intelligence very clearly. When you go to their website, a very prominent button is displayed that says “Using GoToWebinar?”
They’ve done their homework and know that GoToWebinar is a market leader — one for which they need to address comparison questions head-on. And when they do that, something unique happens psychologically for the visitor — all of a sudden, WebinarJam is on their side.
They’ve given differentiating information against a product that, in the visitor’s mind, was the only real option in the marketplace. Immediate authority and differentiation.
Priority #3: Create left-field products
Our third priority, creating left-field products, is the lowest priority on our list, yet also your biggest opportunity.
Let me explain.
The best way to describe a left-field product is by using the zig-zag example we entrepreneurs love. When everyone else is zigging, entrepreneurs zag. Well, you need to do the same with your products.
When the industry is zigging, your product needs to zag. It needs to be different. It’s how every product in the history of humanity has actually gotten into the history books. The Model T zagged against horses, the iPhone zagged against shitty smartphones, andUber zagged against a complacent taxi industry.
A few years ago, supercar manufacturers were all on a cocaine-induced bender on who could build the fastest car. There was a period of time in which the world record was being constantly broken, and it seemed like the traditional sports-car manufacturers were sitting on the sidelines.
Lamborghini, however, decided to take things into their own hands. They realized that competing on speed would lead them to compromise their mission, which was to build the best car possible. Not the fastest, the best.
I’m a HUGE car buff, so I appreciate that statement. The beauty of driving isn’t in gaining 3mph on your top speed — especially when that top speed is over 250mph. The beauty of driving is in… well, driving. It’s a combination of a lot of things — speed, handling, comfort, acceleration, braking, you get the idea.
Lamborghini knew this, so they decided to shift gears. (sorry, couldn’t resist)
They decided to make a car that made handling priority #1. They created the Sesto Elemento, a car made entirely out of carbon fiber, which resulted in it being incredibly light but also incredibly strong — two features necessary for great handling.
Combine that with the fact that every Lamborghini is four wheel drive, and you now have a supercar that sticks to the ground no matter how fast you’re flying around a corner. In this example, Lamborghini zagged — and, almost like clockwork, suddenly every supercar was bumping up their carbon fiber usage. But not before Lamborghini had carved out a nice lead.
Your product needs to zag — but that’s a tall order. It’s kind of like sitting a designer down and telling them to create something beautiful. It doesn’t work like that.
Left-field products are created backwards. They require you to understand your industry so well that you can not only spot hidden inefficiencies or pain points, but also reverse engineer the entire system to cut out those inefficiencies like a cancer. That’s how paradigm shifts happen. Lamborghini completely exited the race for top speed and said “we’re going over here, where we actually enjoy building cars.”
So why is this the third priority?
Clearly, creating left-field products is the path toward domination. Well, its third priority for two reasons. First, in order for a left-field product to have enough chutzpah to make it, you need to know how to clearly differentiate yourself from your competitors (priority #2) and have enough authority that the public trusts you with your new left-field product (priority #1).
Even then, it will be tough to pull off. Lamborghini risked a lot by building the Sesto Elemento. And just look at how difficult it was for Apple to win over the public with the iPad.
Now, I completely admit it. While creating left-field products is priority #3, it holds the most promise for your business. Just imagine bringing the next iPad to your industry. How disruptive would that be?
Competitive intelligence gives you a map toward creating that disruption. By spotting trends early and constantly questioning the sustainability of those trends, you can get a massive lead on the competition.
If you spot them early enough, your next product could gain an early-mover advantage. Be careful of industry-wide trends though, since they’re often volatile and short-term focused. Just like the trend toward top speed in the supercar industry, your own industry will tell you it’s interested in one thing when, in reality, it’s a superficial interest that will fizzle out.
If you can call the industry’s bluff by spotting fads or bubbles, you can skip over the part where you build a product that gets to market after the fad is over — and start building for the real desire your customers have. Lamborghini knew its customers cared a lot less about top speed than the entire driving experience.
By spotting trends in your top 5 competitors’ social feeds, you can get an early heads-up on new announcements.
Your left-field products will head in the opposite direction of your competitors, so it’s crucial to know what they’ve built, even before they announce it.
That gives you an opportunity to build “preemptive authority” that can shield you from short-term industry changes and buy you time to truly innovate. It also provides an insight into consumer sentiment.
The iPad was actually designed before the iPhone, but Apple put it on a shelf for years because they knew that the market needed to mature. The world had yet to accept a large touchscreen phone, so how would they react to an even larger touchscreen tablet? One disruption at a time.
Data like international site traffic and unknown demographics are hidden goldmines that your competitors completely are totally unaware of. That information is readily available to you through competitive intelligence tools that I review in my Research and Monitoring (coming soon) articles.
Needless to say, left-field products deserve a post of their own, but it’s important to understand where they lie in the priorities of competitive intelligence. It’s last, but for good reason; once you address the first two priorities, this one becomes a hell of a lot easier to tackle, and a WHOLE lot more rewarding.
At this point we have a clear understanding of what competitive intelligence helps us accomplish. With that new understanding, you can start taking action toward building your authority, differentiating yourself from the competition, and beginning to spot left-field opportunities.
To do that, here’s what I recommend you do:
- Read my previous post on Competitive Intelligence Research Tools to create 5 Competitive Dossiers for your business
- Once you reach the Research Equilibrium (remember — the lesser of 5 Competitive Dossiers or 20 hours of competitive intelligence research, provided you have a name, website, and social feeds for 5 competitors), start building a monitoring system as outlined in my upcoming post.