Competitive intelligence & market intelligence consultants: why your business needs them
Running a business in the present business climate requires more than grit. Technology, including the internet and related digital technology, is literally evolving every day, and these changes extend to everything and everyone that uses tech products. Sales channels and patterns, consumers’ tastes, logistics, marketing, and pricing strategies are constantly fluctuating. Ease of entry on digital platforms has multiplied the competition in all fields and shrinked the market share of most businesses. To grow, make money, sustain your profits and stay ahead of the competition in this type of environment, you need information. You need intelligence that would help you keep track of trends, predict future movements, and understand your competitive environment and the challenges and opportunities it presents. This is what competitive intelligence and market intelligence consulting and consultants do. They help you keep a pulse on your customers, competition, industry, and marketplace.
What is competitive intelligence?
Simply put, competitive intelligence (or CI) involves gathering and analyzing data on competitors, customers, competitive goods and services, and other market factors; and using that information to build the competitive advantage of a business.
Market intelligence, on the other hand, provides relevant data on customers, consumer behavior, past and current patterns, trends, and other dynamics of the markets.
It’s important to note that although in the strict sense, competitive intelligence is mainly about competitors. In practice, however, many CI consultants provide intel on customers and their behaviors too.
So how exactly do competitive intelligence differ from market intelligence?
Competitive intelligence provides information on your competitors’ strengths, weaknesses, market share, market penetration, tactics and strategies, and how they impact your business.
CI gives insight into how you can edge different competitors out of the market.
Marketing intelligence gives info on customers’ population, demographics, demand, and consumption.
Marketing intelligence shares information that will guide you in improving existing products, developing new ones, improving customer loyalty, and reaching new markets.
What competitive intelligence consultants do
Constantly benchmarking your business performance is not just a nice idea; it’s a key strategy to remaining relevant in the marketplace. CI consultants help you know where you stand alongside the competition, the best ways to compete, and what strategy should be deployed. Their investigations pinpoint areas where you’ve dropped in performance and which are not in concordance with market conditions. In addition, they spot trends you can quickly take advantage of and identify drops in competitors’ failings that you can exploit.
Product and Pricing Intelligence
This may come as a surprise to some, but CI consultants also conduct product and pricing intelligence. By benchmarking your price points and products or services on a like for like basis with those of direct and indirect competitors, their report is able to guide your R&D and product positioning/repositioning efforts in the right direction. Furthermore, their data on the features and specifications of other products will help you discover the gaps in your present product offerings, which will, in turn, inform your R&D activities.
Anyone diligent and determined enough can make the time to collect numbers and facts on a subject. But it requires special knowledge to pick out the right data and translate it into actionable insights. CI consultants assist clients in applying intelligence reports into a strategy. That way, clients can predict and be ready to counteract their rivals’ next moves or find new opportunities for growth with a great degree of accuracy.
How do we apply competitive intelligence to pricing & decision-making?
One of the key reasons business owners hire a competitive intelligence consultant is mainly to get support in making informed decisions. Another is to gain a first-mover’s advantage in if not all but vital areas of their business. Take, for instance, you want an improvement in how you price your products and services. Normally, you would share your pain points with your CI consultant.
When you get the report, it won’t just be in numbers, graphs, and interview transcripts. They will translate their findings into a story of some sort that can be easily understood. This will then guide you in making better pricing decisions or decisions in other business areas. Depending on your pain point, pricing intel usually contains info about current market sentiments and ways you can adjust your pricing to them.
A case study of Competitive intelligence
To better illustrate how competitive intelligence gathers intel in real-life, let’s consider this case study:
The first case study we’ll be looking at is that of an eCommerce trader (who we’ll call A) who sells photo frames on Amazon.
A sells beautiful photo-frames on Amazon just like many other sellers. In his category, his ranking within a 12-month period is consistently between the first and fifth seller, and he has an overall rating of 3.0%. Every month, A ships out over 3,000 to 4,000 picture frames, and he has 2,987 reviews. During a CI investigation into the top sellers in the photo frame category, the product with the highest review rating has 3.3%. This shows us that A is in a good place review-wise. However, for most sellers in this space, the norm is 2.0%. To determine why the top five sellers of picture frames, including A, are making a killing way above others, a CI consultant would delve further into the following: type of images A used, his product description, what incentives he provides (if any), the emails he sends buyers, the volume of message, type of language used and call-to-action techniques among other things.
Is competitive intelligence legal? Is it ethical?
The short answer to these two commonly asked questions is a big YES. Going by the law in most countries, competitive intelligence is 100% legal (although some regions may attach some conditions to this activity).
Now, let’s delve a bit into why collecting reports on a business rival(s) is considered legal and not morally wrong.
Understandably, many are concerned about the legality of conducting a CI research. The confusion arises because people tend to associate competitive intelligence with corporate espionage. The reality is there’s a significant difference between the two actions.
Where corporate espionage involves spying or gathering information about another business entity through unethical and illegal means, competitive intelligence carries out the same action using legal and ethical channels.
When searching for information on almost any subject, the internet is a rich source of intelligent data if you know where to look. The problem is, it can be time-consuming sifting through gazillions of data in the search for accurate, and some trusted sources of information might be a paid-for solution.
CI and market intelligence consultants most times get their data from online sources. Other times as the case demands CI consultants gather intel from events and by talking to relevant people in the field – all of which are perfectly legal based on the law.
What type of business use competitive intelligence and market research?
CI reports and market research are more popular and in high demand in the pharmaceutical and tech industries. That is not to say other sectors aren’t using them. However, the massive range of products on the market and the increasing competition brought about by the internet have made it vital for all businesses to seek more knowledge to increase their competitive advantage.
- Pharmaceuticals and biotechnology
- Financial services
- Consumer goods
- Medical devices
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