If your company is like most, you don’t have the resources to respond to every competitor in the market. Instead, you need to focus on the biggest threats. To prioritize competitors requires competitive intelligence. Unfortunately, collecting direct competitive intelligence in B2B markets is often difficult, expensive, or both.
Some of the options for gathering competitive intelligence include conducting interviews with wins and losses from deals involving the competitor of interest. A brand perception study will provide key strengths and weaknesses about the major players in the market. As effective as these approaches can be, they require meaningful budgets, and are less effective for profiling smaller competitors.
Cost-Effective Competitive Intelligence
Are there options for gathering competitive intelligence with modest investment of resources? Fortunately, the answer is: Yes.
A cost-effective approach is to gather individual pieces of data from a disparate range of publicly available sources, connect the dots, and build an overall profile of the competitor. You can find information about competitors in financial databases, directories, social media, industry associations, competitor websites, job postings, press releases, publicly available contracts, trade journals, analyst reports, and online reviews. Thoughtful analysis of these sources produces competitive insight that, while not perfect, is typically enough to guide decisions about which competitors to pay attention to, and which to ignore.
The types of insights this approach can provide about competitors include, but are not limited to:
- Segments Served
- Price (scope of magnitude)
Drilling into financial databases and social media can provide data on annual revenue and number of employees. The data for publicly traded companies tends to be accurate and consistent. With private companies it’s best to check several sources and triangulate on a scope-of-magnitude size. Competitors themselves, especially small but growing ones, often provide an overview of their size on their website by listing the number of clients, employees, office locations, or growth rate rather than annual revenue.
Several factors telegraph that a competitor is growing or positioning itself for growth. These include an uptick in the number of sales and marketing employees; a higher than industry average ratio of sales and marketing staff to overall employees; and the number of sales positions open. Another indicator is the addition of a senior sales executive, especially if it is a new position for the company. And any time a competitor receives equity funding, it comes along with an expectation of growth.
The simplest way to identify the segments a competitor serves is to see what they list on their website. But the claims of sectors served may not reflect their actual business. By digging deeper, you can separate the segments they do most of their business with from the filler on their industries list. This includes identifying the segments featured in their case studies and white papers, the segments represented in their customer list, and the trade shows and events they attend and sponsor.
How the competitor talks about their solution also reveals much about how they define their competitive differentiation. Do they talk about their leading-edge technology or ease of use? Do they claim their solution is customized for a specific segment or talk about its broad application? Coverage in analyst reports, even if you don’t have access to those reports, indicates a vendor has a level of market credibility. Scanning online reviews can identify strengths and weakness that surface consistently. Even employer review sites can provide insights about potential strengths and weaknesses.
Price (scope of magnitude)
Pricing is the most difficult data point to find — especially if sales are high-dollar, complex, and sales reps can negotiate deals. That said, pricing is sometimes buried in online reviews. If the company has done any work with public entities, there may be publicly available contracts that list the cost of the competitor’s services.
Legwork & Judgment
This competitive intelligence approach requires two elements: legwork and judgment. The data described above is not conveniently located in one place. It takes time and effort to identify sources and parse the content for the individual datum. And once collected, the data doesn’t necessarily simply fall into place. To synthesize the disparate pieces into meaningful competitive intelligence requires critical thinking, judgement, and experience. But if you have the time to devote to these activities, or you have a trusted partner, you can develop competitor profiles with a modest investment of resources.
The value of primary research to inform competitive insights
Cost-effective approaches such as the ones outlined above go a long way toward building competitor insights. Still, some data are only available through primary research with customers/buyers who have direct experience with competitors — for example, interviews with wins and losses from deals involving the competitor of interest, or a brand perception study to provide key strengths and weaknesses about the major players in the market.
Most competitive intelligence programs use a combination of approaches. Desk research lays a strong foundation, and custom primary research fills in critical gaps.