03/ 28/ 2002
by Rebecca Flynn
Perhaps Sun Tzu said it best in The Art of War when he instructed warriors to "know thy enemy like thyself." Though written in 500 B.C., this advice is just as true in today's business world, where knowing what your competitors are up to can mean the difference between being a step ahead or a step behind.
Competitive intelligence—gathering information about competing products and services—has long been commonplace at large companies, but it can work for small business too. In fact, whether they know it or not, most entrepreneurs already practice it.
"Almost every small business owner snoops on their competition," says Diane Giese of Kirkland, Wash.-based Strategy Software (http://www.strategy-software.com), a developer of competitive intelligence software. "Whether it's sampling the menu at a competing pizza parlor or visiting another company's Web site, it makes sense to find out what your competitor is offering the marketplace and how it's different."
Giese hastens to point out that competitive intelligence is not corporate espionage, which is the use of illegal means to gather information. The fact is, as much as 95 percent of the information you need about your competitors can be easily obtained through published information sources, interviews and other legal and ethical means. Low-cost or free ways to gather information include:
- View competitors' products and services through the eyes of the customer. This can be as simple as returning a purchase to test their customer service.
- Check out your competitors' Web sites for details on their sales strategies.
- Read trade publications, association newsletters and general business press.
- Ask employees and vendors about your competition regularly—they're in a position to hear things you don't.
While collecting competitor's information is essential, it's often what small business owners do with it that can make the difference. "Collecting, organizing and continually updating competitor information can help you develop a point-by-point comparison of your product and your competitors," says Giese, whose company works with small and large businesses to develop competitor information databases and reports. "And this often helps identify important trends and patterns that can dramatically increase your sales over time."
Protecting Yourself
Where there is intelligence, there is counterintelligence. So if you are watching your competitors, they're probably watching you too. Here's how to protect yourself:
- Keep tabs on your mailing lists. Often competing companies or individuals will call or e-mail a request to be added to the list to receive promotional mailings.
- Check that your Web site and promotional materials don't reveal your corporate strategy to competitors.
- Talk with your employees about what kind of information is appropriate to give out over the phone or in person. Often competitors rely on unsuspecting employees for information. Also be sure to warn employees about discussing important business matters in public places—especially industry events and trade shows that are also attended by your competitors.
For more information on competitive intelligence:
Society of Competitive Intelligence Professionals -- http://www.scip.org
Fuld & Co. is a Cambridge, Mass.-based competitive intelligence company with a Web site, http://www.fuld.com, that offers suggestions and guidance on conducting competitive intelligence.
Hands off the Hold Button
Source: Telemarketing Magazine
When put on hold:
60 percent of business callers hang up
30 percent never call back
This article originally appeared in the May/June 2001 issue of MyBusiness Magazine, NFIB's member magazine.
