Game theory and the prisoner’s dilemma 🎲
If you’re not familiar with the prisoner’s dilemma, it’s a classic game theory problem you can read about here.
The problem’s interesting as it raises questions about trust, risk, and the optimal choice you should make if you want to ‘win’.
This applies to anything competitive where an unscrupulous action offers a moderate edge over the competition—for example, paying for followers on social media, or taking performance-enhancing drugs in sports.
Since you can always trust the unscrupulous few to cheat, well-meaning individuals are forced to follow suit to remain competitive. That’s what the prisoner’s dilemma proposes.
So how does this relate to the ethics of competitive intelligence? 🧐
Ethical competitive intelligence
The prisoner’s dilemma suggests that the world rewards dishonesty in any competitive endeavor as it re-levels the playing field. This stops people from adhering to ethical standards.
But is this true for competitive intelligence?
Because unscrupulous behavior in this instance is considered corporate espionage. And corporate espionage is illegal. 😱
It’s not quite that simple.
If you’re gaining information by legal means, you’re not breaking the law. But there are some guidelines you can follow to establish a fair competitive advantage without losing sleep at night:
One: use publicly available information when you gather competitive intelligence.
Two: Follow business ethics best practices as you develop your CI strategy.
How to gather competitive intelligence ethically
So what would gathering competitive intelligence ethically look like? 🤔
Use information that’s publicly available
Putting internal sources of competitive intelligence aside for a second, let’s look at some of the external sources of CI that are fair game.
Short on time? Here’s a quick list for you (detail below):
- Customer case studies.
- Review sites.
- Social media and social listening platforms.
- Financial information.
- Producing pricing information.
- Trade shows and industry events.
- Press releases, white papers, and other official documents.
- Competitor SEO analysis and content strategy.
- Organic & PPC data analytics.
We’ll start with anything publicly available, even if you have to work harder for it. Competitor financial information, for example, is a little tricky to get your hands on, but it’s possible … if you know where to look.
But not everything’s so hard to find.
Believe it or not, there’s proprietary information that your competitors want people to see. Crazy right? Well, no.
Customer case studies, press releases, white papers. All of these are public documents your competitors publish for all to see. And that includes you if you search for them. Collect enough of these and you’ll start to see patterns over time, giving you insight into competitors’ marketing plans.
There are also social media and social listening platforms. Social listening tools are like Google Alerts with superpowers. With more customization options, sorting and filtering, search functions, and other all-around upgrades, they’ll find mentions of your competitors across the web and log them for you to catch up on whenever’s convenient.
Review sites, either from customers or employees, are terrific too. G2 is a great resource for B2B reviews, while an old faithful like Trustpilot is great for B2C. Glassdoor tells you what it’s like to work in the company, while information on hiring from any source could give you a heads up that your competitor is making a play for a new sector by growing a particular team.
Finally, your SEO tools like Semrush or Ahrefs will come in super handy. You can use them to investigate a competitor’s keyword and content strategies. By tracking these over time, you’ll see their new and improving keyword rankings, which could alert you to a change in their SEO strategy or positioning.
There are all sorts of internal sources of competitive intelligence too.
Your sales and customer success teams are a great place to start. They’re asking customers multiple times a day what they’re looking for and which of their needs are already being met by competitors. And if you’re not already, you can conduct win/loss interviews with customers to determine what made them choose you over a competitor (or not).
For more on internal sources of competitive intelligence, read our article on building a competitive intelligence program. 👇
Be open at all times about who you are
If you’re signing up for a free trial of your competitor’s product, or if you’re attending a training webinar for their customers, don’t try to hide the fact that you’re a competitor. Avoid even using a personal email address when signing up. Use your business email instead.
While you’re not breaking any laws it pays to play fair. Good karma, and all that.
But here’s a question for you:
Why are you signing up for a free trial of your competitor’s product?
We know, it seems like a great idea. You’ll get hands-on, no-limit access to their product. And, if you lie about who you are, they won’t even know it was you! How could they possibly contend with your cunning! 😏
Here’s the issue: you’re not the customer.
You’re not an impartial party. And you can’t assume that your reactions to particular features or inconveniences will be the same as those of your customers, for whom the tool might make up just a part of their tech stack or workflow.
You’re working on a competing product all day, every day. Your customer is not. No matter how much you try to put yourself in their shoes, you’ll struggle to appreciate what features might be exciting for them. And something you think of as a misstep by your competitor might not bother your customer.
Here’s a better way to use free trials:
If you’re hearing in your win/loss interviews about some great new competitor feature, use the trial to see it firsthand and take (objective) notes on how your competitor has implemented it.
Industrial espionage (how not to cross the line)
Let’s return to the prisoner’s dilemma from our introduction, and consider the strength of the competitive edge you could establish through unethical practices.
What confidential information could you uncover that you wouldn’t be able to gain through legitimate means while adhering to a code of ethics?
Wiretapping a competitor’s phone lines, for example, might yield private conversations between staff members, or indicators of future plans.
But what’s the point?
With a bit of work and much less strain on your conscience, you can legally and ethically track competitor behavior over time, and identify changes that offer clues as to future marketing plans. (Competitive SEO research and social listening tools might form a part of this process.)
And once you have this intelligence gathering infrastructure in place, you’ll find it easier to cross-reference other indicators as confirmation of competitor plans. Whereas, if you’re only gathering information by illegitimate means, you may struggle to validate it, or corroborate it with other sources.
In conclusion, it’s more than possible to achieve a sustainable competitive advantage without trying to expose trade secrets or steal intellectual property.
There are more than enough legitimate sources of competitive intelligence offering valuable information to inform your product roadmaps and marketing strategies. There’s no reason to devolve market research into corporate spying.
Where to go from here
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