No product exists in a vacuum.
Alternative products and solutions exist, and they’re just waiting to fulfill your customers’ needs better than you can. So your products must outperform your competitors’ products if you want to win more customers.
To many businesses, this means simply making the “best” product they can. But what is “best”?
To create the best marketing and positioning strategies possible, you have to know where your product stands in the competitive environment. Not just in relation to the customer and their needs.
That’s just one of the reasons you need CI, but tactical intelligence is important for many more reasons besides this. Here are our top eight:
- Learn what your customers want
- Learn your competitors' strengths and weaknesses
- Understand buyer motivations
- Uncover market trends
- Anticipate threats
- Build a sustained competitive advantage
- Prioritize business decisions
- Strengthen your strategies
1 - You learn what your customers want
At the heart of any competitive intelligence program, you’ll find a motivation to understand the customer. You have to understand what the market wants before you can provide it.
But speaking to prospective customers only gets you so far. Especially if you’re a step behind and losing customers to competitors.
Competitive analysis is about learning why customers go elsewhere and finding out why you lose.
Market research that helps you better understand your competitors, what they offer, and what customers like about what they offer, puts you in a better position to win competitive deals.
Some of what you find might surprise you, too. It’s not uncommon to hear your customers claim you don’t offer a feature that has actually been a part of your offering for some time.
Not communicating to your customers that your product meets their needs is the same as not meeting those needs at all.
2 - It teaches you your competitors’ strengths and weaknesses
No one can be good at everything.
Even if you’re up against established giants with huge budgets, there are ways to play your position as the small upstart to your advantage. After all, who doesn’t love an underdog?
Without intel on your competitors, though, you’ll never uncover their strengths and weaknesses. Knowing where your competitors are weak gives you a chance to position yourself as the answer to their shortcomings. Knowing where they’re strong shows you ahead of time which fights you can’t win, where it’s sensible to conserve your energy, and where it’s worth making a stand.
Pretty useful, right?
Put another way, market intelligence gives you a clear view of the competitive landscape. And a clear view of the competitive landscape makes it obvious where your products should sit within it.
That means better positioning, a more persuasive offering for customers, and an increase in revenue.
“...understanding what competitors are helping other customers do can help you figure out whether or not you’re going to play against them in the market.”
Clint Buechler, Associate Manager of Growth Marketing at Rhino.
3 - You’ll gain a deeper understanding of buyer motivations
Numbers don’t lie. And neither do customers…
At least, that’s what we’d like to believe. But some prospects don’t have a deep enough understanding of their own motivations to give you truthful answers. And if the data you get from customer interviews doesn’t reflect reality, it won’t get you results.
That’s where competitive intelligence comes in. Including information on your competitors gives you a more complete picture of your prospects’ motivations. And the more sources of data you have, the less power a few outliers have to skew the entire dataset.
This’ll give you peace of mind next time you’re worrying about the accuracy of the answers from your customer surveys.
CI also offers objectivity.
It helps you offset biases in your organization about your products. Seeing yourself from the market’s perspective lets you objectively identify what needs to change about your brand for you to win more business. Be it your product positioning, your messaging, or your content marketing strategy.
4 - Uncover new market trends and opportunities
The modern marketplace is dynamic, disruptive, and fast-moving. It’s impossible to compete if you’re a step behind. When you’re gathering competitive intelligence day in and day out, though, it’s impossible not to keep up to speed with the latest goings-on.
When you’ve got an active, successful competitive intelligence program, you’re in a great position to spot new industry trends and opportunities as they emerge.
You might notice your target audience migrating to products with a common feature. If your product doesn’t have this feature yet, you can act swiftly to make developing that feature a priority.
5 - CI helps you anticipate your competitors’ next moves
Just as CI helps uncover emerging market trends and opportunities, it also alerts you to emerging threats. Having your finger on the pulse of the market makes it possible to anticipate your competitors’ next moves.
When you’re one step ahead, and you capitalize on your competitor’s weaknesses, you’ll neutralize competitor strategies as fast as they can devise them.
Of course, you can’t predict everything. But this will help you get and stay ahead of the competition when new products and services catch your customers’ eyes.
6 - You can build a sustained competitive advantage
When you have a competitive advantage, you’re well-positioned to win more customers than your competitors. But your edge in any highly competitive endeavor is small. And your competitors will be working around the clock to replicate your advantage and diminish your lead.
So how do you make your advantage sustainable?
It starts with data collection. Collecting information on your competitors helps you establish a baseline of behavior. If they move away from this baseline, you’ll know they’re up to something.
These behavioral shifts can act as early warning signals, alerting you before competitors make a move on your advantage.
But since CI uncovers opportunities too, it can show you where your competitors’ advantages lie.
This can inform strategic decisions around new advantages and possibilities that your competitors haven’t yet exploited, or have left undefended. Make these advantages your own and you’ll acquire more market share and increase your brand’s longevity.
• How to gain a sustained competitive advantage (10 superhero strategies)
7 - CI helps you prioritize, with a huge impact on revenue
There’s an infinite amount of work in all organizations. You’ll never be able to do it all. Such time constraints make prioritization crucial.
CI helps here too. It helps you prioritize and make more informed business decisions.
It teaches you what your customers value most, and helps you filter out the competitive battles you stand no chance of winning. You’re left with (i) the areas you’re already knocking it out of the park, and (ii) the areas where a strategic tweak or two can have landslide consequences for your bottom line. For better or worse.
These areas are like swing states. A few votes in either direction could decide the entire election. That is, the vote the customer casts with their dollars and cents.
In competitive deals, just a few persuasive points in your favor could mean thousands more prospects choosing you over a competitor. Even if it’s a close-run thing, they can only pick one.
So, depending on your average deal size, these are massively leveraged opportunities to impact your organization’s bottom line.
8 - Competitive intel helps you strengthen strategies across the business
A great CI strategy will go on to inform a ton of other strategies across the business.
From your product positioning strategy to your content marketing strategy, even your pricing and brand messaging. You can improve them all when your competitive intelligence program gets underway.
The end result of all this? A stronger product, a better customer experience, more won deals, and increased revenue. All thanks to competitive intelligence.
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This article was inspired by Head-to-Head: The Competitive Intelligence Playbook.
The playbook goes into detail about the benefits of competitive intelligence for businesses, and even walks you through the entire CI process.
So if you’re looking for tips and tricks of the trade, don’t wait. Download your copy now entirely free.