The Paradox of Competitive Research

After 15 years within the competitive research industry, referred to as “Competitive Intelligence” or “CI”, I have seen many trends come and go. However, the single most significant trend that persists is the growth in the amount of competitive research and subsequent information. With the advent of the Internet, with the growing use of new technology to capture competitive information, companies have more information at their finger tips about their competitors than any other time in the world. However, this growth in the amount competitive information is actually resulting in less being done to make decisions regarding how to sell or market against competitors. The growth in the amount of competitive intelligence is actually creating paralysis, and in many cases, results in nothing being done with the collected intelligence.

Why is this happening? There isn’t a single answer to the question but I have noticed a few reasons for an increase in paralysis, or at least a stasis in reacting to competitive intelligence.

First, I have noticed that many internal company competitive intelligence managers have adopted an attitude of “all questions get answered”. That is, in an attempt to be “customer centric” and increase internal client satisfaction, managers responsible for collecting, analyzing, and presenting CI are actually accepting a majority of requests for CI without any question of how the resulting information will impact the organization. The result is an overwhelming workload for the CI staff, resulting in analysts becoming more of a project manager rather than an internal strategy consultant. In this regard, much of the information delivered has limited actionable result. In addition, the originating request for information might actually have limited impact to the organization, such as helping the Company to increase market size, win competitive deals, or get ahead of the competition in product or service development. Managers aren’t questioning information requests and specific questions and how it will impact the bottom line.

 Secondly, I have noticed that many CI requests are emerging as a “CYA” tool from the requestor. That is, there are a growing number of requests that not only have no or limited impact to the Company, but are being originated to rationalize a budget request, a new departmental policy or procedure, or to justify an individual’s action. Case in point. A fortune 50 company recently approached me to take on a “competitive benchmarking study” to understand the budgets of their competitors’ customer service departments. The reason? The client said that their own customer service budget was going to get cut, including a reduction in headcount, and he wanted to try and show leadership that the competition had larger, growing service budgets and that their own budget reduction would result in negative customer service ratings compared to their rivals. The problem is that there is no direct link to budget and customer satisfaction. Many customer service departments have very positive customer ratings because of how they train and incentivize their service agents and has very little to do with overhead budgets.

Finally, the increase in ability to collect and analyze competitive information is resulting in information overload and actually causing an “information blackout”. Internal competitive information stakeholders are receiving too much information with little actionable impact and they simply don’t know what to do with it. In this regard, the amount of competitive information is actually hurting the organization from moving forward and making a decision in a timely manner.

Sometimes a “Low information diet” is the most successful recipe for making good decisions and creating action within an organization. The number of competitive benchmark exercises that have been undertaken in the past 2 years is amazing. However, a majority of the information collected is not very useful to a company because competitors’ processes, procedures, and strategies can be vastly different. Many times it is literally like comparing “apples to oranges”.

Here is a question? “Why benchmark when you can lead?” Rather than spending the time and money on competitor benchmarking, companies should consider taking those resources and investing into research on what customers want, need, and are missing. That is, focus on your own customer segment and target audience, learning what they want and need rather than what your competitors “think” customers need or want.

Finally, CI and market research managers need more rigorous processes for vetting requests for competitive intelligence. Managers need to ensure that internal customers consider the necessity of the requested information and how it will be used and made actionable. Through more rigorous scoping of the information request, managers help their internal customers better use the information, making an organizational impact while at the same time weeding out non-essential requests for information. This will allow CI and research managers to have more time to be “consultants”, helping internal customers to use the information, rather than spending their time managing research projects and being glorified project managers.