The Value of Competitive Intelligence in an Economic Downturn
One of the frustrating things end-users of Competitive Intelligence have to deal with is that they often get information that they know already, either instinctively or through experience. The CI department may be very good, providing the information sought by senior management regarding competitor pricing and discount strategies, hiring strategies, product development and distribution strategies, etc. Yet the feeling persists that something more can and should be done with the information they’re getting, especially during the current economic downturn.
This issue is one that has bedevilled many CI professionals for decades: They deliver the information that senior management has asked for and yet there is a great deal of dissatisfaction with the impact of the CI provided and the perceived value of CI is diminished.
I suggest that the fault lies with both CI professionals and the end users. CI professionals should make a greater effort at analyzing data with the goal of providing innovative ideas for senior managers and other relevant end users. The end users on the other hand, should be open to, and encourage the application of, analysis and ideas that may very well change the structure of the company, the products and services it provides, and the markets its serves.
Here are two examples:
A. Price Wars
If your company is engaged in price wars involving a great deal of discounts, then you may be trapped in a race to the bottom. In price wars, there will always be someone who sells lower than you. If customers are perpetually offered discounts, then the discount price becomes the list price.
In this case, the best strategy might be to target the high-end, high value segment of the market, and leave the competition to fight over the scraps of the low-end, low-value segment. Another possibility might be developing unique products and services demanded by the market which your competitors can not and will not provide, thus creating new markets and new demands.
This may require developing overseas markets and strategic partnerships. CI professionals should think in these terms without fear and end users should be more accepting of innovative thinking.
B. Improving Ease of Use
If you have a number of highly-valued clients providing the majority of your sales, it makes no sense to annoy them by charging them for minor products and services which do not add much to your bottom line or customer satisfaction. It is better to take the high road and provide those services free of charge. Why should you lose major clients because you annoy them by charging for trivial services?
Clients, whether consumers or commercial enterprises, should find it easy to do business with you. If pricing or organizational changes are required to make your company easier to work with, then that is what the CI professional should advocate and end users should be open to accept.
CONCLUSION
Senior managers, as end users, should encourage “outside the box” analyses from their CI professionals in order to get full value from their CI departments. Competitive Intelligence is most useful when it is seen as a proactive force within a company in partnership with key decision-makers.
Competitive Intelligence can be a source of idea generation for product innovation, not just for dry analysis of current market conditions