One of the most successful businessmen in American history had a simple approach to staying ahead of the competition. He studied them.
Sam Walton, the founder of Wal-Mart , often visited other discount stores to learn what they were doing well and to learn where they were making mistakes. He used the information to help improve his own “five-and-dime” store. Early in his career, Walton instinctively knew he needed a competitive market intelligence program.
From the five-and-dime to the point-and-click, today’s e-commerce market also demands that you develop this important knowledge base by knowing your competitors’ IT strategies.
You can expand on Sam Walton’s approach of gathering firsthand information. Here are a few suggestions.
Conduct customer surveys
One of the most direct ways to research your role in your industry is to ask your customers how they view your company and your competitors. Such surveys may also provide information about future customer needs.
To make the most of your investment, you should consider hiring an independent firm to conduct this research. According to The Accounting Guild, surveys by independent firms are more accurate than research done in-house by the company.
Evaluate contract negotiations
After every new business sales proposal, the IT professional and marketing counterpart should evaluate why the company won the contract or why the company lost it. Try to discover the reasons why the competition signed the deal.
Solicit feedback from the sales force
Enterprises commonly make the mistake of formulating competitive strategy from the top of the organizational chart without obtaining market information from the bottom. Establish a policy that requires the sales team to document both positive and negative customer feedback. Salespeople will have more motivation to participate if their input results in improvements. Methods to keep feedback timely may include:
- Developing a customer feedback form that sales staff must complete weekly
- Hiring a contact manager to track feedback
- Establishing a database of customer suggestions
Track supplier feedback
Companies that supply goods and services to your company are probably suppliers to your competitors as well. Suppliers are often excellent sources of information about new materials or new processes. Some suppliers have policies against sharing information, but others don’t. They may clue you in on your competitors’ plans.
Attend trade shows
Get a sneak peak at the newest products and materials in your industry. To make the most of the trade show experience, go a step further than just attending these industry show-and-tells. Consider becoming an exhibitor. When you exhibit your own products, you'll receive immediate feedback from future customers.
The Web as a weapon
The Internet can provide a wealth of information about your competitors. If you don’t have time to conduct this research, assign the task to a marketing staff member.
You’ll need the data in a timely, uniform manner. For example, ask for a monthly report that covers information about your top ten competitors and your top ten customers. Excellent online sources include:
- SEC filings. Nearly 75 percent of publicly traded U.S. companies make most of their SEC filings electronically. You can view them online on the EDGAR Database.
- Competitors Web sites. Bookmark these, and visit them often. Companies often provide online annual reports, press releases, and product descriptions.
- Industry reports/trade journals. Develop a list of online industry reports. Also, many consulting firms maintain Web sites with extensive data about the industries they serve. For instance, the accounting giant, Arthur Andersen , provides online information about the utility industry and e-commerce.
Acting on intelligence
Obviously, management shouldn’t act on everything from competitive market intelligence research. The accuracy of some information should be questioned extensively. To help analyze the data, schedule a monthly meeting with management, IT, marketing, sales, and customer service. These regular meetings will emphasize that evaluating the competition doesn’t end with one report. It’s an ongoing project that’s vital in helping you make intelligent business decisions.
Since 1984, Jack Fox has been assisting thousands of accountants and consultants in starting and building their own successful businesses. He is the author of five books, including the third edition of Starting and Building Your Own Accounting Business.What’s your favorite technique to keep track of your business rivals? Post a comment below to share your spying secrets. If you have a story idea you’d like to share, please drop us a note .