3.1.5 Keeping Tabs On The Competition - Setting Up A Market Intelligence System
Field Marshal Bernard Montgomery used to keep a photo of German General Irwin Rommel in his field headquarters during the North African campaign in World War 2. He believed that having the photograph would enable him to appreciate the character of his adversary and help him anticipate his next move. As history subsequently revealed, Montgomery’s ability to divine Rommel’s intentions owed a lot more to the code breakers at Bletchley Park than it did to Montgomery’s intuition.
I have always maintained that if you look after your customers, the competition will look after itself but there is no question that a really comprehensive knowledge of one’s competitors - their products, their people, their expertise, their strengths and weaknesses - is invaluable in determining their future intentions.
I am constantly surprised by many of my clients’ lack of competitive knowledge.
Well that’s not quite accurate - the knowledge is there but it resides in different people’s heads and little attempt is made to consolidate it. And it’s only by systematically centralising the information that one can interpret what it all means - and just as importantly - determine what you don’t know but need to know.
I once worked for a company that prided itself on the depth and breadth of information held on its competitors. It sounds archaic now but everyone in the company had access to a pad of Market Intelligence Reports. These had several carbon copies but one was always sent to a particular staff member at our Head Office where it would be filed by company and subject matter.
There was a certain kudos to be earned by submitting a particularly juicy titbit of competitive information and so everyone went about its collection with great gusto. I can recall finding myself sitting next to one of our competitors on a flight to Central Queensland to open negotiations on a new supply contract. The guy next to me was reading through his company’s proposal to the same prospective customer. I couldn’t straighten my eyes up for days afterwards.
Two of our managers had private pilots’ licences and would occasionally fly a recce over our competitors’ plants. If you knew what was there a year ago, you could compare it with what was there now. To the uninformed, it might be just another storage tank but to the initiated, it might be the first sign that a product known to be under development was going into production.
Perhaps the most dedicated example of intelligence collection was by a young engineer who had lost a leg in a motor bike accident. He took off his artificial one to make room for a sample of a competitor’s emulsion explosive that had been left behind near the collar of a blast hole!
The most sought after information was that relating to products and pricing. In regard to the latter, we didn’t just want the price, ideally we needed information on who the customer was, how recently the price was quoted and what volume was involved. Put all this information together and it might point to a competitive push into a market segment that the competitor had previously ignored.
What we also found was that if a gap in our knowledge existed, we only had to alert our intelligence gatherers to the fact and nine times out of ten, it would not be long before that particular gap was closed.
Once a quarter, a competitive digest was produced, which could then be used by our commercial and technical staff for a variety of purposes.
In a previous article headed - “Identify the cause, don’t treat the symptoms” I discuss draining the swamps in your business. Here’s another swamp that you can add to the list - setting up a Market Intelligence System.
When setting up a Market Intelligence System:
- Tell all the potential intelligence collectors about the program, its purpose, its scope and the process for reporting, collating, analysing and disseminating the information
- Get the program off the ground and maintain enthusiasm by rewarding collectors for particular gems of intelligence
- Get as many of your staff involved as possible - don’t ignore delivery drivers - for example - ask them to note competitors’ products when unloading at customers’ premises
- Set monthly or quarterly intelligence objectives - example - we need to focus on Company X as their pricing has become really aggressive
- Most importantly, have lots of collectors but only one analyser. In intelligence, one seasoned human brain is the most effective means of putting together the pieces of the intelligence jigsaw
- Encourage staff to both use the System and to put forward specific requests for information
Achieving and maintaining organisational alignment is the foundation of effective strategy implementation. A vibrant MIS can contribute to its achievement.