Is Your Competitive Analysis on Life Support?
Contributed by Marianne SlightHow does your organization manage competitive intelligence? Who gathers it and from where? How is it disseminated and to whom? Where’s your own no-go line and is it the same as your employer's?Our organizations are usually deliberate about collecting and sharing CI, but many of us don't have an overall program structure that frames the goals, ownership, funding, and ethics. So CI looks like a heart rate strip – intermittent bursts of activity around a trade show, a launch, a business case, and of course the annual sales meeting – but very little the rest of the year.Set out the goals of what you want to achieve with CI in your organization: who are the stakeholders, what is the budget, and what is the ethical framework. Set up a process for collecting data and converting it into information, including how and to whom it will be disseminated. Here are two things to consider to get you started.1. Take a Value-Based Approach for CIAs product managers and marketers, we’re used to analyzing value: what is the cost of the customer’s problem, what are the benefits of our solution, and what proportion of that value can we charge the customer.We quantify the cost of the problem: how much of a burden it is to the customer in terms of money or resources or time, and what does that look like in monetary terms. Then we look at the benefit our solution provides when solving that problem – essentially, how much is that burden reduced? – and convert that into monetary terms too. And then we determine how to split it up: how much of that benefit we want to keep for our organization, and how much will accrue to the customer. And that, of course, more or less determines our price.Value to customer = Benefits to customer – Cost of benefits acquisition to customerTaking that approach to Competitive Intelligence, courtesy of Neil Baron from Baron Strategic Partners, gives us a way to look at the relative value of our solution compared to the competition.
Using simple math (no regrouping required!):
Value of our solution = Benefits of our solution – Cost of our solution
Value of our competitor’s solution = Benefits of our competitor’s solution – Cost of our competitor’s solution
Incremental value delivered by our solution = Benefits differential – Cost differential
This allows us to be very specific in knowing our solution’s place in the market relative to the competition. It also helps to combat the common sales complaint of “our price is too high.” And of course, now we can be very targeted in our messaging as we get further down the sales process with a prospect. A side benefit is that this specific, quantitative deliverable provided to the sales team can help to justify a CI team’s existence.2. Where’s Your Line?
Breaking and entering? What!? Putting out a fake RFP to see what you can solicit? You’ve got to be kidding. Interviewing someone from a competitor for a fake job? Ugh! Interviewing someone from a competitor for a real job that they aren’t going to get? Hmm. Taking collateral at a trade show? Sure! Searching online for information and user guides that their customers have posted? Probably. Pretending to be an independent consultant at a trade show? Probably not. Using something on the web that you know really shouldn’t have been posted publicly like a price list? Gray?Everybody has their own line. Be sure of where yours is. It may well be different from your colleague, your competitor, someone in your team, or even your manager. Know where the the line is that you, personally, won't cross.
Marianne Slight is Sr Director of Product Management at Nuance Communications, Inc, responsible for natural language processing solutions that improve clinical documentation in healthcare. Prior to joining Nuance in 2013, she held senior product management positions at Press Ganey, Optum, Picis, and Oracle, focusing on healthcare technology and analytics. Photos courtesy of Dwayne Schoon and Juan Ramon Martos on Flickr Commons.