Inside Scoop on Competitive Intelligence

Question: As my business expands, the competition gets tougher. When we were in just one market, knowing the players and their capabilities or weaknesses was easy. Now we often lose business and make mistakes because we lack good decision-making information. How can we get better informed about the competition?

 
Answer: As a small business grows larger, the need for solid information on markets and competitors becomes more acute. This is the often-misunderstood realm of  "competitive intelligence" or CI.

If you don't fully understand what's happening in your competitive marketplace, it's difficult to make good strategic decisions for your business. Or, if you are simply getting your butt kicked by the competition, it may be time to find out why and what you can do about it.

Competitive intelligence does not involve spying or crystal balls. And it is much more than a simple Internet search, rumor chasing or reading business publications. According to Leonard Fuld, a CI pioneer and president of Fuld & Company, it is "information that has been analyzed to the point where you can make a decision."

Competitive intelligence can be tremendously useful, but it is still only a reasonable assessment of what's happening, and not gospel. Here are some things you should know about what CI is and can do:

It can be a useful tool to provide you an early warning of both threats and opportunities - and hence a way to improve your bottom line. It's a way for you to gain a broader perspective.

Competitive intelligence means different things to different parts of your business. A product development person sees it as a heads-up on a competitor's new R&D, while a salesperson considers it insight on how you should bid on a new project. As business owner, you might consider it a long-term view of your marketplace and rivals.

CI happens quickly, via personal meetings, phone calls and other interaction. Written papers, reports and excess analysis can kill timeliness and render it useless.

It is a way of life for up-and-coming companies. Many successful entrepreneurs see it as an ongoing process of gathering and distributing critical information to anyone in the business who needs it. 

It has both short- and long-term uses. According to Fuld, you can use CI for immediate decisions such as how to price a product or place an ad. Or you can use the same information to help with long-term market positioning.

These resources can help you build a competitive intelligence component into your business:

Fuld & Company is a major consulting firm that caters mainly to big companies. Still, the Intelligence Index & CI Tools section of the firm's Web site is valuable for entrepreneurs seeking insight into what competitive intelligence is all about.  You'll find free reports, white papers and CI terms. Visit www.fuld.com.

Business.com (www.business.com) is great for business research. It's a free, business-specific search engine designed to help you find the companies, products, services and marketing info you need for smart decisions.

Hoover's Inc. (www.hoovers.com) offers a wide range of detailed information on companies.  Some is free; most you pay for.

KnowX.com offers access to public records information - a good place to find info on businesses, people and assets, and to dig up the critical relationships between them. You can run background checks, verify property values and more using public records and other data resources. Pay as you go or get a subscription.

D&B offers excellent business intelligence services through D&B Small Business Solutions. You can find info on new customers, old customers, your competition and new markets. Visit sbs.dnb.com. The best info isn't cheap, but it's worth the cost.

The Society of Competitive Intelligence Professionals (www.scip.org) is a non-profit membership group for people who create and manage business knowledge. The Resources section of the Web site can help you locate CI product and service vendors.

The Association of Independent Information Professionals (www.aiip.org) offers referrals to members who can help you with an information-gathering project. The referral is free and you would negotiate rates with the service provider. Click on AIIP Referral Program at the Web site.