With the economy continuing in a state of uncertainty, CEOs of mid-market companies are assessing options for growth in 2024. One thing is clear: Doing more of the same activities will not help businesses break through growth inertia. From mergers and acquisitions to R&D and capital investments, how does an organization decide the direction that will deliver success?

Financial analyses are the starting points, but if you haven’t completed a comprehensive competitive review, those analyses may deliver less impact. A thorough competitive analysis allows a company to assess, understand, and prioritize resources and investments to achieve optimal growth in the near term and the future.

What Do We Mean by “Competitive Insights?”

Competitive insights are clues uncovered by looking across multiple data points to unlock meaningful differentiation for your business within a market. The art of gathering competitive intelligence involves collecting and analyzing actionable information about your competitive set, laying the foundation for a solid business strategy. These insights inform decisions around current and future actions, and impact finance, operations, IT, human resources, R&D, sales and marketing.

In the near term, competitive insights will both confirm your planned course of action and illuminate areas that are unfavorable to your bottom line, optimizing your strategy for success. In the long term, competitive insights help chart a course for sustainable growth, outlining areas for investment that may take the shape of new product or service innovation, new market or geographic expansion, customer service enhancement, sales diversification and outreach, or other areas.

What Are the Competitive Areas to Assess?

1. Begin in your own backyard. Be brutally honest when you assess the strengths and weaknesses of your products and services. Now is not the time to be defensive; that will only hurt your business in the long run. What do you do better in the marketplace than your competitors? How do you know this? Start with input from your sales team who are on the front lines with your customers every day. But don’t neglect gaining feedback from customer service, marketing, and operations (manufacturing, distribution, etc.) The data points these non-sales teams provide may include challenges or hidden gems for you to fix or implement.

Conduct comprehensive category line reviews to dive deeply into what’s really performing in your portfolio – looking beyond sales volume to true ROI – and learn what might need a refresh or an exit from the line. Companies often keep underperforming product lines to serve a single customer. If the margins justify it, great. If not, then it may be time to migrate that customer to a new line.

2. Talk to your customers. Again, don’t solely rely on your sales team for feedback. The executive team should pick up the phones and personally call some of your best customers. Why do they buy from you? What aren’t they buying from you that they are finding elsewhere? Why? What do you do well and where can you improve? Where do they anticipate their needs migrating in the future? Also, reach out to lost customers to learn why they chose another company to do business with. Put on your Kevlar vest, suspend judgement, and just listen. Never argue, just thank them for their time and feedback.

You may opt to enlist the help of a professional firm to assist you in these efforts, structuring the conversations to stay objective and neutral. Consistency in approach is critical to obtaining meaningful information you can apply to your business. For organizations with thousands of customers, a professional can assist with outreach, research and analysis on a timely basis. It’s budget well invested in this critical step.

3. Now that you’ve gathered customer data, build a customer profile to identify your ideal customers. As you learn who is buying from you today and why, a persona emerges characterized by similar traits and coalescing into a “current customer” profile. Elements of this profile include quantifiable demographics such as: age, gender, industry type, annual spend, products purchased, frequency of purchases, geographic location – and, for consumer products, where they purchase your brands. These points vary slightly for B2B and B2C industries but are equally important to both. Don’t ignore the softer qualitative data of psychographics. Data points such as why customers buy your product vs. alternatives, outside interests they share, hobbies, motivations, and preferences have long been part of B2C customer research and have gained traction in B2B research. Are your best customers a mix of genders, do they cluster around the same age and geography while sharing a deep sense of investment in the environment? Psychographic insights improve your company’s ability to target them with meaningful messages that resonate. Profiles allow your marketing team to reach new customers much more efficiently and effectively. Taken together, Demographics and psychographics inform your business strategy and take you to the next level of communication.

4. Who are your competitors? Make a list and then assess it to determine who you may have omitted. Some of those omitted competitors will come to light in the customer research from point #2 above. Businesses frequently make the mistake of simply studying the same competitive set they’ve had for years, not considering how customers’ needs and/or tastes have changed over time. When you chart your competitors, think of alternatives or substitutes that may be non-traditional to the products and services you offer.

A great example from the recent pandemic is the emergence of delivery services and online shopping versus traditional retail as the dominant, and often preferred, competitors to traditional brick and mortar. While eCommerce had already been growing steadily year over year, the pandemic forced certain retailers (especially restaurants) to branch out and offer new channels to serve customers. Many fine dining establishments at first only thought they competed against other fine dining venues. But they soon realized they were losing out to fast food, quick service restaurants, and more competitive fine dining spots during the pandemic. Over time, and as a means of survival, many rebounded by offering delivery or pick up service. Some even built functional websites for the first time. It is a startling and costly lesson. Future-proofing your business strategy includes accounting for alternates to your products and services, now and in the future, and planning how to leapfrog your competition.

Charting your competition requires a few minimum data points. Beyond a list of products and/or services and their prices, margins and volumes, you need to also assess their pricing strategies, track records around innovation, mergers, acquisitions, and R&D investments. How many salespeople do they have in house and in the field. What is their customer service execution like? What does their customer profile appear to be and how does yours overlap? What are their distribution channels, how do they go to market? From a sales and marketing standpoint, what is their value proposition and how consistently is it communicated across all customer touchpoints? What marketing channels are they using and are they dominant in any one channel?

Include your own company in this exercise to see how you stack up or fall short with your competitive set. Look for opportunities to truly differentiate your company, brand, or product. If you can’t find it clearly, it’s time to roll up your sleeves and get to work. Most companies can’t invest in everything they identify as an opportunity for improvement due to cost, timing, lack of internal resources, skill sets, etc. Develop budget criteria with clear ROI and time frames to aid in prioritization. Then, you’ll have initiatives to work on in the current year and can build others into subsequent years.

5. Technology can assist with competitive insights. There are many tech tools that will aid in your competitive tracking. However, insights require human analysis alongside machine learning to truly produce breakthrough results. Based on your industry and business type, you can begin with a manual or bare bones approach and add additional services at later dates.

Here are a few types of technology tools to assist your competitive intelligence gathering:

• Website and digital marketing analytics tools - Google Analytics, SEM Rush, SpyFu to quickly track and measure your digital performance vs. competition
• Information consolidators – Zoominfo, Apollo and Sales Intel offer lead gen tools along with insights into competitors
• AI tools – Klue, AlphaSense, Crayon – these tools synthesize competitive data to optimize your lead generation activities and overlap with the information consolidators

It may make sense to enlist the help of an agency with access to multiple intelligence tools that can be tailored to meet your business needs.

6. How often should businesses conduct a competitive review? The answer used to be once a year. The current answer is, depending upon your industry’s rate of change, as frequently as you need to. When getting started, a good rule of thumb is to engage in a competitive deep dive once a year, revisiting that data at the six month mark and documenting any large changes. With the advent of AI-infused intelligence gathering tools, keeping up with your competitive set will continue to not only get easier, it will be a requirement for future success.

7. Who should lead your competitive review? If you have experienced personnel who have conducted comprehensive cross-functional reviews, enlist their help. Representatives from each of your internal functions/divisions should be part of the team. Sometimes companies can gather data easily but lack the expertise to extract meaningful insights to apply to the business strategy. Others have challenges gaining consensus around the data and how to execute.

Considering Outside Expertise

Competitive insights are a critical aspect of building a business strategy. The process can be detailed and time consuming, which may be a challenge for many mid-sized companies where leadership is time-starved or skill sets aren’t present. If you don’t have the right internal experience with competitive insights, or need the leadership capability to shape and execute the review process and outcomes, supplementing your team with an experienced, objective expert from Chief Outsiders can accelerate the process to impact your business growth. Our CXOs know how to gather, analyze and extract insights from multiple data points, and we will work with your team to educate and gain alignment on how to prioritize, integrating these insights into your business strategy.

Want to learn more? Reach out to schedule a quick call atoth@chiefoutsiders.com to discuss how we can help.