This week we’ve covered a number of data-driven ways to both monitor and analyze your competition. It’s important to remember that, in business, you will not be the only one doing the analysis; your competition will be doing the same analysis on you! In fact, some of them may even be subscribers to the Data Driven Daily…
That isn’t actually as scary as it sounds. In a free market, you need to acknowledge that there are parts of your business you cannot hide. If you run your business well and build true competitive advantages (including data!), then you should be able to beat your competition even if they know everything you are doing.
While I recommend focusing on your own business instead of worrying about what the competition might know about you, there are a few best practices to ensure you don’t give away too much information:
- Always disclose whatever is legally required in your financial filings, but avoid sharing any additional financial information with the press or external parties. Once the information is out there you can never stop it from spreading.
- While it’s tempting to brag to your customers about how great your business is doing, remember that they speak to your competitors, even if they are your customer. Anything you tell them can (and probably will) reach your competition, so avoid sharing too much.
- If you test pricing promotions or discounts in specific markets before a wide roll-out, always rotate which markets you test. Using the same market for all your testing will make it easy for competitors to predict your pricing changes and promotions!
Some companies do undertake deliberate misinformation campaigns to try and thwart competitive intelligence, but I find these to be not worth the effort. Instead, just assume any information you expose to someone outside your company is public information, and operate accordingly.
In Review: Competitive intelligence is a critical part of sound business strategy, but gathering and analyzing data about your competition is hard because few competitors share such data willingly. Even so, there are a number of techniques to gather data about how your company compares to the competition in pricing, brand positioning, and other factors. The more you use these tactics, the more likely you’ll be able to beat the competition.
Quote of the Day: “Free competition is worth more to society than it costs.” – Oliver Wendell Holmes, Jr.