Wednesday, April 10, 2024

Competitive Intelligence Is Not About The Checkmarks

"We need to know what we can do that they can't." If I had a penny for every time a sales rep asked me this question! Indeed, most competitive intelligence work seems to be spent producing a matrix with checkmarks that might look like this:

Oracle loves doing this!

Of course, this kind of comparison is completely useless. It lacks the credibility to be taken seriously by a prospect, it doesn’t have the details to be useful for product decisions, and it doesn’t help sellers win any deals. What does it mean "Limited Solution"? 

Adding rows to the matrix might add granularity but doesn’t alleviate these issues. Just look at this comparison with Box that I found on Dropbox’s website: 

Wow, look, no passwords in Box!

Such a comparison becomes only slightly more credible when conducted by an independent analyst firm, but even then, it lacks the necessary insights. I appreciate that Forrester includes some weighting for each area of functionality in its Wave but scoring 3.00 points for Customers and Accounts doesn’t really tell me much about a Billing product. The Wave may help you get on the shortlist, but it will not win any deals.

So, what should Competitive Intelligence be doing if not comparing features?

The objective of the function is to increase the win rate. That’s it. Increasing the win rate will, at some point, involve enabling the sellers with insights and tools because that’s where the rubber meets the road. However, the Competitive Intelligence (CI) function can influence the go-to-market (GTM) strategy in ways that ensure the sellers work on opportunities they stand a chance of winning.

Rather than thinking of CI output as sales tools, it needs to inform the GTM strategy. That starts with understanding where your competitors are successful. Which market segments do they target, and where are they winning business? The competitor’s website usually mentions several target verticals, but only some of those segments are where they get most of their business, while others are aspirational.

CI needs to find out the competitor’s strongholds – for example, by profiling all their customer references. Yes, this is a lot of work, but it gives you much better insights than the “Industries” tab on the website. Usually, segmentation has more granularity than just industries, which needs to be analyzed. Understanding competitors' segmentation should inform your own segmentation strategy. It may be wise to avoid direct confrontation on your competitor’s home turf, and you may find more success in another segment.

Once you have decided on your target segment, you need to recommend the sales play. Who’s the buyer? Do you start with a single department, or do you go after the entire enterprise through IT? Do you lead with a particular product or capability, or do you lead with a comprehensive solution? Again, knowing how your competitor goes to market can help you make the right decision that will lead to an increased win rate. The CI team needs to find that out and document it - and that is a lot of work as well.

After you determine your target segment and sales play, you need to figure out what’s the best way of finding the targets. CI can yet again contribute by analyzing how the competitors go about it and recommending whether to use the same marketing tactics and communication channels. For example, if you see your competitor doing a lot of work with industry analysts and you don’t talk to any of them, you should probably invest in your own analyst relations function.

Eventually, you need to decide on your messaging. Is it about saving costs, increasing employee productivity, or improving safety? Competitive differentiation is a key element of not just your corporate and product messaging but also your strategy. Understanding your competitor’s messaging - and strategy - can greatly improve the effectiveness of yours.

Ultimately, you do need to train the sellers. But they need to be trained on the target segments, sales plays, strategy, and messaging, which includes your competitive strengths. They may need a tool that helps them learn all of that, including the strengths and weaknesses of your competitors. That tool is not a list of features with green checkmarks in the column under your company's name.

Competitive Intelligence is much more strategic than creating a feature comparison.

No comments:

Post a Comment