One of the key concepts in my book (you can get the 1st 3 chapters for free here) focuses on what I call the Insight model. The promise of this model is to help you find insights you can act on by combining clickstream data, user experience data and competitive data. I was discussing this the other day with a prospect who got the wrong end of the stick when I mentioned competitive data. He started reeling off information about his top competitors which isn’t really the point.
Competitors are of course a part of the competitive environment but focusing your energy on trying to “pinch their customers” is in my view a complete waste of time. Even comparing your data with them is largely irrelevant. Competitors evolve in different ways to your business so attempting to “defeat” their numbers doesn’t mean anything, even if you do outperform them. Outperforming the competition is of course good especially in terms of market share, but primarily it means you’re doing something right with your customers not that you’re taking away business from your competitors. The only important information you can find out about your competition revolve around opportunities for you to act. If you can’t take an action on information it’s simply nice to know.
Competitive Intelligence starts with your customer
To me, competitive data (the core information that leads to intelligent action) examines the whole marketplace. The whole marketplace is your entire ecosystem and it starts with your customers and prospects. That’s worth repeating, competitive data starts with your customer or prospect. Not your competitor. Your customer is much more important to listen to than your competition. There is perhaps a new buzzword for what I call using competitive intelligence in start ups and it’s called the “lean start-up“. In a nutshell lean simply means speed. Rapidly testing of ideas on the market, learning, listening and reacting to your customers and prospects. This leads to aÂ product or service developmentÂ approach based on market reality not gut feeling.
Reality of the situation
Competitive intelligence is about the reality demonstrated by the marketplace. It starts with what your customers want and what you can find out about their needs – as well as what else they buy and why from your competition.
Then there are numerous other realities to take into account;
- Legal/governmental – in the analytics industry there are upcoming changes to EU legislation for instance
- Global/local economy – this effects us all greatly as seen in the recent recession
- Market culture – doing business in the UK is very different to Finland, but also less obvious things like marketing to a cultural niche
- Distributers & suppliers – how are they helping or hindering your efforts?
- Other industries – Extremely important to look at how different industries interact with each other
- Technology – What are the new technologies rising to prominence in and around your field?
- Competitors – What do they do that you can’t and why? What do your customers buy from them and why? How do their methods differ to yours?
Looking at the big picture of competitive intelligence allows you to take better decisions for the future and measuring that success or failure is what analytics is all about.
Looking outside the Analytics bubble
I read today that by 2020 70% of people worldwide with an internet connection will interact with social networking sites like Facebook or Twitter. This is pretty important for anyone trying to reach people – directly that statistic has nothing to do with my industry (analytics) but indirectly it’s extremely important if we want to be in business over the next few years to determine ways to measure social media interaction. One of Kwantic’s offerings is around this field and it’s an area we expect to grow in the next few years as more businesses realize this important shift in ways to do research and development, commerce or customer support.
Nokia and Apple
Another example relevant to Finland is Nokia and Apple. The iPhone has risen to prominence in the Smartphone market. The technology for browsing the web on the iPhone is currently stronger right now than anything Nokia have, as are the applications and the usability of the phone in terms of managing payments to Apple. You could say that Apple has especially focused on the markets where they were strongest and know the culture (USA and western Europe). In addition due to Apple patents (legal) Nokia can’t simply copy the technology to their own devices (though that is now been countered by Nokia who think Apple have infringed some of their own patents).
However for Nokia and the smartphone market I see this as a huge opportunity not a problem. All Apple have done is shown how the services and device model can work, something Nokia have been working towards for years. Nokia still have the best business phones in the world. The e71 is still, 3 years since it came to the market, one of the best business phones I have owned. In my opinion it still outperforms the iPhone in terms of connectivity, running call conferences and handling even simple things like calendars and the sending/receiving business contacts (I have owned both phones so I know what I am talking about). They also have Ovi, that with clever crowdsourcing could easily rival the App store and if they develop a business phone which also matches the iPhone for web browsing and application usability they have extremely strong market growth opportunities not only in the west but also in the emerging markets of Africa and Aisa – where they are very strong.
Here is a perfect example of where Nokia could worry about Apple’s numbers and market share but to do so would be counterproductive. What they should worry about is what customers and prospects want in the Smartphone category, which is I believe what they are doing.
Back to the Insight Model
The insight model was designed to show how combining customer data (user experience), with clickstream data (web) and taking into account the competitive environment (outside your company bubble) can lead to intelligent action. Action is the key. In all cases if you can’t act on the data it’s simply nice to know. Actions at least lead to measurable results and they in turn should lead to new actions. That leads to continuous forward motion that drives your success. Looking at competitors alone is only a small part of the whole discipline.