Competitive intelligence is now synonymous with business success. Understanding competitor behavior and actions helps organizations build better produ
Competitive intelligence is now synonymous with business success. Understanding competitor behavior and actions helps organizations build better products, offer better services and introduce stronger business strategies to help with market positioning. If your business prioritizes identifying challenges, advantages, and opportunities within your market by understanding how your competitors operate, your business uses competitive intelligence for better decision making.
The process begins with gathering information from as many credible sources as possible for analysis. This process does not happen overnight and needs to remain constant to be supplied with up to date information. In order to derive more value from your competitive intelligence activities, businesses must offer methods to measure impact.
KPIs or Key Performance Indicators are critical for any business to measure their success against past performance or gauge the efficiency of day to day activities. 67% of businesses heavily invested in CI (competitive intelligence) offer clearly defined KPIs to assess the same. While this may be a relatively recent practice, 74% of organizations with a dedicated CI program have introduced KPIs as a measure.
Measuring CI
In order to produce the best results from your CI activities, the business must set feasible Competitive Intelligence goals and ensure the right KPIs are used to monitor the same. Keep in mind there are no two identical competitive intelligence plans. Businesses often recruit competitive intelligence firms to help them identify both niche and conventional competitors, ensure all departments have activated CI for purposes unique to their department and introduce metrics to measure competitive intelligence of different organizations that operate in ways differently to the businesses assessing the market.
With clear competitive intelligence goals in hand, businesses should focus on the following four KPIs;
- Stakeholder Confidence
A true test around the effectiveness of competitive intelligence actions is to ensure all stakeholders are able to make the right decision at the right time confidently as a result of the information supplied. Stakeholders must have a clear understanding of what is happening within the market to make the best decision possible. Marketing teams are able to introduce innovative campaigns based on competitor success or failure, sales representatives know how to better position their product when talking to prospects and business development teams are able enhance product or service features for better sales.
Surveying stakeholders to ask them about their confidence level is the easiest way to get a frank answer.
2. Win & Competitive Win Rate
Win rates refer to an organization’s ability to convert prospects into buying customers. Calculating a win rate is as simple as dividing won opportunities by total opportunities. Businesses can use this formula to assess how well a competitor is doing and benchmark performances against each other.
Keeping an eye on your competitors win rate helps as a KPI helps businesses measure up against key players within their industry.
3. Customer Retention
Customer retention can be calculated with the formula [(E-N)/S]*100. In this formula E represents the total number of customers at the end of a predetermined period, N is the number of new customers added through the same period and S represents the number of customers at the start of said period.
Using customer retention as a KPI helps the business understand how effective the business is at problem solving and highlights the product/service offered by the organization is valued by the market and its customers.
4. Revenue Growth
This high level KPI is the most commonly employed by businesses using competitive intelligence. Tracking revenue growth helps a business understand the impact of their efforts and encourages stakeholders to trust the organization and its methods. Tracking influenced revenue in particular allows a business to measure the revenue created by actual engagement and CI deliverables.
There is no doubt CI-influenced revenue growth is a powerful KPI that must be monitored to ensure business success.
For individuals or organizations still unsure of how to capitalize on competitive intelligence and introduce the right KPIs for their organization, recruiting a competitive intelligence consultant firm can be extremely beneficial. Recruiting KPIs to accompany your CI plan is definitely a strong way to inch ahead of your competitors and maintain a firm position within your market.
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