“On Monday I had a room of 30+ entrepreneurs glaring at me…. It started when I asked them how much time they spend in the following three basic areas of (any) business … The room fell silent when I told them how much they should spend:
Marketing: 60-80%
Production: 10-30%
Administration: 10%
…. [ because ] There is no one in your company that can sell your company better than you. No one!”

Doering’s is timely advice to anyone with an interest in making their business more successful, but it is especially pertinent to the majority of entrepreneurs whose business is the creation of their subject matter expertise – their superior ability to make or do something useful.

Marketing isn’t intuitive to many of us, and not comfortable for many others. If you’re one of these ….

First – Take time to something about marketing. The web is full of useful sources, great discussions, and access to real expertise. Linked-In and similar networking sites are particularly useful.
Second – Invest a lot of time getting to know your customers. Spend more time listening than talking. Find out what makes their business and their customer tick. Spend less effort trying to explain why your offering is so good and more effort figuring out how to solve their problems.
Third – Structure every aspect of your company – from product design, to sales, to invoicing, to customer service, to how the phones are answered and the emails responded to – to make it easier and more attractive for your customers to deal with you.

Remember – The ONLY source of your profits is a throng of customers eager to spend their $$$ with you.

Andy M – Owner
Hi Bob,
Your intelligence and research on the competition is vital to knowing why customers buy ( or dont Buy ) your product. Much of our work is in the retail arena, specifically consumer electronics and mobile phones… we go to retail outlets, ask the sales staff about a product, and let them talk freely about the pros and cons of each product and the brand as a whole.
Our USP is that at the time, we are wearing a hidden camera and record the whole interaction. With the technology as good as it is, we can then replay the DVD with our client and see how the product is marketed in store AND what the sales people say. Interesting viewing and an excellent sales tool.

Nelson Pérez Alonso – Presidente at CLAVES Informacion Competitiva and Owner, CLAVES Informacion Competitiva
In our experience, we have to control many dimensions of competition, a) what others are doing the companies that make similar products, as our customer and what the entrepreneurs are trying to develop to meet the same needs of consumers b) as being managed distributors or retail distribution channel as to recommend or not our products or services d) positioning in the mind of the consumer to satisfy the needs of our customers.
There is a difference in sgmento B2B in the B2C with large differences in methodology. We are developing intelligence systems, combining desk research, clipping, interviews with competitors, census of outlets, mystery shoppers, consumer surveys even to blind tests.
The key points are the definition of the variables to be monitored, frequency of survey and delivery and fundamentally how to distribution of the information provided within the client company to generate management decision and actions.
All this points of view we think are a little more difficult in Latinamerca because we have a culture more informal, less proffessional, and sistematic but we still continue doing our work and trying to chance minds of enterpreneurs
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Dr. Alexander Linder – Director Corporate Consumer and Market Insights (Swarovski)
Hi Bob,
I am really happy to read what you write in your blog. I am always pushing the direction to tell the marketing guys not to limit competition just to a similar product or a substitute, but rather to see things from a share of wallet point of view. Of course, it depends, what you are buying. If your decision goes in favor of a midsize car, Audi A4, BMW 3 series and Mercedes C Class can definitely seen as competitors. Or if you are looking for a HiFi-system, I think the same is true for Pioneer, Sony, Kenwood etc.
But things change when you look at a “leisure” shopping trip on a Sunday afternoon. You walk through a shopping mall or the aisle of seduction, how I call it. In my opinion, the brand that has the “right” product, makes you feel welcome, can offer you a perfect service and will make a lasting impression will most likely make the race. And that’s not always your brand…
The challenge for me is identifying your share of wallet competitors, because you have to monitor them in a certain way. One way is to ask our consumers about their favourite brands of different sectors, like clothing, jewellery, handbags, leather accessories, electronics etc. and then you ask them about possession of the different brands mentioned. Thus you get the brands, that are most likely in the relevant set of your consumers.
Linked-In group Marketing Research Bulletin
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Sean Campbell – Competitive Intelligence and Qualitative Market Research Professional
Agreed that looking at your own customers for inspiration is good but alone it isn’t the way to plan a long term growth strategy.
Effective CI looks at the current competitive canvas and off of it for threats that are emerging. Otherwise you get blindsided by a competitor who isn’t just looking at gaining insight from their own customers but yours as well. ;).
Solid CI looks forward into the future by pointing out clear opportunities for your business, to the side (to see threats that are “merging into your lane”), and helps you get a higher res version of what moves your competitors have made in the not so distant past.
The short answer is that you need competitive intelligence that looks outward and away from your own customer base as well as good deep intelligence on what your current customers like about what you have today and what they want to see from you in the future.
Linked-In group: Northwest MRA
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Debra Donahue – Vice President Market Analytics and Online Products, Mark Farrah Associates – Health Insurance Data and Market Analysis
Competitive intelligence is about understanding the broader market dynamics which includes understanding customers’ and suppliers’ motivations and drivers, not just competitors. The point of CI is well beyond just understanding what the competitors are up to. Woe to the company whose CI efforts and resources just focus on the competition. Staying aware of the competition so the company is not blindsided, should be one of the functions of CI, but agree that a company fixated on competition will miss one market opportunity after another.
Linked-In group: Medicare Advantage Healthplan Colleagues
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Bryant Holt – Consultant at Sears Holdings Management Corporation
Excellent article. I beleive CI has its place. Information should not be looked upon as single points in time. If we aggregate the information over time and relationships, the CI could be synthesized into meaningful value propositions that could be tested, or used as potential predictors. I don’t belive you saying it, and therefore, would not rule it out.
Linked-In group DuPont Alumni
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David Kaplan -Entrepreneurship Consultant
Hard to argue with looking to customers inspiration and direction; but that begs the question of what options they may have for fulfilling their needs. CI is certainly no substitute for customer focus, though it can help achieve that in a couple of ways. First, by making it clear what else appeals to customers (in addition to your own products or services), second by helping you understand what your competitors think customers want and third by helping you spot changes in your competitor’s behavior that may stimulate you to think hard about what is going on in your market place. One useful way to think about it is that competitors don’t compete with your products, they compete for your customers.
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Charles Stromeyer Jr. – Entrepreneur, Independent Consultant, and Volunteer
I agree with David. I’ve had first mover advantage on two separate occasions which means by definition that there were no initial competitors.
Not having insight from competitors forces the entrepreneur to merely make an educated guess about how potential customers will evaluate the products or services offered, and makes it harder to optimize customer service.
—
David Geraghty – Partner at Omega Business Partners
Bob, You are correct that businesses need to focus attention on patterns and choices consumers make that otherwise would be spent on their products or services.
I spent 18 years providing employee benefits programs to small & mid-sized businesses. My competition went beyond direct competition with other brokerage firms. In fact, I watched CPA’s, banks, attorney’s and HR consultants begin to capture this market as well as my client base.
We continue to evolve responding to the needs of customers providing new services related to payroll, investments, HR administration and other government regulated changes.
Competing in the B2B environment I observe macro trends, i.e. regulations, industry movement, business behaviors. A micro scale is direct communication with customers, suppliers / vendors and relevant movers.
I enjoyed your article, “What is Business Intelligence?”
Thanks for sharing.
Linked-In Group: Global MIT Enterprise Forum
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Prasad Devineni – Director & Partner SMOTEC PLUS
CI fixation is absolutely true with the major industry players. I used to be the director of CI practice for 10 years at Kline and for the last 5 years moved to marketing and sales of chemicals. Being a convert from CI to sales, these observations are right on the money. Customers do value alternate products and their value proposition is different. For long term growth of the company, you can not depend on CI as it is like driving the car forward by looking in the rear-view mirror. However, CI has its advantages to analyze and correct the direction in the short term if you have money to spend.
Linked-In Group: Brazil Sugar and Ethanol
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Guillermo (Bill) Cabiró – Strategic Analytics: Integration of Market Intelligence & Business Performance Metrics provides a profitable advantage.
Bob, Good article. It all boils down to creating value for the customer faster or greater than your competitors.
Regards, Bill
Guillermo (Bill) Cabiró – Strategic Analytics: Integration of Market Intelligence & Business Performance Metrics provides a profitable advantage.
Bob – Good article. Bill Gates said recently that he is worried about the unknown little guy working in a garage, inventing the next disruptive tehcnology that may obsolete MSFT. Regards, Bill
Linked-In group: Specialty Chemicals Network
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Donnie Edgemon -
The Market Intelligence Blog – Submitted on 2010/03/22 at 10:10pm
Bob – I’m glad you wrote this. I’ve found that CI is most popular in cash-flush companies in mature industries, and normally with #2 companies instead of #1s. Companies spend money on CI when they can’t figure out how to deliver value that will attract new customers, and can’t figure out how to deliver new value that existing customers will pay more for. In other words, companies that focus on CI are playing defense, and are bound for decline. The following question should be a prerequisite for any CI spending: “Is there any way that I could apply this money toward innovation or finding new markets?”

 “An upcoming study … suggests that this may not be the best route to take to generate unique and varied ideas. The researchers from Texas A and M University show that group brainstorming exercises can lead to fixation on only one idea or possibility, blocking out other ideas and possibilities, and leading eventually to a conformity of ideas.”

I’ve personally participated in, led and moderated many of these group brainstorming activities.  Formats vary widely – from an hour or so to a few days duration;  face to face, relatively no-holds-barred discussion or communication via keyboard;  small, select group of insiders vs outside experts and lay persons.   But regardless of format, the structure is nearly invariable:

- ‘Divergent’ brainstorming (the “there are no bad ideas” phase)

- Combining and ‘building out’ related ideas

- Assessing, rating and prioritizing of the ‘processed’ ideas

The A&M study provides substance to what I’ve long suspected – that the ideas that come out of group brainstorming sessions are long on consensus and conventional wisdom and short on breakthrough innovation.  A major part of the problem is the “nothing new under the sun” phenomenon – that truly new and truly valuable ideas are also truly rare.  Even the best idea generation strategy can’t fix that, but brainstorming methodology can be made better:

1. Use a mix of inside experts (to ground the discussion in reality) and informed outsiders (to broaden horizon and challenge conventional wisdom), but be diligent in suppressing the experts’ tendency to dominate.

2. Separate, as much as possible, the idea generating steps from the evaluation and selection parts of the process. Assign plenty of time and resources to flesh out and ponder the possibilities and consequences of each idea before passing judgment.

3. If you face a legitimate “We tried that back in ….” objection (and they’re often more legitimate than conventional wisdom will admit), succinctly identify what went wrong way back then and focus on what is different in the situation today.

There is, of course, no perfect recipe for coming up with the Next Great Idea, but there are some ways to increase the value and frequency of your successes.

I’m sure that people would appreciate hearing about your idea generation experience and techniques.

Much of the response was “yes, of course”, but I was surprised at the amount of pushback from the web commerce contingent.  Objections centered around 2 sentiments (apologies if I over simplify):

1. The web, and all the personal electronic communications tools attendant to it, are so easy and accessible that there is no longer a need for marketing to build a bridge between suppliers and customers.

2. The breadth and the anonymity of the web make it unnecessary and largely impossible to identify and speak to specific customer segments and their concerns.

Always open to new ideas and a new slant on things, I’ve thought a fair amount about the issue of marketing and web commerce.  Here’s where I come out:

1.  The web is a very efficient tool for OUTBOUND communication.  You can broadcast your message just as quickly as you can assemble it, at a nearly insignificant cost.  The big question mark, of course, is how to broadcast it so that your message gets seen and acted upon by people who matter.

2. The web can be a very inefficient tool for INBOUND communications.  While there’s essentially no limit to the amount of information out there somewhere, actually finding it is an often cumbersome and frustrating exercise, with lingering uncertainty over the reliability and completeness of the result.

3. The web bombards your potential customers with nearly limitless options.  Your message competes for your customers’ limited attention span not just with other products like yours, but with every other distraction that email, FB friends, and GOOGLE search can put between you and your customers’ SSS.

4. The web is a wonderfully efficient vehicle to educate and motivate interested prospects you’ve already made a connection with.

5.  The web is a wonderful TRANSACTION MEDIUM for motivated buyers – except of course, when it isn’t.  Web commerce work well for standardized products / services that customers can confidently buy sight unseen or for items that consumers can preview at brick-and-mortar stores.   

So ….  The web and personalized electronic communications provide powerful new avenues for suppliers to broadcast their messages and educate interested prospects, and for motivated buyers to execute their purchases.  To the casual or uninformed shopper, it offers vast but undifferentiated information, almost all of which is irrelevant and distracting to the purchase decision process.

Bottom Line?  Web based businesses need market just as much – perhaps substantially more – than their brick-and-mortar cousins.  Identifying which consumers are your most likely to spend their $$$ with you, learning where you’re most likely to find them in the electronic communications universe, and understanding how to make your message stand out amid all the clutter are quintessentially marketing functions.  Businesses that ignore these principles are headed for failure, regardless of their venue.

In a very real way, that neatly encapsulates the philosophy behind competitive intelligence.   The point of CI – to understand what your competitor is up to, so that you can do it better – is certainly valuable.  But over-reliance on a CI driven strategy can cause you to overlook the foundation of business success – capturing a larger share of your potential customers’ spending stream.  The implicit belief behind CI, that beating your competition will force customers to spend more with you, can blind you to real opportunities and dangers driven by evolving customer needs and preferences.  Why?

1. CI looks backward, not forward – to what your competitor is doing or has already decided to do in response to your actions or to market conditions. A strategy driven by CI is reactive – always following, not leading.

2. Being better than your competitor is no assurance that either of you is doing what the customer really cares about or needs.  Even the very best of the buggy whip makers lost out when cars replaced the horse and buggy.

3. Nothing forces customers to spend their $$$ with you OR with your competitor.  If neither of you is making them happy, then they can take their money somewhere else entirely.

Much of the CI philosophy is built around metaphors of football or war, endeavors in which you win by beating the other guy down.  Business success, on the other hand, more often comes from being the best at what a third party – the customer – really values. A business strategy that doesn’t focus squarely on the customer is ultimately a losing strategy.

 Competitive Intelligence is a valuable tool to help optimize near term business tactics, but for longer term growth strategy, look to the universe of customers for inspiration and direction.

“Great point Bob. I remember as a young agent at NE Financial they had a great program for Target Marketing. The key was to specialize in an area or industry, such as contractors, or veterinarians, or whatever. The point was to find out everything you could about that industry and the challenges that the business owner or professional had so you weren’t just a “product pusher”. You then put together a team of professionals (cpa, p&c broker, commercial banker who all specialized in those industries) and you quarterbacked the group. When done properly you became a real asset to that business owner instead of just another salesman. You will bury your competition once you achieve the role of Advisor.”

“Good points Bob, one time in my career I had to “sell” a product that cost several times the next best alternative, mission impossible, no. But as you pointed out understanding the customer want and I found a key component of what they want is what they value. They may want a chemical that gives high yields, but they value consistency, reliability of supply, and customer service, that may go a long way towards meeting the want of high yields. Normally to get high yields in a process you need consistency in raw materials, reliability of supply keeps them from starting and stopping and helps yields, and customer service is important so you can be responsive to problems and prevent yield issues. So your correct, customer needs are important ore with customers values the jewels I have found in the ore that let me jump the price hurdle and trounce the competitors offering. The real key is sometimes customers don’t know what they value, they will tell you their wants, but the values is what I have found unlocks the purchase order flow. You are so right selling is a process – learn your customer, learn your customer wants, then discover what your customer values, then make sure your offering meets the values which locks up the sale.”

That’s a question that anyone who is in business should think hard about from time to time. Understanding what your customers want and why they buy is the key to making your business more successful – whether you’re selling software to the Fortune 500, life insurance to the family down the street, building CNC milling machines, or offering your own handicrafts on E-Bay.

Regardless of what you’re selling, think of selling as a process, not a single event. It’s all about investing your time and energy to understand your customer – to see her problems, needs and hopes through her eyes – and about designing and presenting your offering in a way that makes her life better.

Especially if you’re selling a complex, expensive product/service, success takes a significant investment in your time. Here, the selling task is mostly about teaching your customer to see and appreciate how your offering will make her life better. To do that you need to intimately understand your customer’s problem from HER perspective.

Even if your product or service is so inexpensive that you can’t afford to invest your time in each and every individual customer, the principle still applies – KNOW YOUR CUSTOMER. For mass market items, segmentation is vital – What are the characteristics of the groups of people most likely to buy from you? What are their hot buttons? How best to get your message to them, in terms they’ll be most likely to respond to?

Whether you’re selling, investing the time to learn about what makes your customer tick – and connecting her concerns and aspirations to the solution you offer – is the road to success.

 1. TALENT – Whether it’s the ability to frame out a house or flawlessly install the plumbing, to lead a customer to decide on buying your insurance policy, to close the IPO, or twang a hot guitar lick, a level of competence at what you do is the price of admission to any job.  Develop your talent and expand your skills in ways that make you better and better at what you do.  No need to be discouraged if you’re not “the best” – there’s lots of room in every field for the “pretty good.”  And don’t be seduced by the thought that pure talent is enough to push you first across the finish line.  It always takes more … 

2. SHOWMANSHIP – Your job success probably doesn’t depend on using your musical talent to rivet the attention of a crowd intensely interested in the their next drink and the hottie at the next table, but ….  if your boss, your customers, your co-workers aren’t aware of what you can do, and eager for the value you can bring them, then you’ll never get the chance for your talents and your accomplishments grow to their full potential.

3. BUSINESS SENSE – Unless you’re an artist committed to starving, your success, in significant measure, means convincing an employer, a customer or an audience to pay you for your talent.  Why will they choose to spend their hard-earned money with you? Because, simply, you can bring them something of value – something they’re willing to pay you for.  The more effectively you can provide what’s important to your boss or your customer, the happier and more generous they will be in paying you.  Bottom line — understand and be responsive to the people who can make or break your success.

4. MAKE YOUR OWN LUCK – Face it, there’s nothing like meeting someone who knows someone.  There’s a large element of luck in that – being in the right place at the right time – but there’s a lot you can do to improve your chances.  Work hard at getting to know the people in your business – what makes them tick, what’s important to them and what’s not.  Make sure they know what you do, and what you can do for them.  Then use what you learn to to make yourself better, more visible, and more valuable.

Obviously, paying attention to these four aspects of your work life won’t guarantee you’ll be the next Springsteen, Bill Gates, or the next superstar of your particular field.  But investing some of your time and energy to strengthen your talents, increase your visibility, and make yourself more valuable to the people who matter can make you more successful in whatever you do.

But … I’ve learned that, deep down, the fundamentals of marketing and selling are just that – fundamental – regardless of the product or service you’re selling. Using my Four Fundamentals to guide your marketing and selling plans can pay big dividends, whether you’re selling insurance or plastics, cars or machine tools or houses, dental care or home remodelling. What are those fundamentals?

1. Know WHO your potential customers are and WHAT makes them tick, then FOCUS on the segments that fit you best
“You can’t be all things to all people” is especially true in business. Focus your attention and resources on the people who are most likely to appreciate and pay for what you offer. Make sure you understand what turns them on and turns them off, where they go to find offerings like yours, and who they listen to when they make decisions about your product / service.

2. UNDERSTAND the problems and opportunities your customers face (especially the ones they’re unaware of)
Few of your potential customers (even the most experienced and astute) really understand how their life or business situation could be better. It’s up to you to know the ins-and-outs of their situation so well that you can paint a convincing picture of the better future they could have if they choose you.

3. DESIGN YOUR OFFERING (your product or service plus all the other ways your customers interact with you) to best help them address the opportunity or problem
These days, the ‘better mousetrap’ is often not the mousetrap itself but the training, services, support and friendly accessibility that surround the steel springs and trigger device itself. The more effectively your offering solves yohavur customers’ problem, the easier it is for them to understand the ways you will make their life better – and the easier it is for them to find and do business with you – the more successful you’ll be.

4. Make sure you STAND OUT from your competitors, in ways that make a difference to the people who’s buying decisions determine your success
Not long after your customers start to prefer your new and improved mousetrap, your competitors will too. Don’t waste energy complaining about copycats, but focus instead on making sure your customers have good reasons to spend their $$$ with you instead of the competiton. (Just please, please, please resist the temptation to start down the seductive but often dead-end road of a price war.

I’ve grown to expect one or the other of these reactions —
“Holy smoley! It’s too much! How can you expect me to ever know and do all that?”
— or —
“I’ve been doing this all my life, so I know all I need to know about my customers and competitors.”

Truth is that both of these reactions are wrong. The market knowledge and the actions that underlie my Four Fundaments are within the reach and resources of any business – large, small, individual. And even the oldest and most experienced business dog can learn some valuable new tricks by taking a fresh, unbiased look at their marketplace.

Wondering how to get started? A great way is to engage a consultant, for example:
www.market-intel.com