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As in any industry, every tech company has competitors. But tech companies have a particular challenge with competition in that the barriers to competing with a tech company are often dangerously low. It is relatively easy, for example, to build a nearly exact copy of another company’s website, or to tear down and reverse-engineer a hardware product to figure out what makes it tick and then build a new product very similar to it—or better.
In addition, tech companies, all the employees who work for those companies, and all the people who buy their products and services are meshed in a tangled web of information exchange, all enabled by the Internet. More so than in most industries, there are few secrets in tech.
How, then, do tech companies survive against each other? One way is to "execute better"—even if your competitor makes a product better than yours, if your company can sell it better, your company will win in the market. The other way is to predict what your competitors will do, analyze what they are doing or have done, tailor your marketing messages to position your company better versus them, and train your Sales team how to attack your competitors’ weaknesses. This is the art of competitive analysis.
In smaller tech companies, competitive analysis is usually managed by Product Marketing or Product Management. As a tech company grows, or as its market becomes more competitive (because there are more competitors, or because the competitors have gotten "smarter"), the need for a dedicated Competitive Analyst becomes apparent.
What They Do
A Competitive Analyst is a cross between a researcher, a detective, and strategist. At the highest level, they gather information, analyze it, and disseminate findings and recommendations. There are a lot of sub-steps in that process.
First, Competitive Analysts have to stay on top of what their competitors are doing. At a minimum, this involves reading competitors’ press releases and any media coverage about them, monitoring their websites for updated product information, and tracking what trade shows or other industry events they attend and evaluating what they do there.
Beyond that, a Competitive Analyst needs to establish a programmatic way to collect intelligence from the richest source: the Sales team. Salespeople and Sales Engineers are constantly exposed to valuable competitive insights while engaged in a sales cycle. A prospect may tell them, for example, that Competitor X underbid your company’s price by 15%, or that Competitor Y has a new product coming out in three months that will render your comparable product obsolete. A good Competitive Analyst will train the Sales team to report any and all such nuggets of information to him, whether in person, by email, by phone, or perhaps by a form on the company intranet.
The second part of competitive analysis is analyzing all the information collected. This is done on an ongoing basis. The Analyst needs to sift through all intelligence collected recently as well as all historical intelligence and discern what is important and what is credible, with an eye for trends and patterns. For instance, if a competitor underbids you by 15% just once when they typically bid about the same price, that may be a fluke. But what if they’ve done that consistently in the last five deals? Or what if they’ve done that repeatedly, but only in deals in a particular territory, or when selling to customers in a particular vertical, or for a specific product? Perhaps an ambitious new salesperson is trying to win more deals in his territory; perhaps the competitor wants to increase its market share in a particular vertical (which may signal that they have a Market Developer or Segment Marketer assigned to it); or maybe the competitor is about to discontinue a hardware product line and is selling its remaining inventory at a blowout price.
Like a scientist, a Competitive Analyst needs to formulate a hypothesis about what’s happening and seek support for it by evaluating all the intelligence he has collected. Once he believes he knows what a competitor is up to, the Analyst needs to disseminate the information.
The primary audience for what a Competitive Analyst discovers is usually Sales and Product Management. The Sales team is of course interested in how to combat competitors more effectively. Sometimes all the Analyst needs to do is give Sales a "heads-up" about what competitors are doing, such as making a new claim in sales cycles, using a new pricing model, or launching a new product. In other cases, complex new developments may require training the Sales team more formally, perhaps at a quarterly sales training session.
Salespeople also tend to like "killpoints" and "traps." Killpoints are simple but effective arguments and counter-claims to shoot down detrimental claims made by competitors about your company in deal cycles. For instance, a competitor may have discovered a bug in your software and is telling your prospective customers about it. Your Sales team needs to know precisely what to say in response when your prospect asks about it. Traps or "landmines" are essentially killpoints made ahead of time. Before a prospective customer asks about that software bug, what can a salesperson say that would make the competitor look bad if they brought it up?
The other primary beneficiary of competitive analysis is Product Management, which is interested in knowing what features competitors’ products have and how those products work. This includes more subtle product characteristics as "look and feel" or overall ease of use. Product Managers use this information to ensure that they’re building the right products to compete effectively.
Other groups in the company may be interested, too. Market Developers and Segment Marketers would find it useful to know how competitors are tackling the markets they’re focused on. Certain partners may find such information useful, too. And all Executives, especially in a public company, need to be prepared to answer questions from investors and the media about their competition.
If you think this all sounds like what the Central Intelligence Agency does, you’re right. The "intelligence game"—whether it’s about companies or governments—is played essentially the same way.
Useful Skills
There is an art and a science to competitive analysis. Most important is to be a strategic thinker. The hardest part of CI is not understanding what a competitor already did but rather predicting what they might do, proactively assessing what impact that might have, and planning for the worst. This takes imagination and creativity.
It also helps to be able to spot broader historical and current trends and think several steps ahead. Good chess players have this skill.
Finally, understanding the sales process and, in particular, how salespeople work is essential. Unless the Analyst can translate his or her findings into usable and effective anti-competitive tactics, the information and analysis is by itself worthless. The insight of what to give Sales to help them do their jobs better takes time and patience to acquire.
Career Paths
There’s no common background for competitive analysis. Most people tend to fall into it from Product Marketing or Product Management roles, where it’s often one of their many job responsibilities (especially in smaller tech companies).
CI is rarely an entry-level job. To do it well generally requires a diverse range of experience in marketing or sales, and many employers now seek Analysts who hold an MBA. Even so, some companies hire less experienced analysts at the Associate level to perform some of the more tactical components of CI, such as monitoring the media for valuable insights.
Knowing your market—the competitors, the customers’ needs, and what’s changing in the industries your company serves—is critical. This is why many Analysts are hired into tech companies from companies in the target markets they serve.
Strong analytical skills are also important. This is one reason many tech companies seek those with a Master’s degree (MBA, MS in Marketing Research, or similar), or work experience with a large consulting firm with an "analysis heavy" focus.
If you’re interested in the CI field, you may want to join the Society of Competitive Intelligence Professionals (SCIP; see www.scip.org).
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Competitive Analysis/Intelligence
As in any industry, every tech company has competitors. But tech companies have a particular challenge with competition in that the barriers to competing with a tech company are often dangerously low. It is relatively easy, for example, to build a nearly exact copy of another company’s website, or to tear down and reverse-engineer a hardware product to figure out what makes it tick and then build a new product very similar to it—or better.
In addition, tech companies, all the employees who work for those companies, and all the people who buy their products and services are meshed in a tangled web of information exchange, all enabled by the Internet. More so than in most industries, there are few secrets in tech.
How, then, do tech companies survive against each other? One way is to "execute better"—even if your competitor makes a product better than yours, if your company can sell it better, your company will win in the market. The other way is to predict what your competitors will do, analyze what they are doing or have done, tailor your marketing messages to position your company better versus them, and train your Sales team how to attack your competitors’ weaknesses. This is the art of competitive analysis.
In smaller tech companies, competitive analysis is usually managed by Product Marketing or Product Management. As a tech company grows, or as its market becomes more competitive (because there are more competitors, or because the competitors have gotten "smarter"), the need for a dedicated Competitive Analyst becomes apparent.
What They Do
A Competitive Analyst is a cross between a researcher, a detective, and strategist. At the highest level, they gather information, analyze it, and disseminate findings and recommendations. There are a lot of sub-steps in that process.
First, Competitive Analysts have to stay on top of what their competitors are doing. At a minimum, this involves reading competitors’ press releases and any media coverage about them, monitoring their websites for updated product information, and tracking what trade shows or other industry events they attend and evaluating what they do there.
Beyond that, a Competitive Analyst needs to establish a programmatic way to collect intelligence from the richest source: the Sales team. Salespeople and Sales Engineers are constantly exposed to valuable competitive insights while engaged in a sales cycle. A prospect may tell them, for example, that Competitor X underbid your company’s price by 15%, or that Competitor Y has a new product coming out in three months that will render your comparable product obsolete. A good Competitive Analyst will train the Sales team to report any and all such nuggets of information to him, whether in person, by email, by phone, or perhaps by a form on the company intranet.
The second part of competitive analysis is analyzing all the information collected. This is done on an ongoing basis. The Analyst needs to sift through all intelligence collected recently as well as all historical intelligence and discern what is important and what is credible, with an eye for trends and patterns. For instance, if a competitor underbids you by 15% just once when they typically bid about the same price, that may be a fluke. But what if they’ve done that consistently in the last five deals? Or what if they’ve done that repeatedly, but only in deals in a particular territory, or when selling to customers in a particular vertical, or for a specific product? Perhaps an ambitious new salesperson is trying to win more deals in his territory; perhaps the competitor wants to increase its market share in a particular vertical (which may signal that they have a Market Developer or Segment Marketer assigned to it); or maybe the competitor is about to discontinue a hardware product line and is selling its remaining inventory at a blowout price.
Like a scientist, a Competitive Analyst needs to formulate a hypothesis about what’s happening and seek support for it by evaluating all the intelligence he has collected. Once he believes he knows what a competitor is up to, the Analyst needs to disseminate the information.
The primary audience for what a Competitive Analyst discovers is usually Sales and Product Management. The Sales team is of course interested in how to combat competitors more effectively. Sometimes all the Analyst needs to do is give Sales a "heads-up" about what competitors are doing, such as making a new claim in sales cycles, using a new pricing model, or launching a new product. In other cases, complex new developments may require training the Sales team more formally, perhaps at a quarterly sales training session.
Salespeople also tend to like "killpoints" and "traps." Killpoints are simple but effective arguments and counter-claims to shoot down detrimental claims made by competitors about your company in deal cycles. For instance, a competitor may have discovered a bug in your software and is telling your prospective customers about it. Your Sales team needs to know precisely what to say in response when your prospect asks about it. Traps or "landmines" are essentially killpoints made ahead of time. Before a prospective customer asks about that software bug, what can a salesperson say that would make the competitor look bad if they brought it up?
The other primary beneficiary of competitive analysis is Product Management, which is interested in knowing what features competitors’ products have and how those products work. This includes more subtle product characteristics as "look and feel" or overall ease of use. Product Managers use this information to ensure that they’re building the right products to compete effectively.
Other groups in the company may be interested, too. Market Developers and Segment Marketers would find it useful to know how competitors are tackling the markets they’re focused on. Certain partners may find such information useful, too. And all Executives, especially in a public company, need to be prepared to answer questions from investors and the media about their competition.
If you think this all sounds like what the Central Intelligence Agency does, you’re right. The "intelligence game"—whether it’s about companies or governments—is played essentially the same way.
Useful Skills
There is an art and a science to competitive analysis. Most important is to be a strategic thinker. The hardest part of CI is not understanding what a competitor already did but rather predicting what they might do, proactively assessing what impact that might have, and planning for the worst. This takes imagination and creativity.
It also helps to be able to spot broader historical and current trends and think several steps ahead. Good chess players have this skill.
Finally, understanding the sales process and, in particular, how salespeople work is essential. Unless the Analyst can translate his or her findings into usable and effective anti-competitive tactics, the information and analysis is by itself worthless. The insight of what to give Sales to help them do their jobs better takes time and patience to acquire.
Career Paths
There’s no common background for competitive analysis. Most people tend to fall into it from Product Marketing or Product Management roles, where it’s often one of their many job responsibilities (especially in smaller tech companies).
CI is rarely an entry-level job. To do it well generally requires a diverse range of experience in marketing or sales, and many employers now seek Analysts who hold an MBA. Even so, some companies hire less experienced analysts at the Associate level to perform some of the more tactical components of CI, such as monitoring the media for valuable insights.
Knowing your market—the competitors, the customers’ needs, and what’s changing in the industries your company serves—is critical. This is why many Analysts are hired into tech companies from companies in the target markets they serve.
Strong analytical skills are also important. This is one reason many tech companies seek those with a Master’s degree (MBA, MS in Marketing Research, or similar), or work experience with a large consulting firm with an "analysis heavy" focus.
If you’re interested in the CI field, you may want to join the Society of Competitive Intelligence Professionals (SCIP; see www.scip.org).