5 steps to starting your competitive market intelligence function

Competitive intelligence (CI) and market intelligence (MI) are two of the most powerful tools you can use to stay ahead. Combined into competitive market intelligence (CMI), they give you comprehensive insight into your external business environment.

In this post, we’ll walk through:

• What CI and MI are (and how, together, they add up to competitive market intelligence)
• How intelligence levels up your strategic decision-making
• The ROI of CMI
• Five ways you can begin building CMI into your organization

What is market intelligence?

MI is the collection, analysis, and interpretation of data on your market, customers, and market environment. By compiling information on customer behavior and the business environment, MI enables you to make insight-driven decisions. MI aims to understand the target market and identify risks and opportunities, allowing you to develop successful market strategies.

What about Competitive Intelligence?

CI is the collection, analysis, and utilization of information on your competitors. This gives you a deep understanding of your rivals’ actions, strategies, strengths, and weaknesses. Having this intelligence helps you pinpoint threats and opportunities, helping you craft competitive strategies driven by data.

CMI is the magic that happens when you combine the two

MI covers a broad scope of the entire market environment, while CI focuses on your rivals’ activities and the competitive landscape. Both approaches empower businesses to make data-driven decisions and hone effective strategies for success.

…that being said, it makes perfect sense to combine the two disciplines and create a potent intelligence tool.

Competitive marketing intelligence (CMI) takes the best of both worlds, giving your business a deep insight into the market, competitors, and customers. By blending MI and CI, you can develop your strategy through a holistic view of your business environment, leveraging competitor insights, customer preferences, and market trends.

We’ll refer to CMI for the rest of this post.

Investing in intelligence pays off

CMI enables your company to make data-driven decisions through deep analysis of the environment. This levels up your strategic abilities. CMI means your organization can answer the big questions, such as:

• What will be the market’s growth in the years to come?
• What will your customers buy in the future?
• What will be the strategic direction of our competitors?
• Which disruptive technologies and business models could emerge?

There’s even a direct correlation between the depth of intelligence a company has and its business success. Let’s call it the ROI of CMI.

ROI of CMI

Companies that have World Class market intelligence* saw the following boosts as of March 2023:

• Shareholder value up by 62.9% (compared to 8.8% for the global stock market average from 2018–2023, according to S&P’s Transportation, Telecom and Software & Services Indexes)
• Profitability up by 77% (compared to 17.4% average of all Fortune 500 companies’ profit growth rates over 2015–2022)
• Decision-making efficiency is up by 24.6% (compared to the global average-level MI program)
• ROI on MI at 25% (compared to the global average-level  MI program)

*World-class market intelligence as defined by M-Brain’s Global Intelligence survey responses. To be considered world-class, a company must have received excellent scores in all nine of the survey’s key success factors and reached an overall average score of at least 4.4. Of the survey’s respondent companies, 5% are classified as having world-class intelligence.

5 ways you can build CMI in your organization

Now let’s examine how you can adopt CMI actions across your company. 

1. Build a rock-solid intelligence framework

When implementing CMI for your organization, getting the foundational steps right is important. You can enable data-driven decision-making by making intelligence an integral part of your strategic processes. Without intelligence, you’re just going on gut feelings. So, what’s the best way to start building CMI capabilities? How about intelligence frameworks?

An intelligence framework helps you structure and systematize how you intend to gather, analyze, and utilize information.

Having an intelligence framework in place lets you prioritize the steps you should take in your CMI actions. It can transform your intelligence gathering from being reliant on sporadic internal data to one that utilizes multi-sourced data and has clear objectives.

To build an intelligence framework, begin by identifying the scope of your CMI. At a basic level, your intelligence focus may be narrowed to competitors and customers and concentrated on recent events. This can lead to quick wins. But widening the framework to cover your entire operating environment, analyzing specific topics, and considering current events and future possibilities can provide you with a comprehensive market overview.

2. Identify and align stakeholders

Another crucial stage in creating an intelligence framework is stakeholder identification and alignment.

Identifying stakeholders means you have full insight into the individuals and groups with an interest (or impact) in your CMI actions. Stakeholders may be internal—for example, the various departments within your business. Or they may be external: customers, suppliers, or market analysts.

Having a clear understanding of who the stakeholders are ensures your CMI fits the purpose and allows you to gather diverse perspectives that uncover valuable data.

Aligning with stakeholders (usually internally) gets your organization’s CMI participants on the same page regarding the objectives and outcomes of your intelligence gathering. This promotes a unified approach and areas of focus, mitigating the risks of scattering participants’ efforts in different directions.

Alignment also aids in resource allocation. With everyone working towards the same objectives, time, budget, and human resources are spent on the most critical CMI activities.

It’s important to note that, depending on the objectives for your CMI actions, some stakeholders’ roles may be prioritized over others. Let’s say a company is pushing an aggressive expansion strategy reliant on targeting new customers and identifying new markets. In that case, CMI objectives may prioritize the intelligence needs of the sales team responsible for meeting expansion targets. This could leave others (for example, the product development or marketing team) out.

This brings us to the hard reality of CMI. Appeasing all stakeholders is rarely possible. But an effective, clearly understandable intelligence framework that spells out goals and processes can go a long way in communicating to all stakeholders why some teams have been prioritized in the intelligence activities’ scope.

3. Find the balance between ad hoc and long-term 

Both approaches have their places and bring benefits. But striking the sweet spot between the two can reap intelligence rewards.

Ad hoc intelligence-gathering is often done case-by-case for specific tasks. You can even call it firefighting because it’s driven by urgent and immediate needs.

The upside of this is agility; your company can rapidly get the intelligence it needs to deal with a looming threat or an intelligence question that needs answering immediately. For example, a sudden shift in the market or the entry of a new disruptor can necessitate an ad hoc CMI response.

What is the downside of ad hoc intelligence? Your CMI risks losing sight of the bigger intelligence picture. Leaping from one urgent task to another doesn’t always allow you the time to effectively gather and analyze the data you need to get a comprehensive overview of what’s shaping your operating environment. You can end up trapped in reaction rather than pro-action.

Let’s compare that with a continuous, long-term intelligence approach. Long-term CMI requires a commitment to systematic monitoring, analysis, and interpretation based on the identified events in your operating environment. The benefits of this are numerous.

Long-term CMI allows you to distinguish emerging trends, gain insight into market dynamics, and perceive changing customer behavior that might be unrecognized in ad hoc research.

A continuous, systematic intelligence approach gives your company a forward-looking point of view. Understanding the shifts affecting your market and keeping track of disruptive forces empowers you with foresight and encourages you to be proactive. 

Let’s take a classic case of CMI failure. Blockbuster Video. The organization’s inability to recognize the trends disrupting its marketplace, such as the emergence of new streaming services (and the related failure to acquire Netflix), led to its downfall.

But this story could have ended differently if long-term intelligence research had been utilized. It would have granted Blockbuster clear insight into the rise of streaming services, data-driven predictions of their increase in market share, and changes in customer behavior.

Building great CMI requires blending the agility of ad hoc intelligence with the long-term, holistic, foresightful powers of continuous, systematic CMI. This gives your business a wide-screen perspective into the forces shaping your operating environment—today and in the future.

4. Select the right tools for your CMI

So, using your intelligence framework, you’ve identified the objectives, goals and stakeholders of your CMI actions. You understand the benefits and use cases of ad hoc vs long-term intelligence approach. Now you need to choose the right tools for the job. 

There’s a reason tool selection shouldn’t begin before you’ve defined your intelligence goals. Having a set of strategic intelligence objectives allows you to choose the tools that best align with those objectives. It also helps refine your selection, making it easy to reject the tools that don’t fit your needs.

Once your intelligence goals are set, there are a few strategic considerations related to the range of intelligence tools available to you.

Firstly, does the tool fit within your budget? There’s no point blowing the CMI budget on a tool that’s not essential. Take a step back to look at your expectations for your CMI, and then figure out what tool can best help you achieve them.

Next, you’ll want to consider the scalability and ease of integration. Can the tool seamlessly merge with your company’s existing systems? Select a tool that offers the best efficiency for hassle-free data flow.

Finally, it’s important to minimize the intelligence tools you use. Slimming the selection down makes integrating data sources easier, thereby deriving insights and driving decision-making.

Refining the number of tools you use also aids cross-team collaboration. By opting for an easily adopted, shareable intelligence platform, you can get stakeholders from multiple teams on board, fostering deeper insight.

5. Don’t overload on data

When carrying out intelligence gathering, it can be easy to feel like you’re drowning in data. The sheer volume of it can be daunting. At worst, this can leave teams struggling to derive meaningful insight from the mountains of facts and figures.

Processing and analyzing vast amounts of data can also risk burning through your resources, taking crucial time away from other important tasks.

Luckily, you can do a few things to mitigate the risk of death by data.

Artificial Intelligence has automated many aspects of data gathering. This frees team members from mundane tasks such as manually seeking out data or painstakingly visualizing data.

Let AI take some of the strain on processing and refining data. The human touch is still absolutely needed when drawing conclusions from processed intelligence. Automation just gives your team more time to focus on analysis and interpretation (what does this mean to us?).

Another route through the data mountain is via actionable insight. Tying your analysis to actionable insight helps your team focus on key results rather than attempting to analyze every single data point.

Actionable insights act as a guiding light through the reams of data. Formulating targeted strategies gives you an understanding of what types of insight you’re looking for. And what data do you need to reach that insight?

Final thought: Foster an intelligence culture across your company

The previous steps can’t fully come to fruition if your company doesn’t adopt an intelligence mindset. This is when an organization promotes intelligence as a fundamental part of its operations, not simply a separate process. 

In an intelligence culture, insights derived from data are embedded across teams. Stakeholders are encouraged to collect, share, and utilize intelligence to help drive these insights.

An intelligence mindset runs right the way through an organization. Management can foster this by voicing continuous support for CMI actions and by requiring insight-driven decision-making.

Intelligence is an ever-evolving process. By building CMI into all your intelligence actions, you can set your company up to remain a step ahead of the future.

Looking for a platform where you can search, organize, store, and share intelligence materials? Take a look at the Valona Intelligence Platform – the most intelligent Competitive and Market Intelligence software for insights-driven companies.