Don’t ignore what your competitors’ customers and partners have to say

Editor's note: Sean Campbell is co-founder of Cascade Insights, a Portland, Ore., competitive intelligence firm. He can be reached at sean@cascadeinsights.com.

Why do so many organizations fail to listen to the voice of the competitor? Hubris. While hubris is not new, whether we are talking about Roman emperors or business leaders in the 21st century, it is clear that hubris is still an organization killer.

But what can inoculate us from the disease? I believe the simplest and most straightforward way to protect against hubris is to bring the outside world in.

Bring the voice of the competitor’s customers, the voice of their partners and the voice of their products into your own building. Make it clear that the competitor should not be ignored. Make it clear that the competitor can and should be beaten. And when they cannot, make it clear under what circumstances they are likely to win, regardless of your best efforts.

What are the steps to doing this effectively? How can you bring the voice of the competitor into your offices, into your conference rooms and into your corporate campus?

Here are the three voices you will need to research, package and disseminate within your own company:

The voice of the competitor’s customers. You need to understand why they bought from the competitor and why they might again.

The voice of the competitor’s influencers. You need to understand why they are so interested in promoting another company’s products.

The voice of the competitor’s partners. You need to understand why partners bond with the competitor and why they sometimes choose that relationship over one with you.

What about VOC – the voice of the customer? Many organizations have buckets of data on their own customers. They have so much data on their own customers that they send them Christmas cards, birthday cards, mailers of every kind and in many cases they essentially know what their own customers are going to want before those same customers know it themselves.

But does all this data, on your own customers, lead to insight on where the market is headed? Does it help you win new customers or enter new markets?

It may. But likely and sadly it does not in the grand majority of cases.

This is because of having a bucket of (even big...) data on your own customers is only half the picture you need. And a focus on only half of the picture is evident everywhere you look in many large companies.

For example, if you were to walk into a typical meeting in a large company you might find that much of the discussion centers on who the company’s customers “are” or “are not.” You’re also likely to find that much of the discussion keeps returning to the same customer archetypes. In addition, if you were to jump into a time machine, you might find these very same archetypes being discussed five, 10, or even 15 or 20 years ago, perhaps in the very same conference rooms.

In addition, some companies, particularly those of long standing, turn these customer archetypes into a company creation story, one that typically goes back to the dawn of the organization. In this story the company “gets” a certain type of customer. In fact, in this story, they are the only ones who “get” the needs of this particular customer in a particular industry.

In this type of environment the voice of the competitor is muted, so much so in fact that the competitor appears incapable of meeting the needs of anyone.

But what if someone else has met the customer’s requirements, fully and completely? So completely in fact that you weren’t even given a seat at the negotiating table?

Here are just a few classic examples of companies that failed to listen to the voice of the competitor before it was too late.

Digital Equipment Corp. – PCs will never beat microcomputers.
Kodak – Digital isn’t as good as film.
Sears – Kmart won’t steal our customers.
Kmart – Target and Walmart won’t steal our customers.

Alongside some modern-day examples as well:

Best Buy – No one will buy a TV online (Amazon).
Microsoft – Mobile will never beat PCs. (iOS/Android).
Novell – We can do open-source better than Red Hat, closed-source better than Microsoft.
BlackBerry – The world likes a physical keyboard and always will.

So what can help move us:

• from competitor profiles that are based on myth to those that are based on fact;
• toward an understanding of a customer’s key buying criteria that is objective and not rooted in our own preconceptions; and
• toward a complete understanding of the “job” that the market wants done today as opposed to yesterday?

Marrying our knowledge of our current customer with that of the voice of the competitor. How does an organization effectively bring the voice of the competitor into the building? How does it make it so that it truly understands how the competitor is being successful and decide where to go head-to-head and where to differentiate?

The competitor’s customers

The first step is to find the competitor’s customers. And fortunately that process is a much easier than it would have been in years past. To understand the difference let’s first take a step back to the year 2000. Back then, we were just getting over our (misplaced fear) of Y2K, Gladiator was one of the most popular movies of the year and most homes were connecting to the Internet using dial-up.

So what did a typical sales and marketing process look like in that world? For starters, the (desk) phone was in use a great deal more, as were in-person visits. And a Web page wasn’t much more than an inventory of a company’s products and services. Therefore the Web was a far cry from the interactive portals that we see today.

But what does this have to do with voice-of-the-competitor research? A great deal.

Given the fact that sales cycles, marketing cycles, hiring cycles and much of what business is was not conducted via the Web in the year 2000, a competitor’s customers did not leave a meaningfully-sized digital exhaust or smoke trail, if you will, about who they were engaging with, buying from or were happy to evangelize in a public (Web-based) setting.

In fact most of the knowledge about what a customer was doing with suppliers, vendors and partners could only be identified via phone chats or in-person visits with sellers, marketers, customer service reps, friends, family and business colleagues.

In 2000, it was very difficult to determine who a competitor’s customers actually were, primarily because much of this customer activity occurred within the bounds of “closed” networks. In addition, any invitation to join these networks was unlikely to be extended to a company that offered a competing solution to the one an organization just purchased.

In fact it could be so difficult to find specific customers of a competitor that it was easier to say that it was impossible. Hence, it was simpler and more effective to research your own customers and hope for the best in terms of developing an understanding about the market.

But it’s now 2015 and you don’t have to do that anymore. You can identify a large number of your competitor’s customers. You can identify their partners and you can identify influencers. You can even clearly see the messages that they are pushing to customers across various sales and marketing channels. All of which leads to you bringing the voice of the competitor into your building. A process which will keep your own sales, marketing, strategy and product development efforts more in line with the world around you.

Build out a list

Let’s walk through how we might build out a list of the competitor’s customers using  reverse engineering. Why reverse engineering, you might ask? Because misappropriating a list of your competitor’s customers is very likely to be against the law and will typically be considered unethical even if not strictly illegal. But what is completely above board is looking for and building out a list of your competitor’s customers from open-source intelligence assets (OSINT).

Here are a few examples:

• You can mine LinkedIn profiles to look for instances where the competitor’s products are mentioned. In some cases employees will list a product as a skill that they acquired on the job. This technique also works particularly well in industries that are more technical or are engineering oriented.
• Mining job postings can be fruitful. You should begin by looking for job postings that mention the competitor’s products or services. Seeing a competitor’s products in an organization’s job posting is a clear sign that the products are in use (or soon will be) by that company.
• A competitor’s own case studies can contain a treasure trove of data. You can see the types of companies they have sold to and even get a sense of what industries they have successfully worked with in the past.
• Broad-based social media mining, across Twitter and other social networks, can also uncover customers who are commenting about the competitor’s products and where they are currently in use.

These are just a few of the ways in which you might identify a company’s current customers. The important thing to note is that none of these approaches involve mining your own CRM system for “losses.” While we don’t discount CRM-based loss data entirely, we feel an overreliance on it can be problematic, simply because loss-based data, by itself, can’t meaningfully answer the following questions:

• Why didn’t we even have a seat at the table when the customer was making a decision?
• What customer segments are our competitors active in today that we are not?
• What verticals are our competitors active in today that we are not?
• What type of geographies are our competitors active in today that we are not?

In short, if you filter your analysis down to where “you” play today you likely won’t see the full playing field that you and your competitors play on. If you lack that kind of full-court visibility you might be enhancing your competitor’s long-term chances at the expense of yours.

Influencers and partners

Outside of the competitor’s customers what other voices do we need to hear from when conducting voice-of-the-competitor research? A competitor’s influencers and its partners. This may seem an interesting choice given these organizations are not strictly customers per se but the role these organizations play as information brokers is vital.

A partner network’s ability to limit or promote certain messages can make or break the fortunes of a company. In fact, this effect has been widely studied and discussed in a number of popular books such as Co-Opetition and The Wide Lens. As Ron Adner puts it in The Wide Lens, understanding your partners is important because “When you rely on partners to enable your success, your success becomes vulnerable to your partners’ progress.”

But if this is so, why do companies frequently fail to research their competitors’ partner networks as well? Why do they not ask questions like the following?

• What drives a partner to join a competitor’s partner program?
• What benefits (direct and indirect) do they receive from joining the program?
• How many of our current partners are also partners of the competitor?
• If a partner organization could only join one program (ours or theirs) which one looks better on paper? Which one looks better after one year of being in the program?
• Is the competitor’s partner program growing or shrinking and where is this activity most prevalent?
• What type of role does the competitor’s partner program play in their business success? (Assume it may not be the same as yours.)

Unfortunately, in many cases, organizations assume that each partner is a captive asset – thereby treating partners as if they were a “child” business rather than a business in their own right and expecting them to be more interested in what their “parent” is doing than the world around them.

In fact, the great majority of your partners are very aware of the options they have before them – which is one of the reasons interacting with your own partners and those of the competitor can generate such solid insights. Each partner is a sensor of sorts, listening and sifting through the stream of offers and counteroffers that other potential partners (your competitors) might be able to provide.

In fact, we like to say that one partner interview is worth five customer interviews because a partner interacts with more of the market on a daily, weekly, monthly and yearly basis than any typical customer might.
Unfortunately, many organizations see their partners as only receiving communication from one channel: themselves. And in fact, there is not just one reason (that 1:5 ratio) but instead are two reasons you might talk to partners.

For many obvious and practical reasons there is information about your competitor that you will never have firsthand access to. Beyond any practical ethical and legal considerations that might leap to mind, you simply don’t work in the competitor’s building and therefore your knowledge of operations, investments, future plans, etc., is going to be through secondhand sources.

But if you consider yourself to be first and foremost a reporter of true market conditions, as a researcher you are going to want to find the most efficient pathway to the truth.

And partners provide just such a pathway. For example, your competitors are regularly speaking to their partners (and potentially yours) about why they are a good buy. Common topics of conversation include: the competitor’s product futures; current pricing models; future pricing models; expansion plans; and competitor counter-pitches.

What’s perhaps most interesting is that as your competitor pitches themselves to new partners many of the same subject areas mentioned above are also covered in these conversations. Hence your own partners may have visibility into the very questions outlined above, simply because they’ve been pitched by the competition. But you’ll only know that if you take the time to reach out and ask.

We’ll offer the same advice here that we did when talking about interacting with the competitor’s customers: Don’t just interact with partners who are currently engaged with you or the competitor. Look for those partners in regions, industries or segments who have yet to commit to either of you. These more agnostic players can sometimes provide a clear signal as to where the market may be headed next and what your future (and those of your competitors) might be in it.

Fortunately, with the right amount of effort, partners can be easily identified and then inserted into voice-of-the-competitor research efforts.

Some examples include:

• A company’s own partner conference, as many of a company’s own partners are working with organizations that they compete with, either indirectly or directly. (That’s why it’s called co-opetition.)
• Partner portals. These are put up by the competition or third parties. In many cases you’ll be able to quickly identify partners in your region or focus area.
• Business social networks and simple Web searches. Partners have their own business to lead and drive, hence they will be driving their own evangelism, marketing and sales efforts. Therefore, even simple Google searches can turn up a wide range of potential partners to talk to.

Finding a competitor’s partners isn’t usually the hard part. Think about it: They want to be found. What is important is to have a plan to engage these organizations from the start of the research effort and to have the right questions in hand when the conversations start.

Best chance of survival

History has shown that companies that understand the world they live in have the best chance of survival. Focusing your efforts on half the puzzle, the voice of your own customers, and ignoring the rest, the voice of the competitor, is likely to leave you with blind spots at best and a company that is at risk at the worst.

Don’t make that mistake. Ensure that your own employees have a clear an unbiased view of the market and your competitors before you: plan your next product launch; develop your next set of sales messaging; build out a new marketing campaign; or develop corporate strategy. As Ralph Waldo Emerson said, “Unless you try to do something beyond what you have already mastered, you will never grow.”