Customer and Competitor Intelligence

Applying customer analysis and competitive intelligence requires researching what your customers need and what your competitors can offer. You must find, analyze, and manage the information to ensure it drives key selling messages in the bid. Research and analysis can help you focus your opportunity/capture and proposal strategy, set yourself apart, and win more bid.

Introduction

What compels a customer to buy one company’s products and services over another’s? How does a company distinguish itself from the competition to win new business? What can companies do to improve their odds of submitting the winning proposal? The answers to these questions lie in planning the strategy and approach, researching the customer’s needs, and objectively identifying competitors’ strengths, weaknesses, and strategies.

Customer and competitive intelligence is a key part of opportunity/capture planning and can help organizations develop winning proposals. Whether for commercial sales or government contracting, application of best practices in these two areas can drive effective proposal writing.

Incorporating the tools and practices of customer analysis and competitive intelligence enhances narrative development, strengthens your value proposition, and highlights strengths that complement your customer’s priorities and RFP requirements. It allows you to present solutions that overcome competitor weaknesses—and it provides data you need to create effective strategies and compelling proposals.

Best Practices

1. Understand the importance of gathering customer intelligence.

Customer intelligence is understanding a customer’s needs—spoken and unspoken—and the skills it looks for in contractors to meet those needs. It’s a key element of the sales and opportunity/capture planning process that occurs before responding to a bid or RFP. Good customer intelligence takes place over months and years.

This data is developed by the sales or opportunity/capture planning team, which is responsible for building a good relationship with customers and understanding their needs. A good working relationship between the proposal team and the opportunity/capture planning team is key to understanding what must be included in the proposal narrative.

The opportunity/capture planning team must develop an accurate view of customer needs and desires. The most important information is gained directly from customer contacts. Other useful sources of information include:

  • Annual reports
  • Policy documents
  • Industry publications by the customer
  • Former employees of the customer’s organization
  • Historical data on trends
  • Budget documents that indicate future priorities
  • Existing contracts and performance data (either when trying to unseat an incumbent or when trying to protect an existing contract)

Customer analysis provides a big-picture view of the market and opportunity, giving a comprehensive approach to explaining your company’s value proposition. It also helps the team understand the entire product and/or service portfolio that should be included in the bid. This strengthens the opportunity/capture plan development and proposal writing and explains how the contract will be executed upon win. This, in turn, has a large impact on the pricing strategy.

Analysis of independently verifiable customer information helps create a thorough, well-planned strategy for winning the opportunity.

In both commercial and government contracting environments, relationships with potential customers can let you influence RFP structure and content to your organization’s advantage. Your most serious competitors are doing the same, so your opportunity/capture planning team has likely started building those customer relationships far in advance.

2. Understand the importance of gathering competitive intelligence.

Competitive intelligence means objectively understanding the strengths, weaknesses, and strategies of companies competing against your company for business. Competitive intelligence is a well-defined business practice designed to understand the competitive forces and market dynamics that impact your company’s viability and long-term profitability.

Conducted within an organization, competitive intelligence serves as a catalyst in planning how to strategically win an opportunity. It is part of the value chain that converts gathered data into actionable information that results in strategy development. When gathering competitive intelligence, you should gather information about competitors’ operational environments and the target customer. You should then analyze this information and use it to stay ahead of the competition.

To gain competitive intelligence, Opportunity/Capture Managers or Bid Managers should first identify the key pieces of information required for a specific opportunity. This involves finding out who your competition will be as early as possible.

When you’re late to the game, it’s not always possible to know for certain who the competitors are. In this situation, it’s valid to make assumptions about likely or usual competitors. Then, make a plan to gather research from publicly available sources. The aim is to understand the bidder playing field and use combined insights to understand competitors’ capabilities, strengths, and weaknesses.

This activity can be a lengthy one, particularly if you’re working on an opportunity with a long lifecycle before the competition begins. However, it doesn’t have to be drawn out; it can be as short as time allows. But it must be carried out to provide the customer with a balanced and objective rationale for why they should choose you and not a competitor. Unless you’ve worked out those messages, you’ll leave the customer to draw their own conclusion, and it may not be to your benefit.

Customer analysis and competitive intelligence work together to drive the strategy. Analyzing and managing customer and competitive intelligence helps focus opportunity/capture planning and proposal writing in two critical ways:

  1. Understanding the customer’s needs and requirements guides the development and selection of solution elements and actions needed to execute a thorough win strategy.
  2. Understanding competitors’ strengths and weaknesses helps you develop strategies that magnify your company’s strengths, minimize your weaknesses, and show your company’s capabilities and proposed innovations in the most positive way.

3. Foster information sharing among all members of your extended organization.

The best sources of competitive intelligence data may be right at your fingertips. You often can find out most of what you want to know about your competitors by asking your colleagues. The challenge is figuring out who knows what, where those people can be found, and how to share that information with the writing team.

Opportunity/capture planning teams should take the time to build information networks with colleagues. Active engagement by the opportunity/capture planning team early in the development process is critical to gain important, bid-winning data about the customer and your competitors. This data helps identify your company’s biggest strengths, which you can then include in the proposal narrative.

Throughout your company are colleagues who possess knowledge that can enhance your proposal. Create channels, whether formal or informal, for obtaining information. Develop networks and tools for sharing that best suit your company and its culture.

4. Leverage public sources of customer analysis and competitive intelligence data.

Public sources of customer analysis and competitive intelligence data are numerous and include both primary and secondary research. The following table lists common data sources that may complement other sources unique to your company and industry.

DATA SOURCES CUSTOMER ANALYSIS DATA SOURCES COMPETITIVE INTELLIGENCE DATA SOURCES
Employees: colleagues, sales/marketing teams, and any other employees, regardless of their role in your company
SMEs engaged by your company
Customers’ websites
Competitors’ websites
Trade/industry association websites
Social media: Facebook, LinkedIn, Twitter, etc.
Publicly available information: government agency reports, industry/trade publications, webinars
Trade shows/conferences
Annual reports, analysts’ reports, and other SEC reports
Subscription services: OneSource, Hoovers, Dun & Bradstreet, GovWin, Gartner, PwC, etc.

Find out what sources your prospective customer uses for information and add them to your research. Ask other Opportunity/Capture Planning Managers what publications and resources they use and incorporate them into your research as appropriate.

5. Use a bidder comparison matrix to identify your key competitors’ strengths and weaknesses.

Competitive intelligence provides the data needed to drive objectivity in developing your company’s strategy and approach. All too often, companies lose perspective, especially if a contract they have held for a while comes up for rebid. Capturing a true picture of the competitive field for any proposal will add dimension to your writing. It also directs your writing to requirements from the customer’s perspective, complemented by a discussion of your company’s strengths and discriminators.

A clear picture of the customer’s needs and requirements—and your strongest competitors’ strengths and weaknesses—reveals areas on which to focus in your proposal. Use a bidder comparison matrix to analyze the competition against your position.

In the hypothetical bid shown in the following table, competitors have varying strengths and weaknesses.

COMPETENCIES/REQUIREMENTS YOUR COMPANY COMPANY A COMPANY B COMPANY C
Wind Turbine Services Yes Yes Yes Yes
Logistics Services Yes Yes No No
Gulf Coast Operations Yes No Yes Yes
Oil and Gas Industry Experience Yes Yes Yes No
Strong Company Leadership Yes Yes Yes Yes
Reputation for Product Quality Yes No Yes No
ISO Certifications Yes No Yes No
“Yes” Scores 7 4 6 3

The matrix clearly shows the strongest competitor and highlights the others’ strengths and weaknesses. This knowledge should guide the proposal writing process. Consider the following example guidance based on the information in the table:

  • From customer intelligence obtained by the opportunity/capture planning team, you know that quality of product is very important to the customer. Therefore, Company A and Company C will fall short.
    • Guidance: Write about your company’s reputation for quality and provide relevant proof points to highlight your strengths in this area (e.g., 10-year successful wind turbine services provider with customer testimonials as proof points; 30 years of oil and gas experience).
  • Company C falls short in several areas. It will need multiple teammates to bring its capabilities to the same level as your company’s, which will raise the cost of its offer.
    • Guidance: Write about your company’s full set of capabilities, providing proof points for each area of requirements. Discuss your ability to deliver all requirements more cost-effectively and without introducing unnecessary risk (i.e., without acquiring or managing  multiple teammates).
  • Company B has similar strengths to your company, but will have to find a teammate to close its logistics gap, which may add risk to its proposal.
    • Guidance: Focus the writing on all of your company’s strengths. Stress your logistics experience (e.g., 50 percent of your business is conducted in the Gulf Coast region and your logistics operations are based in Houston). Highlight the quality of your product and provide proof points (e.g., customer testimonials and your ability to deliver the full requirements of the RFP).

Common Pitfalls and Misconceptions

Belief that competitive intelligence data collection is covert activity

No one should break the law to collect competitive intelligence data. Competitive intelligence is an ethical business practice guided by written rules from the association of Strategic and Competitive Intelligence Professionals (SCIP).  The SCIP website is a wealth of competitive intelligence information and training. Most companies have their own legal guidance regarding competitive intelligence, which is often included in corporate ethics training.

Difficulty obtaining competitive intelligence data

You can find the majority of the competitive intelligence data you need among colleagues and online. Verify data you collect through group brainstorming. With so many resources readily available, it is relatively simple to find most of the data needed for an effective proposal narrative.

Proprietary company data, however, is not always available. In these cases, teams may have to derive information from available data and make assumptions.

Alternative ways to  analyze customer and competition data

There are several equally acceptable ways to score and analyze intelligence that is collected for an opportunity. The bidder comparison matrix is just one way. If time is short, teams may use ratings (e.g., High, Medium, and Low) to identify how a customer values discriminators against their issues or hot buttons. Some teams weigh the customer’s issues on a scale of 100 and then rate themselves and the competition on each issue.

A SWOT analysis is also a good way to identify the customer’s perception of your strengths and weaknesses.

STRENGTHS

Our Strengths

Potential Positive Discriminators

WEAKNESSES

Our Weaknesses

Potential Negative Discriminators

opportunities

Competitor Weaknesses

Potential Positive Discriminators

THREATS

Competitor Strengths

Potential Negative Discriminators

Figure 1. SWOT Analysis. A SWOT analysis is used to identify internal strengths and weaknesses, as well as external opportunities and threats.

Develop a SWOT using the customer’s perception of the bidders’ strengths, weaknesses, opportunities, and threats. The completed SWOT will provide a baseline from which you can develop an opportunity strategy or proposal strategy.

If your intelligence gathering clearly reveals a customer issue or hot button that no organization has a track record of delivering, mark the bidder comparison matrix or SWOT to indicate that the customer will likely perceive all competitors as equal. This is also true of “hygiene factors.” For some customer opportunities, examples are “meeting all safety regulations” or “100% compliance.” In each example, the customer expects every organization to reach the same standard; therefore, there is no difference. In this case, the best strategy is to remind the customer that all bidders are equal.

Summary

  • Use research to objectively analyze your customer’s needs for the opportunity
  • Gather competitive intelligence to understand and analyze the customer’s perception of your competitors’ strengths and weaknesses against the customer’s needs
  • This knowledge helps Proposal Writers show their company’s value proposition in the best possible light
  • Gathering competitive intelligence is an ethical activity; most sources of information are publicly and readily available
  • An important source of competitive intelligence data is information shared by colleagues. Proposal teams should work to gain information from others within their organizations
  • Organizations can use a bidder comparison matrix to showcase their own capabilities in comparison to their competitors; other acceptable ways to score and analyze intelligence include SWOT analyses and rankings

Terms to Know

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