7 metrics to measure the impact of competitive intelligence

If we want to measure the impact of market intelligence on our business, we can start by learning how others do it.

Why measure the impact of market intelligence?

We must define and measure Key Performance Indicators (KPIs) to consolidate and improve the Market Intelligence Function in the company. But we must also use metrics so that the whole organisation knows the value that market intelligence generates, and support this key function in the company.

I remember a large LATAM oil company I was invited to visit, which was in the midst of a huge crisis. The Competitive and Technological Intelligence team had been working in an unstructured way for some time, and without measuring the impact their work was having on the corporation. When the cost-cutting fever broke out, they could not justify the impact of their work. And, incomprehensible as it may seem for such a company, they disbanded the Competitive Intelligence and Technology Watch Department for the time being.

What can't be measured doesn't exist, and what doesn't exist shouldn't receive investment, right?

10 indicators of the impact of Market Intelligence used by companies

According to the results of a SCIP survey of a thousand companies in the US, 81% of companies have or are developing KPIs for the Market Intelligence Function.

The list of indicators most frequently referred to by companies combines both quantitative and qualitative indicators. Let's review these indicators one by one and build a critique:

#1. The sales results to which the Intelligence Function has contributed.

This indicator is not only obvious, but it is logical that it is in the first place: Strengthening sales is one of the main benefits of a Competitive Intelligence system, as we saw in Benefits of Competitive intelligence for the company.

But as a reader, the difficulty of obtaining reliable information in a simple way for this metric will not escape you. We will have to consult the sales team, and rely not only on their memory but also on their willingness to lend us some of their time on a recurring basis to discuss this point.

#2. Qualitative feedback, through surveys or individually.

This is the typical indicator equivalent to "corridor feedback". We can develop interviews with key personnel, or extended Net Promoter Score type surveys depending on our needs.

Again, it is an indicator dependent on personal positions and subjectivities.

#3. Consumption figures of Competitive Intelligence deliverables and relevance for the user.

The consumption figures of the Intelligence Function information are objective data, and we can easily obtain them if our Competitive Intelligence software provides us with this information.

#4. Market share or related metrics, such as brand awareness versus competitors.

Market share or brand awareness penetration, among others, is very important data for the company (as is sales performance) and may be correlated with the quality of the Intelligence Function. But it is difficult to justify a causality between the intelligence information handled, its exploitation, and market share. Correlation and causation are different things, as we saw in North by Northwest: Big Data epidemic and analysis mortality.

#5. Customer retention or customer satisfaction/net promoter score (NPS).

As with the previous indicator, customer retention is not directly connected to the quality of the Intelligence Function, and we can hardly measure the quality of our work through customer retention.

#6. Accuracy of intelligence and prediction of competitors' movements.

This indicator will only apply if we make predictions about the future. Keep in mind that the Intelligence Function may or may not try to guess the future: competitors' strategy, market trends, rise or fall of raw materials, legislative changes, etc. If our Intelligence Function is assigned this task, we will be able to compare our forecasts with reality after a few months.

However, it will not be easy to convert the degree of accuracy into a numerical indicator by aggregating deviations in the forecasts: the most important elements will have to be weighted, and this weighting will have to be agreed by consensus.

#7. Winning rate or ratio of sales won, or win rate of the competition specifically.

Market intelligence information has a direct impact on the win rate, either through a better knowledge of the competitor's portfolio, its strategy, or the interests of the specific customer or buyer-persona. However, good performance in this area cannot be attributed exclusively to the Intelligence Function, and care must be taken when attempting to correlate the two. This information is not as directly applicable to Intelligence Function improvement as indicator #1.

#8. The number of decisions influenced by market intelligence, and how competitive information drives company strategies.

When the C-level or managerial level of the firm consumes good intelligence information at the strategic and forward-looking horizons, decisions about strategies are better informed and more robust.

Again, we will have to figure out how to convert this information into a numerical indicator, and we may face the same difficulty as with indicator #2 above.

#9. The number of results and/or requests, showing the desire for more Competitive Intelligence. Effectiveness in executing these requests.

This indicator is closely related - and overlapping - with indicator #3, which measures the degree of consumption of intelligence information. This adds the degree of effectiveness, but we will also have to convert it into a numerical indicator: will we measure internal customer satisfaction? speed of response? both?

#10. Awareness/understanding of changes in the market landscape.

Again we have a totally subjective metric, which will be fed by the opinions of the internal users of the Intelligence Function. We will need to create a method for interviewing or surveying users, offering a range of ratings for each of the possible questions.

3 criteria for defining KPIs for the Market Intelligence Function according to Antara

After analysing the indicators commonly used by the companies surveyed by SCIP, one is left with the impression that they are not easily designed and implemented. There are two risks in trying to implement them:

• Investing a lot of time in designing and capturing indicator information. If the design is not stable over time, we will not be able to generate information on the evolution of the Competitive Intelligence system.
• Obtain very subjective information, dependent on external factors such as the culture of the organisation, work environment, etc., and therefore it is not reliable information.

From our point of view, indicators should be easy to obtain, reliable, and useful to improve the market monitoring process:

• Indicators easy to obtain.

The cost of obtaining the data must be very small compared to the benefits to be obtained. Keep in mind that it will be a repetitive cost, and the indicators should be consulted often. If you already know Antara Mussol, you know that it offers operating statistics that can be configured in many different ways.

• Indicators must be reliable

Some of the qualitative indicators, like the ones we have seen above, have the disadvantage of subjectivity. If the statistical sample of our survey is small, we will get variations that won't really mean anything.

• Really Useful KPIs for Intelligence Function Improvement

For indicators to be useful, let's first set the long-term improvement factors, and then discuss how to measure the necessary data.

By applying this classification of indicators, we can generate metrics in the most efficient way. For example, if we apply this approach to the above survey indicators, we could conclude this table:

Conclusion

It is essential to measure the performance of the Intelligence Function in the company in order to improve it. That is why 8 out of 10 companies have indicators of one kind or another.

However, the Intelligence Function scorecard needs to be easy to implement and as objective as possible, so we must carefully select the indicators on which we will base our continuous improvement. If feeding the indicators is too costly, we will end up redesigning our scorecard to a simpler one, and we will not be able to analyse our evolution over time.

So, what are the indicators that Antara would propose to start measuring the impact of the Intelligence Function in the company? ... We will propose them in this article, and we will also discuss them in a specific webinar (conducted in Spanish), to which we invite you now.

Credits: Photo by William Warby on Unsplash

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The opinions of the authors reflect their own views and not those of the company.