When Jay Bloom leaves a trade show, his pockets are stuffed with his competitors' brochures. When he reads trade journals, he scans the pages for new products, promotions and other changes at rival firms. A clipping service sends more articles containing selected key words. If the customers who call his service center mention competitors, he asks for details. Partners and investors provide gossip about rivals. Employees patronize competitors to investigate others' offers and service from a customer's angle.
Bloom is no spy, merely a practitioner of competitive intelligence, or CI. Keeping tabs on the competitive environment helps the 32-year-old founder of Pet Assure Inc., a provider of prepaid pet health plans in Dover, New Jersey, with everything from marketing to acquisitions, explains Bloom.
"We want to know what our competitors are doing, what their products are like and what their offers are," says Bloom. That sounds sensible, but annual surveys by The Futures Group, a Hartford, Connecticut, CI consulting firm, find that only about 60 percent of respondents have organized CI operations, and those are mostly large companies.
Small companies have a tendency to ignore competitive intelligence, says John McGonagle, managing partner of the Helicon Group, a CI consulting firm in Blandon, Pennsylvania. Entrepreneurs are often strapped for time, of course, but arrogance also plays a role. "Entrepreneurs tend to think they know all about their competitive environment," McGonagle says. "They think they're on top of things, but they aren't."
If you think you're on top of things, you may be--or you may not be. To help you make the call, Entrepreneur examined Pet Assure's CI activities and added McGonagle's expert commentary for a case study on what it really means to know who your competition is. The results reveal what one successful entrepreneur does right when it comes to competitive intelligence, how he could do better, and what other entrepreneurs can learn from his experiences.
Mark Henricks is Entrepreneur's "Cutting Edge" columnist.