The Secret to Outpacing Your Rival? Competitive Insights.
Entrepreneurs live to innovate and to stay a step ahead. Here's how to use data to keep competitors in your rearview mirror and make it happen.
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When United Airlines announced that early this year it would start offering a "basic economy" class (Delta and American have made similar announcements), the option was an obvious attempt to tap into a different market: budget airline passengers.
The deal? In exchange for low-cost fares, the carrier asks customers to give up frills such as pre-select seating and carry-on items other than a purse or a bag.
Related: 10 Ways Competition Helps You Win in Business
Only time will tell if the budget-friendly ticket option provides United some much-needed growth by allowing it to successfully compete with discount airlines. The worst-case scenario: The option might cannibalize United's own higher-priced fares.
And then, of course, the option could come across as just another bid to nickel-and-dime passengers for "standard" amenities -- but that's a story for a different day.
The message for entrepreneurs in United's move for entrepreneurs is this: We're here to innovate, and the only way to do this is to let competitors push us. The overall message? Free-market economies prosper only because survival of the fittest brings out the best in all of us.
In short, using the competition's moves to drive your own innovation is a lot different from reacting to what the opposition does. After all, winners set the pace -- not the other way around, as with United's reactive new fare class. If you want to stay ahead, it's all about keeping the competition in your rearview mirror.
A lot thrown at you
Most entrepreneurs are drowning in information, and monitoring what's going on is easier said than done. Until recently, getting information on competitors could be a huge pain, especially for marketing and product teams, who did all the heavy lifting. Now, you can access online tools to help distinguish the signal from the noise.
Next, once you have the information and the data you need, trying to glean insights from it can be intimidating. Many companies take quarterly deep dives, but that's three months of information to sift through. Wouldn't a better solution be to keep your finger on the pulse with daily tidbits of competitive intelligence?
You know the comings and goings of your industry colleagues. You notice when they veer off the road, stop for gas or blow a tire, and at those points you can learn from their escapades -- without ever feeling the need to react to their every move.
It's competitive insights like those that will provide you the opportunity to outpace the competition.
Related: 3 Enterprise Business Intelligence Trends That Can Benefit Your Business
Take it in -- then dish it out.
Research by Boston University's Computer Information Services (CIS) program found that 54 percent of professionals surveyed felt their companies would be more competitive if they used analytics to make decisions. But insights on your competition will do you no good until you know how to use them. The following is often a good place to start:
2. Follow other flight patterns. Boston University's CIS study reported that business intelligence practices sparked worldwide revenue of $13.1 billion. Clearly, your competition is keeping tabs on you, so don't get so caught up in running your business that you forget to learn from them.
Maidenform, a women's intimate apparel company, invested in business intelligence in 2012 to set up the database management system SAP HANA in 2013. According to CIO Bob Russo, the company sought information visibility, efficiency and omnichannel access to support employees looking to stay informed while on the go.
Gathering intelligence doesn't always have to be about "reinventing the wheel." Instead, see it as a way to improve on your current product and take it somewhere elsewhere in the future.
3. Stay open to alternate routes.
As a tech entrepreneur, I'm not worried about death from above. It's when it comes from below that I get scared, and your company could get there quickly if you're not careful.
An example? Spoke owned its market until LinkedIn made its presence known; MySpace was the belle of the social media ball until Facebook came and ate its lunch.
So, no matter how fat, dumb and happy you are with your product, you always have to be ready for when your competition strikes. If you see an opening a competitor might take, beat 'em to the punch.
Another example? In an effort to compete with rival Airbus Group SE, Boeing Co. wants to increase the productivity of its jet plants. To do this, the company plans to cut 4,500 jobs by June to solidify its position as a low-price option for airlines.
Airbus, in turn, will debut its A330neo, a "new engine option," and also upgrade its A330 model. The neo is Airbus's cost-efficient response to Boeing's Dreamliner, which the company hopes to roll out by early 2018.
So, do like Airbus: Use the competition's moves to fuel your own fire and fight complacency, even if you're winning in your space. That will keep people choosing your business over the rest.