The vast majority of your marketing data, whether from purchases or surveys, tells you about your business customers’ past behaviors. But the past is over. Your job as a manager is to know what your customers will do next month or next year. Who has data about the future?
Your salespeople, that’s who.
The sales force has abundant information about the initiatives and products that your competitors are planning and, therefore, the kinds of choices that your customers will be facing in the near future. That competitive intelligence can not only help individual salespeople become more effective, it can also help your company make better strategic decisions.
But research I conducted with Douglas E. Hughes of Michigan State University and Adam Rapp of the University of Alabama shows that in the wrong hands, competitive intelligence can have a negative impact on sales and market share. So if you acquire information from customers, you’d better use it well, or it may hinder, rather than help, your sales efforts.
My colleagues and I have seen numerous examples of sales forces gaining important competitive knowledge. In one case, the salespeople for a consumer-goods company got a good look at a newly designed soft-drink bottle that a competitor was planning to introduce. In other cases, sales reps found out about competitors’ plans to introduce new types of cooking oil and mayonnaise before the products went to market. In each instance, the companies were able to act quickly on the information to introduce their own products and avoid losing weeks’ worth of sales.
Business customers are the source of this kind of information. They hear from manufacturers’ reps not only about new forms of packaging and new products, but also about such things as planned pricing, discount policies, and marketing initiatives. They release this well-guarded information judiciously, however. The reps who are most likely to receive it are those who have formed strong customer relationships and engage in customer-oriented extra-role behaviors.
Being customer-oriented means focusing on long-term customer satisfaction and placing the customer’s needs first while actively endeavoring to develop solutions that enable the customer to reach its goals. That might mean, for example, assisting a customer in its negotiations with another supplier, if that kind of help is requested. Engaging in extra-role behaviors means going above and beyond to help the customer.
It’s easy to see how in the context of this type of high-trust relationship, a customer would be willing to divulge proprietary information picked up from another supplier’s rep. But that’s not to say customers release information just to be nice. They provide knowledge in the expectation of some sort of benefit. They might expect the salesperson who receives it to offer better terms, for example, or to provide greater levels of effort and commitment.
That’s why the salesperson’s response to the information is critically important. Our research has found that reps who are able to make the best use of competitive information are those who are highly adaptive — that is, they’re able to interpret the information and adjust their selling approach accordingly.
The flip side is that salespeople with low adaptability run into trouble when they acquire competitive information. They fail to respond to the intelligence gleaned from the customer, either because they don’t care enough to use it or they’re unable to. When low-adaptive sellers fail to use customer-supplied information to more strongly position a product to meet the customer’s needs, the customer gets a negative impression of the company’s products.
Salespeople who make use of customer information for the customer’s sake tend to be more successful in selling, and they get more information. Those who don’t make good use of it find that their sources dry up. Customers ask themselves, “Why should I share any more information with that rep?”
The strategic value of competitive intelligence can be far-reaching. But we all know that information doesn’t always flow freely between sales reps and the rest of the company. To open up that flow, encourage salespeople to participate in the decision-making process. That will help the reps see the importance of the information they glean from customers. Your marketing people may be surprised at just how much the sales force knows about competitors’ prices and discount policies, as well as about the concerns your customers are voicing about your and competitors’ products.
Companies with poor information about competitors are stuck being reactive, lurching from defensive tactic to defensive tactic as new products appear, seemingly out of nowhere. Cultivating a rich source of intelligence on competitors’ projects and products, as well as any new market segments they’re targeting, gives you time to be strategic in your responses.