Competitive intelligence (CI) is gathering information from people or companies who you view as a competitor in your marketplace in order to make educated and strategic business decisions that will allow you to achieve your organization's goals. It seems as though it would be common sense to use CI as a tool for growth within any company, right?
According to an article in the Harvard Business Review, 55% of companies find that their tenured expertise influences business decisions more so than the competitive intelligence that is gathered from their marketplace. What is interesting about this is that the same article also states that “most corporations world-wide have adopted competitive intelligence as a way to expedite good decisions.” Why, if most companies are adopting competitive intelligence, are 55% of these same companies not using the intelligence to make decisions? Perhaps it’s because it’s a generational way of thinking that experience trumps research, or corporate hierarchy affects how decisions are made, or it’s because these companies simply do not know what to do with the intelligence once it is acquired.
Most banks and credit unions are predominantly customer-facing. Every day banks and credit unions have customers coming in to deposit money, inquiring about loans, asking about refinancing, or wondering how to open up a new account. Through these encounters, financial institutions acquire information first-hand about their customer’s past banking experience. This information can be used and filtered up to upper management. Now, upper management is probably already purchasing rate information for their marketplace, as well as, gathering competitive information on financial institutions similar in size to them nationwide. Management might even have a team who mystery shops and gathers market data. So, the financial institution has information from its customers, some local market data, and some data from similar sized institutions across the county. Now what? The financial institution has the competitive data. But where does the benefit of having competitive intelligence come into play, the hard part—using the information to make educated and strategic business decisions.
This is what is missing and where institutions are putting themselves in a disadvantage. They’ve researched, acquired, or purchased competitive information, but are not taking action steps to use the information in the best way possible. Banks and credit unions may need help to bridge the gap in using the collected market data to implement strategic business initiatives. It’s not easy to analyze every product and service your company offers in comparison to your competitors and then to devise 10, 50, or 100 new business recommendations. It takes a lot of time and a lot of man-power, which quite frankly, a lot of organizations aren’t able to allocate. However, the shift in corporate mentality regarding CI is changing as more and more companies begin to view CI as an advantage to making business decisions and are willing to allocate resources to the complete process.
So, the next time you review your competitive data take the time and resources to create actionable intelligence. As companies continue to rely more heavily on competitive intelligence and acknowledge its advantage, they too will be able to join you on your joy ride of success.