Software companies still fail to tap into top benefits from market and competitive intelligence programs

 

 

MI Programs for Software Industry Distinct from MI Programs for Other Industries

Implementations of market and competitive intelligence for software companies are quite different from the corresponding programs in other industries.  For one thing, the software industry is very fast-paced and does not have the luxury of lengthy timeframes for building complex market intelligence processes of the sort that are usually promoted for other industries.  MI for the software industry must be agile and frequent. It requires not only 360° experience in software from the technical to sales & marketing, but also requires a distinctive creative streak and the ability to view things “differently”. 

 

Through a program of deep research and analysis, filtered by subject matter expertise, a top notch Market Intelligence program can bring significant value to a software company. Essential attributes include qualitative and intuitive insight, and a fearlessness to look beyond the obvious to connect the unexpected dots. A channeled passion for software technology drives many right-on-target projects and initiatives.

 

To build innovative competitive recommendations, market intelligence has to question other people’s assumptions about the industry, even if those people are prominent in the company. The incumbent company consensus view should not be taken at face value by the market intelligence professional.  Instead, the MI program should examine such strategic assumptions, and then should be able to provide the data to support either the incumbent view or to delineate a different direction, or even a hybrid alternative.

 

MI makes a significant difference for the competitiveness of software companies: 

· New opportunities – identify new trends that will matter to target markets and customers; how to get there before the competition (whenever possible)

· Early warning of industry and/or competitor changes – take advantage of opportunities and leverage/deal with threats and risk

· Enhanced customer interaction – understand customer POV, goals, needs, strategic direction

· Stronger target market selection & positioning – research, validate go-to-market and positioning; locate under-served markets for target customers and solution space; guide how to articulate positioning well for customers, analysts, industry

· Strategic view of competitive landscape – figure out true differentiation, figure out where competitors are not operating; understand the issues that matter to customers and the solutions they seek from competitors

· Comprehensive development of MI deliverables – publish to multiple parties; consolidate cross-functional needs to produce more; ensure top quality and relevance

 

Where Software Companies Take Wrong Turns with MI/CI Programs

Many software companies continue to think of market and competitive intelligence as tactical methods to attack competitors, to convince a customer not to buy from a competitor, instead of: developing their own strategic solution offerings, building strategic relationships with customers, and understanding how to help customers really solve their problems and support their business initiatives with reliable solutions.

 

Competitive Intelligence programs are frequently tightly aligned with Sales groups. Sales Management often demands that MI teams focus on “feature-function” product comparisons with competitors, harkening back to old school sales techniques that focused only on “my product is better than the other guy’s product”. Today’s software target markets are for the most part commoditized, so feature/function comparisons don’t win business.  Commoditization also makes impossible the old school notions of “silver bullets” and “setting landmines” for competitors.  Even years ago, such tactics were usually a waste of time for many customer engagements.

 

However feature-function analyses do have value when they belong to product management groups, and are done to understand how a company’s solutions measure up against competitor offerings, and how all solutions measure up to meet expectations of target markets and customers.  These analyses are to be used internally by the products teams to improve their company solutions and go-to-market strategies.  To maintain credibility and thoroughness, such feature-function analyses are best done by third-party firms. 

  

Sales teams can be tempted to use feature-function comparisons to competitors as “customer leave-behinds”.  Feature-function analyses should never be handed out to customers for a number of reasons: 

· Introducing details that have nothing to do with customer needs and therefore detouring focused conversations with customers

· “One-size-fits-all” customer “leave-behinds” are weak tools when it comes to engaging customers

· Aiding competitors in winning the business by pointing out what they do better

· Opening the door for potential litigation from either the customer or competitors

 

Market and competitive intelligence is best used by sales teams to understand proactive strategic solution positioning that is stronger and more likely to connect to the customer’s mindset and desires. It can be used to prepare solid refutations of competitor objections.  The inclusion of competitive intelligence in a sales plan should be early in the strategic planning.

 

Tactical demands can overwhelm opportunities for delivering strategic insight.

Market Intelligence teams in many software companies walk a tightrope between the overwhelming number of daily requests (many of which have to be fulfilled within 24-48 hours), and more strategic research/analysis. Market Intelligence teams deserve more time to deliver the “wow factor” to corporate strategies derived from deeper insight about the intelligence that affects the business. Most MI professionals constantly “battle” to extract themselves from “today” research, to be able to dig deeper into future trends and customer desires, to help predict where the company should seed innovation and find new markets.

 

Additionally, MI/CI teams in many software companies frequently consist of a single person who is required to support several teams with disparate needs. The result is that a valuable strategic resource is spread too thin.  On a daily basis there are too many “fire-fighting” requests instead of large blocks of time dedicated to strategic and market-driven work.  Granted that a certain number of tactical projects are needed to bring reality into the MI program; but very quickly the program must shift a majority of effort to the strategic, especially if there is only one MI professional.

 

Projects for Market Intelligence programs should be handled like good software requirements management:  weigh each request and corresponding benefit against the strategic goals of the company, the likelihood of success, the sustainability of each project for long-term gains.  Give the MI team the authority to say “no”, and don’t put the team in the position of having to accept every tactical request.   

 

More Effective Positioning of Market Intelligence

For a software company to derive full value from a market and competitive intelligence program, it has to start with the executive level making a strong commitment to the program.  Many software industry MI programs fall short because the executive level does not position the MI program as a key stakeholder in strategic decision-making processes, nor does the executive include the MI professional in key meetings. 

 

It would be greatly beneficial if executives would direct more attention to the MI work accomplished for strategic decision-making, even when the recommendations make them uncomfortable.  This is particularly relevant in the software industry where far too many companies set “me too” goals, chasing what competitors have already done, instead of finding the more innovative path.

 

The power of a market intelligence professional lies in advanced expertise, both for subject matter and for effective implementations of market and competitive intelligence programs.  Impactful insight and perspective that bring competitive advantage to an enterprise are best achieved when the MI program approximates an “entrepreneurial” center, where innovative thinking sets the tone.  Frequently, each problem or situation requiring market intelligence is different from previous problems and usually requires a whole new solution and form of deliverable to be effective, relevant and timely.

 

While directly benefiting multiple teams in different ways, all strategic work done by the Market Intelligence team will ultimately benefit sales teams and successful deals:

· Product Management – Enable market-driven solution decisions, identify opportunities and threats, better understand target markets and customers,

· Product Marketing – Contribute to positioning, review messaging in marketing materials, generation of competitive studies, overcoming objections, make sure the actual technology maps to planned solutions

· Senior Management -  Trends, strategic views of competitors, decision-making support

· Sales – Competitiveness as a strategic process rather than a reactive one-off

 

Intrinsic Value of Market Intelligence for the Software Industry

Market Intelligence for the software industry has a unique value that might even be called Solutions Intelligence.  Market Intelligence has a significant role for go-to-market plans and sales models.  For software companies, Market Intelligence is an important conduit for deep understanding of market-driven and customer-centric orientations that are essential for competitive advantage and sustainability.

 

What it all boils down to is this: will your software company be able to efficiently, quickly and completely understand market opportunities or threats, and then react effectively to create maximum business impact?  Then empower your market intelligence professional to do the right kind of timely and strategic work that makes a big difference.

 

 

 

About the author: Julie Hunt is an accomplished market intelligence analyst, providing strategic market and competitive insights for the software industry. Her 20+ years as a software professional range from the very technical side  to customer-centric work in solutions consulting, sales and marketing.  Julie shares her takes on the software industry via her blog Highly Competitive and on Twitter: @juliebhunt   For more information: Julie Hunt Consulting – Market & Competitive Intelligence Services  

Comments

[Dave Manzer]

Great analysis of a little understood topic in the SMB space. As evidenced by the lack of good DI products for SMBs, so many companies don't understand the need to bring data from multiple sources to analyze their results and make better decisions.