How can you gather information intelligence about competitors in a way that’s legitimate and that doesn’t get you or anyone else into difficulty? I’m Mike Sandman and I’m going to be talking about the basic rules of staying out of trouble while you’re getting useful business intelligence.
Do What’s Legal, Ethical, and Comfortable
The basic rule is to do not just what’s legal or not just what’s ethical, but what’s legal and ethical and what you are comfortable with. We call that area the green zone, you want to stay within that boundary. So lots of times, people say well something’s legal why can’t I do it, it must be ethical. Not necessarily, and similarly things that are ethical are not necessarily legal. I’m going to give you perhaps an extreme example to make the point: adultery is legal in most jurisdictions, but certainly I don’t think any of us would say it’s ethical. Are people comfortable with it? Well some people are and some people are not. But we’re looking for things that have a green thumbs up all the way across. So let’s look at another situation: going 5 miles per hour over the speed limit is not legal. Is it ethical? I don’t know, but I’m afraid I break down all the time, so very clearly I’m comfortable with it. Calling up a competitor and lying in order to get information under some circumstances is not illegal. If it was illegal to lie, most of us would have served time. But it’s not ethical to do that, and again there are people who are comfortable but we don’t want you to be one of those people. Calling somebody and not lying to get information is perfectly legal and it is ethical, as long as you identify yourself and explain that you’re looking for information about the business or about the marketplace. You don’t have to say that you’re thinking about competing in their marketplace, but you should be comfortable doing that and if you’re not don’t do it.
It’s Not Hard to Be Ethical
Stick with public sources and with talking to people who are not direct competitors. And finally mystery shopping is something that’s been practiced for years and years in the retail industry. It’s certainly legal, it’s considered to be ethical in some businesses and not in others, and you have to know the industry in order to decide whether or not you’re willing to do that. Learn by using the intelligence you can gather from inside the green zone. Use online resources: Google, company websites, public documents, social networking sites, look at public records, building permits, building plans, tax records. Observe, look at the businesses already in your intended market, see what they do and learn from them. Look at their mistakes and look at their successes. And talk to people – customers and suppliers, economic development officers, trade associations, chambers of commerce, competitors outside your immediate geographic area, and if you’re comfortable doing it, competitors that you’ll be facing, as long as you don’t try to deceive them. And then when you’re all done with it, build an analysis for your market that goes back to the five forces model developed by Michael Porter. Develop a strategy for success based on your own goals, your own capabilities, and your own assumptions about the market, and on what you’ve learned from the competition.