Competitive Marketing Intelligence In A Digital, Data-based World

How might these techniques be employed in competitive digital marketing intelligence today? The uses vary from identifying the early birth signs of new products or services through to helping the business decide whether and how to change its own proposition and on to determining how to handle a challenge from new players. Many things have changed since my Xerox days, including:

- An explosion in the volume and variety of information available to buyers, sellers and distributors because of the web

- The ability of customers to find their way quickly and precisely to better products and services using the web, so that a new product or service can emerge almost without warning and succeed globally in a very short time

- The ability of companies to target precisely the customers they want to attract (and win from their competitors), using a combination of digital and database techniques.

These do not all apply equally in all markets. However, in some markets, good data exists on customers, while customer value makes it worth companies identifying particular customers or groups of customers as worth acquiring because of their value. This applies in particular to:

- Power utilities (in deregulated markets where customers have a choice of supplier)

- Financial services (particularly general/property and casualty insurance, credit cards, investment, banking)

All these are markets where customers make regular payments and where there are relatively few (ie an oligopoly) or perhaps only two (ie a duopoly) competitors in each sector or sub-sector, so that it makes sense for a company to target specifically the customers of one or more competitors. However, this can also apply to some parts of the travel and leisure market, and even the automotive market. One of the distinguishing features of some of these markets is that a consumer may only have one supplier at a time.15 In this situation, customers’ behaviour is to review prices and service experience regularly to benchmark their existing supplier, though, of course, for service experience they only have word of mouth and competitive promises to go on for competitive suppliers.

In these circumstances, competitive attacks to win away one’s best customers are normal. Thus, most companies in these markets have general defensive strategies, eg, customer retention programmes. These aim to reinforce customer loyalty, often through incentives or service benefits, to ensure that a customer that has been approached by a competitor knows where to go to solicit a better offer from the existing supplier if the competitor’s proposition proves attractive and, in some cases, to lock customers in by giving them incentives to commit to staying with the incumbent supplier. These programmes can be expensive. The retained customer’s profitability may be lower, unless the incentive to stay is low cost, for example, involving use of spare capacity.

Proactive retention work can be undertaken, involving communicating better with customers deemed most likely to be at risk, but this may also be expensive, particularly if ‘false positives’ are targeted (ie customers are deemed likely to leave, even if they have no intention of doing so). However, if this proactive approach works, it can be very profitable. One reason for this is that motivations for switching are known and therefore vulnerable customers can sometimes be identified before they switch. For example, indicators of likely switching in the broadband market include connectivity issues (picked up using line testing), direct debit cancellation, abnormally high bill amounts, accounts falling into collections or low/falling usage. digital marketing services Examples of treatments include:

- Setting up direct debits where cancelled

- Downgrading packages where customers are unable to afford payments

If vulnerable customers are subject to a focused attack, retention is harder and becomes more difficult if customers are offered a much better proposition. A competitor also has many choices as to which of your customers to target. Companies should use generalised defences but also try, using competitive intelligence, to identify specific customers or customer types that are targeted by competitors.