Ten years ago, Logicalis, a systems integrator, would have needed a wiretap to overhear the grumblings of a competitor's dissatisfied customer or prospect. But when a Logicalis sales representative stumbled across a LinkedIn status update revealing an individual's frustration with a rival company's cloud service, he knew just what to do.
"The person was complaining because a cloud services provider had contacted them and asked them to invest in a cloud solution," recalls Lisa Dreher, vice president of marketing at Logicalis, in Farmington Hills, Mich. However, when the person discovered that the vendor actually wasn't able to offer the right solution, he turned to LinkedIn to voice his "frustration," which, according to Dreher, "was a good thing because we actually had the cloud solution they needed. So our sales rep was able to say, 'We can help you with that.'" In the end, Logicalis sold the individual its own cloud service.
For several years now, companies have been using tools such as HootSuite and Radian 6 to monitor what people say about them in social media. The new twist is that more and more companies are tapping the social media stream to learn highly valuable information about rival businesses, says Richard Plansky, senior managing director at Kroll, a New York-based risk consulting company that offers corporate intelligence programs.
"Social media moves a large portion of what used to be private information into the public sphere," says Plansky. "And that makes it much easier to gather information about companies' activities that we used to need surveillance to learn. Now we can do it from our desktops."
Product specifications, product testing, promotional offers, financial data, recruitment efforts, layoffs, industry demographics, customer satisfaction levels are just some of the details that can be gleaned from Facebook profiles, Twitter feeds and blog postings.
"A lot of the data is innocuous in little chunks but when combined with lots of other teeny, tiny pieces of information it gives you a real big window into a company," says Shane MacDougall, a partner at Tactical Intelligence, a Canadian consultancy.
But social media-engaged employees aren't the only ones spilling secrets. "Lots of companies are very worried about what their employees are leaking, but we invariably find out that some of the most critical information that's being leaked is by the companies themselves in the form of sales documents, conference presentations and improperly secured data on a company's own website," warns MacDougall.
Take, for example, a startup CEO who posted a question on Quora, a collaborative question-and-answer site, regarding a rival's revenue model. The CEO, who asked to remain anonymous, wanted to know how one of his key competitors makes money, after failing to find that information online. Within days, "the head of business development at the company actually answered my question -- not knowing that I was a competitor," marvels the startup's CEO.
When not posting questions on Quora, the young CEO also engages his competitors' customers on Twitter. "I always try to smarten the conversation by asking a rival company's customer, 'Why don't you like the product? What do you like about it?' It's a little like customer research but I consider it competitive intelligence because you'll never learn more about your competitors than through their customers."
Loose lips may sink ships but details are meaningless if a company doesn't know how to sort through them strategically.
"Competitive intelligence is not just about collecting data," advises Leonard Fuld, founder of Fuld and Co., a Cambridge, Mass.-based competitive intelligence consultancy. "At the end of the day, it's really about good analysis that draws you to a very singular, unique or eye-popping solution that will allow you to make a decision a little faster and a little better than your competition."
Plansky agrees. "There's more to competitive intelligence than just looking up a Twitter account or googling somebody's name. The trick is having the investigative training and instincts to understand how to follow the right threads all the way through."
For this reason, Plansky recommends turning to a third-party service with professionals who are highly trained at gathering data, using monitoring technology and drawing actionable insights from all sorts of information and sources.
That's why Dreher retained online research firm Webbed Marketing to identify, investigate and analyze the company's competitors. Although Logicalis doesn't have an official competitive intelligence program in place, Dreher says: "You need somebody that can consolidate the information you're collecting in a summary format. If there are bits and pieces all over the place, you'll never get to a consolidated format where people can actually gain knowledge from the information you collect."
For businesses that prefer a do-it-yourself approach to competitive intelligence, there are more than 200 social media monitoring tools promising to flag online conversations about you and your competitors. Radian 6, for instance, tracks mentions on more than 100 million social media sites, letting users react in real-time to everything from competitors' product launches to customer criticism. Another popular monitoring solution is Lithium, which helps companies find online mentions and posts with strong emotions. Users can benchmark these results against those of its competitors. The prices of these tools range from free to hundreds of dollars per month for a subscription.
Too Much of a Good Thing
Whether a company opts for a veteran consulting company such as Kroll or a free monitoring solution such as Google Alerts, the hardest part about mining social networks is avoiding information overload.
"The challenge now is not about finding information," warns Plansky. "The challenge now is that there's too much information. The trick is to separate the wheat from the chaff."
To avoid data deluge, Dreher says it's critical that companies determine ahead of time what information they wish to gather and how they plan to apply this knowledge. "You have to decide what are the key things that you really want to know about your competitors and what things you're not going to watch right now."
Rather than roll out a comprehensive competitive intelligence program, Dreher says Logicalis simply calls on Webbed Marketing to collect information at critical times. For example, when Logicalis recently expanded into the cloud computing market, the company began tracking customer responses to its competitors' cloud offerings and product features through social media channels.
Ethical dilemmas can arise from gathering competitive intelligence via social media. In some cases, the line between a competitive spirit and outright espionage is clear-cut. "Creating a fake Facebook account and friending a competitor is completely and utterly unethical," says Plansky. In other situations, the line can be a bit blurry. For example, is it wrong to troll a competitor's Twitter feed in order to poach dissatisfied customers?
"When somebody is feeding the marketplace with Twitter streams and with information on LinkedIn," says Fuld, "what's wrong with checking on that information?"