If a business wants to maintain any sort of competitive advantage, having a competitive intelligence (CI) function is crucial. But how are businesses doing CI today? How much are they investing, and how much impact (if any) is it having on revenue?
In the 2020 State of Competitive Intelligence Report, we explored these key questions to understand what kinds of investments CI is getting and if those investments have any impact on revenue.
If your CI program is in its infancy, it can be rather difficult to understand how much to invest and what results to expect. If your CI program is well along, then you can benchmark yourself against your peers to see how you compare in terms of investment and revenue impact.
How are businesses investing in CI today?
The two key areas where businesses are investing in CI is dedicated headcount and budget.
One major takeaway from the 2020 State of CI Report is that competitive intelligence teams are growing. As of 2020, 57% of businesses have teams of at least two or more dedicated CI professionals, compared to 37% of businesses only two years ago. That’s approximately 54% growth in two years, and there are no signs of that trend slowing down.
The lower numbers of dedicated headcount (less than 2 people) are also rapidly decreasing year over year, with just 6% of businesses having no one dedicated to CI compared to 11% last year—a 45% decrease.
Another key investment area after headcount is budget—how much cash are businesses allocating to the CI function? Keep in mind that we are excluding headcount when we refer to budget—we are more so referring to tools, consulting, data, and other resources.
Similar to the headcount trend, budgets are also on the rise—50% of businesses are spending more than $25,000 per year on CI, with 28% spending more than $100,000 annually. 12% of businesses are still taking the lean approach to CI with zero budget allocated.
Unsurprisingly, budgets also vary by the size of the business. Nearly 60% of large enterprises have CI budgets upward of $100,000, while less than half of small businesses have budgets nearing the $25,000 mark.
So does CI impact revenue?
The research from the 2020 State of CI Report is clear—CI is a function that undoubtedly impacts revenue.
To break down how CI impacts revenue, let’s look at the overall impact CI is having on businesses’ revenue, and then what investments lead to that impact.
How much is CI impacting revenue?
52% of businesses have seen an increase in revenue as a result of CI, up from 48% the previous year. The trends are fairly even across company size as well, with small businesses and large enterprises both reporting revenue impact.
What factors lead to revenue impact?
For this report, we set out to find which factors influence whether or not a company sees revenue increases as a result of CI efforts. It turns out that there are many factors that can lead to that success, however we found two key investment areas that stood out as having significant revenue impact—resources allocated and foundational program efforts.
Resources boiled down to dedicated CI headcount and budget. Unsurprisingly, businesses that allocated more people, budget, and time were more likely to report revenue increases than those that invested less in those areas.
But it’s not all about the money or the people—a key factor in CI having revenue impact is the foundational efforts put into the CI program. Specifically, defining Key Performance Indicators (KPIs) and distributing intelligence to the proper channels played the biggest role in whether or not CI impacted revenue.
74% of businesses that have defined KPIs reported an increase in revenue as a result of CI. Whether the business used quantitative measures, qualitative measures, or both, having any KPIs correlated with a higher likelihood of revenue impact.
Distribution of intelligence across a variety of channels also plays a key factor in whether or not CI impacts revenue. After all, getting intel into the hands of stakeholders is critical in making sure the whole business can take advantage of that important CI work.
Businesses that communicated CI on any channel were 68% more likely to report revenue increases than those who did not use any channels at all—solidifying that distributing intelligence is crucial to CI success.
The type of communication channel seems to matter as well, with sales enablement platform, CRM, and CI platform being the most impactful modes of communication. This shouldn’t come as a surprise, as any businesses that are investing in these types of tools are more likely to invest in CI as an overall program.
The Virtuous Cycle: Investment Leads to Revenue, Revenue Leads to Investment
So what can we say about the impact CI is having on businesses?
Businesses that build a strong foundation for their CI programs are rewarded in terms of revenue impact. However, as CI headcount and budget increase, so does the likelihood of impacting revenue. And when CI programs impact revenue, businesses are in turn more likely to invest in CI in the form of increased budgets and headcount, giving way to the virtuous cycle.
Take a look at these stats—businesses that reported revenue increases as a result of CI were 63% more likely to increase CI headcount and 66% more likely to increase CI budget this year. This is the virtuous cycle in action.
What are your plans for CI investment this year? Check out The 2020 State of Competitive Intelligence Report to benchmark your CI program.
Topics: Competitive Intelligence