ROI for Competitive Intelligence?

June 14, 2006 · · Posted by Jordan Frank

Corporate blogging is one form of synthesizing and distributing information, and it has its own return (see ROI for Corporate Blogging?). Competitive intelligence (CI) and market research functions face a similar challenge: How do you value distribution and synthesis of information?

Some very good answers can be found in the Competitive Intelligence Foundation's State of the Art: Competitive Intelligence report for 2005 to 2006.

The report is loaded with great insight derived from over 500 survey participants representing companies across an even size range from less than $10M in revenues to over $1B.

With respect to measurement of their value, only 13.8% suggest they use explicit ROI calculations. The leading measure, at 57.9%, was customer satisfaction.

Where in ROI for Corporate Blogging?, I suggested an equation leading to hard numbers for the ROI of Charlene Li's blog, I think the calculation here is more simple:

If Customer Satisfaction and Perception of CI Value greater than Cost to maintain CI function then Retain and consider growing the CI Function.

In spring 2004, I started working with a Global 10 customer. Six sigma processes were ingrained into their culture. When my new customer asked for tips on how to apply six sigma to her CI process, I was somewhat stunned. Six sigma is about reducing defect rate in manufactured widgets. How could it apply to a competitive intelligence process?

With a product manager hat on I realized that the CI process results an an information product. The product is consumed by internal customers including sales people, product managers, and executives. Six sigma is about measuring and decreasing the defect rate.

So I came to the same conclusion that 57.9% of CI managers came to: measures of customer satisfaction provide a perfect value metric and, based on the feedback, leads to a clear understanding of and process to reduce the "defect rate" in the information and analysis produced by the CI effort.

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