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Securing your company against the competition.

A few years ago, Virgin Atlantic attacked British Airways for poaching its customers after BA had gained access to Virgin's customer database. The case was high profile and generated a lot of adverse publicity for British Airways. But only because BA was caught! They broke the 11th commandment - "Thou shalt not be found out".

This does not mean that they were not ethically wrong in what they were doing - they were. However ethics has never stopped companies attempting to gain information on competitors.

There are many techniques that can be and are used to find out about competitors. Some are illegal, some underhand and some normal practice. The dividing line between each category is very narrow - and in many cases preventing competitors from gaining information about you will also stop customers from finding the same information.

So there has to be a balance. Some information must be in the public domain - either due to legal considerations (company accounts for example) or for effective marketing - brochures, price-lists and similar material.

Trying to hide this information can only damage your company. Not putting out a press-release or giving an interview will only mean that you have lost valuable coverage that should attract customers to you. Limiting the availability of your brochures may mean that some good prospects will not find out about you.

Don't try and hide the information that could attract new customers.

At the same time, don't leave open holes for the curious competitor or corporate spy. A lot of information should be kept secret.

1) Identify what information is strategic or could damage your company if discovered by a competitor.

Typical examples will be detailed customer lists - including customer purchase history, marketing plans or product cost breakdowns. Protect these by limiting exposure.

Obviously your sales-force needs to know your customer list - but usually, they only need the customer list for their sales areas.

The sales-force is a weak point - and ideally each sales rep. should have signed a legally binding non-disclosure agreement that would result in legal action if they divulge their knowledge to a competitor.

In this respect - be especially aware of disgruntled sales and marketing staff, in case they take their bad feelings out on you. One security technique that works is to seed customer lists with dummy customers. Any unauthorised contact with these dummy customers will come straight to you - and you can then identify the source.

This technique is used by list rental firms. That is how they know that you have re-used a list when you only paid for a single use.

2) Be open with employees.

Employees normally know what is going on in a company. The production people know that they are making more widgets this year than last year - and that the managing director has just bought a new BMW. They also know when things are going badly. Yet many firms keep quiet - refusing to warn staff about problems until too late.

Believe it or not - openness with staff is often a safer approach. Let them know how the company is doing - and if things are going badly, how you plan to improve things. Keeping them in the dark only starts rumours - and dissatisfaction. And unhappy employees are more likely to complain - especially to somebody who shows an interest. That new sympathetic friend in the pub could be working for a competitor.

Let staff know your strengths versus competitors - it helps generates pride in the company. Let them also know the weaknesses - especially if they are in areas under their control.

If market research suggests that your competitor is seen as being more helpful then make sure that all your staff know that competitor X is seen this way - stressing the importance of customer service.

3) Don't ignore the receptionist, junior secretary or security guard.

These individuals may appear to have limited knowledge about your company - but often what they do know can be crucial for filling in the gaps in a competitor's knowledge.

One of my clients was interested in knowing what products were stored in a competitor company's warehouses and for whom. Phoning the company during the day would have resulted in a "what company are you from" response and I would not have found out anything. The security guards, however, had no idea who my client's competitors were - and did not ask anyway. I phoned up - late in the evening - and had a very pleasant chat with somebody who was obviously bored and willing to talk. I obtained more information than I actually needed for my client. I did not misrepresent myself. I gave my name and said straight out what I was interested in. But protecting information was not part of the security man's job - just protecting the physical property!

Another time, I needed to know the launch date of a particular product. My client had read press reports that company X was bringing out a new product. I phoned the company during lunch time and ended up speaking to a secretary in the marketing department. To her credit, she refused to give me any information about the marketing campaign or details about the new product itself. However as the launch date was imminent, she felt that there was no harm in telling me to watch out from the 4 April. That was the information my client wanted - and it enabled the competitor to put adverts for its own product in the media on that date.

At the end of the day - a determined competitor will find out a large amount of information about you. Make sure that the information they obtain does not damage your business - and is controlled and limited to the same information available to customers and prospects.

Copyright © Arthur Weiss, 1998.

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