Last week, while running a project kick-off session with a client I used the competitive profile matrix model. I don’t know how many times I’ve used it over the years and I couldn’t estimate how many different scenarios I’ve applied it to – I do know I used it when trying to decide between four options for the first house I bought some twenty-five years ago…
Part of its beauty, for me, is in the simplicity of it and the way it allows you to cut through all the fringe issues to get to what really matters.
There are four basic elements which make up the Competitive Profile Matrix:
- Critical Success Factors (and to be honest, I often refer to the whole exercise as a CSF piece for ease)
- A weighting applied to each of those key areas
- A rating applied to you and your competitors’ performance in each CSF area
- A score and total score.
Those are the four basic elements. What sits behind that will depend on a lot of factors: including, but not limited to: what you’re doing it for, who you’re doing it with, who is facilitating the session and how you record it.
Here’s a version of the basic model:
Having decided the competitors you want to benchmark yourself against, there are four basic steps:
The first step is to decide on what the critical success factor areas are: what are the 5-10 areas most important to the customer? (You can have as many or as few as you want but somewhere in this range has tended to work best for me)?
Depending on the purpose of the exercise this may be a macro or micro element of your business. The model, as I said at the outset, is brilliantly flexible.
The second step is to give each of those areas a % ranking of importance: with the total adding up to 100%. (you can start to see why it’s good not to include too many factors).
Having agreed on that you move to the third step – applying ratings from 1-10 in each of these core areas against yourself and your competitors.
And then, it’s a case of multiplying the ranking and the individual scores. You may end up with something like this:
In the above scenario despite ‘your company’ having a high product and pricing ratings, and Acme having the best overall product, it is Jones Ltd who are the highest scoring, primarily through brand reputation and customer service (of course, this is purely for demonstration purposes).
Who do you do this exercise with?
Again, I’ve found the model to be highly flexible: it’s a great conversation prompt for internal sessions: and reveals a lot about for colleagues’ perceptions on themselves and the competitors. It can be a great sharing piece, which evokes anecdotes, facts and figures from members of the team who have direct or indirect experience of the competition.
I’ve run it with hundreds of end-users over many projects and it can be fascinating to compare the two: if an interview with a user is facilitated well, it can often reveal what we as a company think is important to the customer isn’t their key priority or concern. The key is in the quality of the interview and the reading of the results to produce something that can be actionable when it is brought back in-house for discussion and deeper analysis.
How long does it take to run the exercise?
Sorry, but I’m going to use that word flexible again. It can be a one-hour stimulus session just to get the ball rolling, or it can be a full research piece forming the basis of strategic thinking or a promotional plan. I’ve known the model form major parts of campaigns, and change the entire focus of a department, division or even business.
What sort of things should be in the key areas?
It can be as micro or macro as you choose depending on the purpose. I’ve known and worked with teams in the past who have decided on their initial areas, but after the results have come in showing a major dominance of one to then break that down and do another CSF around that (an example? Social Media – gets a high mark, so then break it down by social media channels to see whether the budget and resource is being used to its best)
What do you need to run it?
It depends on the scale and the purpose, of course. If you’re using external customers you need a good interviewer and interviewee to ensure clarity of understanding, knowledge to be able to give appropriate answers, and the ability to avoid overly biased customers (one way or another). In terms of internal group discussion, it helps to have a mixed group – in terms of experience, competitor and customer knowledge and areas of subject matter expertise. You also need a strong facilitator – whether internal or external to keep things on track and to prompt with the right questions.
What do you get as a result of doing the exercise?
As stated earlier – it depends on what you’re looking for and how you run it. It can be a quick sense check or a foundation for directional advancement or even change. It can provide a raft of additional data you weren’t even expecting to get: primary and secondary. If you’re just running it internally it can open your eyes to colleagues’ feelings, passions and beliefs (and vice versa), if you’re interviewing external customers it can give you a whole new insight into their way of thinking…and it can show them you’re interested in hearing what’s important to them, and what you’re prepared to do about that.
The above is the most basic representation of the model. An experienced facilitator will be able to assess the requirements/ purpose and vary the model through a number of means to clarify, focus, differentiate or distil relevant elements depending on the needs…the number of variations I’ve applied over the years would be several different articles, but they all add to my belief of the flexibility and value of the model.
I’ve run well over 100 Competitive Profile Matrix over the last twenty years in many countries, at many different levels (in terms of project and attendees), and for many different purposes, but invariably I have found it one of the most stimulating tools for those participating and, when ran properly, one of the most valuable.
If you’re interested in discussing the CPM in more detail, or in running a session with your team, please use the contact form, or email me at email@example.com for further information.