The Top Metrics You Should Be Modeling In Competitive/Market Intelligence (CI/MI)

CI/MI metrics – What should you be modeling?

Competitive intelligence data refers to information on competitors in a specific market or industry, that you’re analyzing to gain insights into their strengths, weaknesses and strategies.

Market intelligence data refers to information on a specific market or industry, including trends, customer behavior and competitor activities, to inform business decisions and strategies.

In recent posts, we’ve talked about why building models around your competitive and market intelligence data is critical for your CI and MI program, as well as how to build models that align to your business needs.

Hopefully, if you’ve read those articles, you agree that having a solid modeling program in place is important, and you understand how to structure that program to deliver business value to your stakeholders.

But you might be saying, “Sure, I agree on the importance, and I understand we need to stay aligned to business needs. But there are a million business needs and a million priorities — where should I start? What metrics are most important to build models around?”

To that, we’d respond, “Woah, million-dollar question alert!” Or perhaps, more annoyingly, like the analysts and consultants that we are, “It depends.”

It’s true that importance and prioritization for modeling efforts vary by company and stakeholder. With the ever-increasing velocity of sales cycles and pace of technology change, the need of the day is more like the need of the minute, causing CI and MI programs to ebb and flow with each deal and each executive request.

How To Build Trust In Financial Model(ing)

02.22.23/by Allan Krans, Practice Manager and Principal Analyst

A model is only as valuable as the validation, sourcing and trust that underly the numbers. In other parts of this series, we’ve talked about what a financial model is and how it can be used, but none of those things matter without trust in the data. At TBR, this fact plays into every step of working with clients on financial modeling engagements: upfront, during the modeling process, and in the final delivery of the models and our recommendations based on them. Here are some of the techniques we recommend for building trust in your financial models.

Start with your reality, and build a structure around it

Before getting into our recommendations on the top metrics you should model as part of a CI/MI program, it’s important that you think deeply about your business context.

As a quick note, our focus here is to help you build a sustainable, standards-based, and recurring CI/MI modeling program. You’re always going to have ad hoc requests and projects that come up. Some of those are naturally high priority with budget and executive need, and others are nice-to-haves. You’ll field those and manage them as they come. For the purposes of this piece, we’re focusing on building a durable modeling program.

Back to setting context: Before getting into any modeling program building, you need to acknowledge the realities and constraints that your CI/MI team operates within. It’s OK and natural for these to change over time, but you have to start with where you are today, since you’re building your program today, after all. If you’re a product marketing manager at a high-growth, earlier stage B2B SaaS startup, you’re probably managing CI/MI as part of your job. If you’re at an established top-tier enterprise hardware vendor, you are probably on a team that includes many dedicated CI/MI professionals who are aligned to different business units, geographies and/or specializations.

A laundry list of critical elements to consider when prioritizing CI/MI modeling program design includes:

Primary stakeholder(s) that your CI/MI function or capability supports
Current types of requests that your function supports (e.g., ad hoc and sales driven for deal support versus executive and business leader reporting, a hybrid, or something else)
Current means in which you deliver data, information and insights to address those requests (e.g., how formal versus informal, recurring versus project driven, reports versus Slack or email)
Current structure and maturity of your CI/MI capability (e.g., do you even have a CI/MI function, or is it a shared responsibility? Is CI/MI work done at all?)
Breadth and depth of the competitors that your program tracks
CI/MI function goals and objectives
KPIs and metrics used to measure CI/MI success
CI/MI reporting structure (if you report to marketing versus sales or product, that may influence the shape of work and responsibilities)
Dedicated and/or shared resources supporting CI/MI
Skill sets of the CI/MI team
Available budget for CI/MI activities
Tools available for CI/MI
Future plans and strategies for all of the above

The elements individually and collectively establish constraints and structure for the CI/MI modeling program and specific metrics that are most appropriate for your business. If you deeply understand, in terms of CI/MI function or business function, who you serve, what value you create, and how you create that value, it will become second nature to identify and prioritize CI/MI modeling overall and specifically.

If you’re a CI/MI function that is mostly responsible and accountable for, as well as measured by, delivering deal-specific enablement support for your sales team, you likely don’t need a really broad and deep profitability modeling program. If you can only commit shared resources from product marketing to CI/MI and you don’t have dedicated budget for CI/MI resources and tools, you likely are going to seek to automate CI/MI and create self-serve, proactive resources versus building a hands-on, normalized, curated modeling program.

The top metrics you should be modeling in CI/MI

At this point you’re probably saying, “Dude, come on. We came for the list of metrics, and you’re giving us all this high-level strategy stuff. We get the high-level stuff. Bring on the listicle!”

I understand, dear reader, and I acquiesce. But first we need to set some ground rules. This list is going to assume that you have some level of CI/MI modeling competency in place and that you’re looking to expand and optimize that program. This list is also focused on building a recurring, standard quarterly, semiannual and/or annual CI/MI modeling program, with a goal of delivering a standard set of data and insights to your stakeholders on a predictable recurring cadence to facilitate business strategy decisions.

The goal here is to build a “starter pack” for a CI/MI modeling program, based on how we develop our vendor models at TBR and how we see our data and other models being used by leading CI and MI programs at technology vendors. We focus here on broad categories, as the specific metrics will depend on your business and the market(s) that you play in.

This is also intended to be overlaid against your CI/MI maturity as outlined above — perhaps you need all these categories of metrics for your overall business at a corporate level, or perhaps you need them at the country, business line and vertical industry practice levels. The time frame and breakdown of data will also depend on your individual situation. Maybe you will launch coverage annually, or maybe you need it quarterly. Maybe you need to go back for 10 years of historical data, maybe you’re picking up from the current quarter and going forward, and/or maybe you need to forecast for a quarter, one year or five years. All of these dials will be tuned to your CI/MI program as outlined previously.

Without further ado, here are the top categories of metrics and specific metrics that we typically see as part of a foundational CI/MI modeling program:

Market Forecast

Total Addressable Market Forecast (Corporate)
Total Addressable Market Forecast (Business Line, Geography, Vertical)
Vendor Market Share

Corporate Financial Model Strategy

Revenue
Year-to-year Revenue Growth
Organic Versus Inorganic Revenue
Gross and Operating Margin ($ and % of Revenue)
SG&A Expense ($ and % of Revenue)
Sales Expense ($ and % of Revenue)
Marketing Expense ($ and % of Revenue)
R&D Expense ($ and % of Revenue)
Current Ratio
Debt-to-asset Ratio
Return on Assets
Return on Equity
Day Sales Outstanding

Business Segment (Business Line, Geography, Vertical) Financial Model Strategy

Revenue
Year-to-year Revenue Growth
Business Segment Revenue as a Percentage of Corporate Revenue
Gross and Operating Margin ($ and % of Revenue)
Headcount

Go-to-market Strategy

Total Customers
Percentage of Customers by Relationship (New Versus Existing Customers)
Percentage of Customers by Size
Net and Gross Retention Rate
Churn Rate
New Bookings

Product Strategy

Units Sold (if Applicable)
Number of Total Products (Corporate, Business Unit)
Number of New Products
List Product/Service Pricing

Resource Management Strategy

Corporate Headcount
Business Unit Headcount
Geographic Headcount
Headcount by Role/Experience/Level
Revenue Per Employee (Corporate, Business Unit, Geographic)
Attrition
Utilization
Support Versus Billable Headcount
Year-to-year Headcount Growth