Our most recent newsletters focused on understanding your prospect. In this issue, we’ll concentrate on competition – why it’s so important to develop this insight and what specifically you need to know. 

Whenever we hold a speaking engagement or marketing workshop, we ask the following question: Are you better than your competitors in terms of providing overall value – are you the best possible choice? Consistently, over 90% of people in attendance respond “YES”. 

And that’s a good thing. If you’re in business, you must passionately believe you are the best. As business owners, your primary job is to make sure you create optimal value for your customers and to strive to be the best possible option in your chosen markets. It’s not enough to simply say you’re better, you must in fact be better. 

But what are these businesses basing this “YES” response on? Have they researched their competitors so they can unequivocally make the claim that they are better? Probably not. And if you don’t research your competition, a number of not so good things might happen:  

1. Direct: Competitors that do exactly what you do and target the same customers.

2. Indirect: Competitive businesses that a customer could use as a substitute for what you do. Stock brokers now compete with on-line discount trading web sites. 

3. Do Nothing: This is when a prospect is indifferent about what you do, and this is usually the most difficult competitor to overcome.

Each of these competitors pose different marketing challenges, so it’s imperative to understand them and position your business accordingly.

What insight do we need to develop about competition?

• What do they do well, what are their strengths? You want to benchmark yourself against competitive best practices so you can make improvements to your business. Again, your job is to strive to be better.

• How do they position themselves in your chosen markets? If your positioning strategy is exactly the same as your competitors, how will your prospects be able to tell the difference? If you truly are better, no one will ever know it.

• How are your competitors perceived in the market place? Do they have a good or bad reputation? Are they perceived as leading edge or “same old”? Understanding how your competitors are perceived will assist you in developing an appropriate positioning strategy.

• How are they performing? Are they growing or in decline? Is there one competitor that’s chewing up market share? Are some competitors competing on price to regain market share? Are they making or losing money? How your competition is performing will help guide your strategies and priorities.

• What types of investments are they making? Are competitors investing heavily in marketing? On expanding capacity? On technology? The types of investments competitors are making will shed light on their priorities and the potential impact on your business.

How do we get our hands on this valuable competitive information?

• Spending time on a competitor’s web site will provide a good sense of how they position themselves, what areas of the business are emphasized, and in many cases who their customers are.

• The Internet is an invaluable research tool – you’ll likely find articles, public documents or annual reports about your competition on-line.

• Contacting your competition’s customers is a good way to gain an understanding of how they’re perceived in the marketplace.

• Third parties who work with your competitors can often give you an insiders perspective about your competition.

• You can contact your competitors directly to get a sense of how they conduct themselves: how do they answer the phone, are they willing to provide information that would help a prospect make a decision, do they ask you the right questions, etc.

Gathering information about your competition requires you to be resourceful, but any insight gained will be of extreme value. You should use this information to clearly differentiate your business and make it obvious you are the best choice.

More importantly, you should use this insight to INNOVATE YOUR BUSINESS. Peter Drucker says that “any existing organization goes down fast if it does not innovate.....Not to innovate is the single largest reason for the decline of existing organizations.”

Many business owners are unnecessarily intimidated by innovation. In our next newsletter we’ll cover innovation in detail - what it means and why it must  become a central theme in your business.