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In order to be truly marketing
driven, you must understand two things better than anybody else
does: YOUR PROSPECTS AND YOUR COMPETITION.
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:
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You may think you’re the best when in fact
you’re not – this is the “getting caught up in your own
rhetoric” syndrome.
-
You may be the best, but others are
sneaking up on you. Remember, your competition isn’t standing
still, and they’re doing whatever possible to improve themselves
and steal your market share.
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There may be emerging trends that spawn a
new type of competitor which may pose a serious threat to your
business. An example is the free, on-line, collaborative, not
for profit encyclopedia Wikipedia (www.wikipedia.org) that’s
presenting a very real challenge to the venerable (established
in 1768), for profit Encyclopedia Britannica.
These are but a few reasons why you need to pay close
attention to your competitors.
There are broadly three types of
competition you need to study:
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Direct: Competitors that do exactly
what you do and target the same customers.
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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.
-
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?
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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.
But remember, you can’t differentiate and
innovate without knowing your competition.
About our Newsletters -- Core Marketing’s newsletters are designed to take you through a step
by step process to build a marketing system. If you want to review
prior versions, simply
click here or visit our web site at
www.coremarketingstrategies.com and go to Free Marketing
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