WHY STUDY YOUR COMPETITORS?
Because it’s a sure-fire way of keeping ahead of them.
Where in your business plan is the section headed ‘Marketing and selling against competitors’? If it’s not there, then add it right away.
Do you know who your competitors are – who are the dangerous one’s and how specifically you compete against them?
How well you market and sell your products / services against your competitors, will heavily influence your business success.
Apart from a basic marketing analysis that takes a cursory look at competitors, many small businesses I meet don’t attach sufficient importance to understanding their competitors and the threat they pose to the success of the business: but more importantly, the opportunity they create.
It’s essential for any business, marketing and sales strategy that you spend the time and properly research who your competitors are and what they’re up to. Only then can you develop a strategy and tactics to win business against them.
Marketing and sales strategy
A key part of your marketing and sales strategy is to have a plan and tactics to beat competitors to your prospective and existing customers.
In marketing terms, your prospective customers have a need that you can satisfy with your product or service – but then, and here’s the problem, so can your competitors! The reality is that, like it or not, your prospective and existing customers are, or will be, talking to your competitors.
Having established who your competitors are, it’s essential that you find out what they promote as their unique selling point(s) and how their products or services, prices and value compares and differs to yours. A good question to ask at this point is – from which competitors are your target prospective customers currently buying – and why?
You may need to research tens of competitors to establish who your main competitors really are. Then list them in order of the size of the threat they pose to your business and keep up to date with their marketing messages. Social media can be useful for this.
Your sales proposition
Let’s think more about your sales proposition and how you sell.
Once you’ve established how your main competitors market and sell, what they say to prospects and the unique selling proposition they promote, make sure that your own proposition is better than theirs, or at least, more relevant to your prospect as they see it.
Creating a sales proposition that’s better than your established competitors is not going to be easy; however, it will help if you remember this: You only need to be ten per cent better to win the order.
This means that your product or service doesn’t have to be amazingly better than your competitors to get the attention of the prospect; it only has to be ten per cent better – ten per cent faster, larger, smaller, lower cost (take care with this one), delivered ten per cent quicker, or whatever it happens to be…
The more features that are ten per cent better, the more likely you are to attract the attention of your prospective buyer and begin beating competitors to the order.
On the subject of beating competitors to the order, let’s deal with price.
Too many start up and micro businesses think that to win the order against competitors, they have to offer the lowest price. If you can do this, then good for you, but for most businesses, this strategy is a race to the bottom and utter madness.
In most markets, there is almost always a competitor that can beat you on price. So don’t go there; you have to work smarter than that.
Here are five of the alternatives to selling on price that I teach my students. They may not all apply to you and your particular product or service, but I bet one or two will.
- Higher quality always helps justify a higher price.
- Customers will often pay a premium for a product that is safer to use.
- A product or service that saves time will generally be worth more than one that doesn’t.
- A growing number of customers will pay a higher price for ethical, sustainable and recyclable.
- Giving better or excellent service, being polite and building good relationships with the prospect is something that small companies can do really well and that larger companies very often don’t.
In each case, be sure to communicate clearly and precisely how yours is a higher quality product or service, safer, faster etc. than your competitors – or whatever your prospective customer sees as the key benefit to them.
Throughout the life of your business most if not every one of your prospects is going to engage with your competitors, so it’s vital that you pay serious attention to your competitors and know how to win orders against them.
Here’s a tip to ensure that you never forget about your competitors and give them the serious attention they deserve.
At each and every one of your monthly management and sales meetings (both if you can, not just one), ensure that ‘Competitors’ is an agenda item. Discuss what they’ve been up to this month, so you can continue to stay ahead of them and I hope, out-sell them.