At the recent Olympic Games, every athlete knew exactly what the ‘personal best’ figures for each of their competitors was. That’s because it’s almost impossible to succeed at anything, unless you know what you are competing against!
Equally, to compete successfully in business, you need to research what you are marketing against! We call this research Competitor Analysis. So, I have a question for you:
“How much do you know about your competitors and what they offer?”
In my experience, most small and medium-sized businesses know very little about the quality of their competitor’s services. They will often believe that their own service is very good, but when you accurately compare it against their competitors, it’s generally no better than average.
I am convinced this lack of Competitor Analysis is why there are so many average services out there! After all, no one sets out to be ‘just average’.
Businesses then market their services, thinking that what they offer is great value – and wonder why they get very little positive response! It’s not always the quality of a small business’s marketing that’s letting them down, but the ‘attractiveness’ of what they are offering!
In order to motivate someone to switch from one provider to another, there must be a compelling reason for them to do so. This means you need to know what your competitors offer, so you can make YOUR services more valuable than theirs!
Competitor Analysis explained
Competitor Analysis is where you analyse what your competitors are offering to the marketplace. This allows you to see how YOUR services stack up against the other services being offered to your potential clients (and existing clients!). As part of your Competitor Analysis, you will need to find out things like; what kind of guarantees your competitors offer, their payment terms, their prices, the range of services they offer and their opening hours etc.
I spoke recently with the owner of a recruitment company, who told me that his main competitors all offered a very poor service, compared to his. I asked how he knew. He replied that whenever a client moved from a competitor to him, they always said what a poor service they had just received! He was basing his ‘research’ on what these non-typical, disgruntled people said!
You cannot build your competitor research, based on the jaundiced opinions of anyone! You need to know what the reality of the situation is, because THAT’S what you will be marketing your services against!
I have a friend who sells homes in London, which market for over £2,000,000. She found her clients were often hesitant about improving their home before marketing it, thinking it was already ‘good enough’ to quickly attract a buyer.
So, she started taking new clients to view a selection of homes in the same price range as their own – so they could clearly see what their home was competing against. Universally, this totally changes their opinions and they are happy to make any required improvements.
Most businesses are like the home-owners who think that their home is already great value, without knowing what the others are like. This can prove commercially fatal – especially in today’s challenging economy!
Some ideas to start your competitor analysis
Competitor Analysis on the Internet
Depending on the industry you are in, you can often get a mountain of extremely valuable information by visiting a competitors’ website. If you are in retail, for example, you will immediately be able to see; their product lines, prices, delivery times, guarantees etc.
No matter what industry you are in, most websites will have an ‘about’ page, which tells you all about the company. You should also be able to tell very quickly what each company thinks it’s best at – because people sell their services based on their strengths!
You will also be able to tell in seconds, if they have had their website professionally copy written or not. This is a key indicator as to how seriously they take their marketing.
Conversations with THEIR clients
Whenever you meet someone, who is using the services of one of your competitors, ask them how well they are being looked after. This is a more accurate measurement of the quality of a competitor’s services, than the earlier example; where people with an axe to grind were relied upon.
An existing client is someone who can generally, be seen as having an ‘average’ or ‘typical’ experience of a service provider. If they say their service provider is great or awful – ask them; “In what way?” Then listen!
Avoid conversations with suppliers
I have found conversations with suppliers, who also supply one’s competitors, to be close to worthless! Also, be extremely careful what you say to anyone who gives you too much information. As my mother used to tell me; “those who bring news, carry news!”
After your Competitor Analysis – What next?
After your Competitor Analysis, take a good close look at your own business and find ways to beat them! Don’t just try to match them – look at how you can go one better. If you cannot offer a better service to someone than they already get – why on earth should they switch to you?
For example, would YOU go through all the hassle of switching from your current; accountant, insurance broker, bank or recruitment provider; for a service that’s no better than you already receive?
Of course not – and NOR WOULD ANYONE ELSE!
Only when you have developed a service that you know, with confidence, is better than your competition, are you ready to market it. When you have a great service, and you get that message in front of potential clients with compelling marketing, the sky’s the limit. You can achieve anything!