Understand Your Competition
One of the fun things about business and sales is that nobody has cornered 100% of the market. Our traditional competitors are those who offer some variation of what our business already does. However, even if a competitor is better, faster or cheaper (and it is important to be fully informed when that happens) there’s always something that some clients want that company A doesn’t do, but company B does.
If our company does X better, then finding clients who value X must become a primary focus. We should look for common characteristics of those clients who purchase X and determine if we can serve them. In individuals, these characteristics include demographic similarities like age, economic status, and education, while for businesses factors like industry type, geography, and size can be scrutinized.
Once we have a clear picture of where our product/service intersects with our ideal client profile, we can begin the process of developing a value proposition that is reflective of the best aspects of our offering and the client’s needs.
There may also be constraints that make certain markets difficult or impractical to penetrate. These include factors such as access to raw materials, distance, border restrictions, or regulations that differ from market to market. And there are non-traditional competitors. Here are some examples we may not immediately think of:
- Disruptive technology – look at what Amazon is doing to bricks and mortar retail.
- Doing it yourself – we see more individuals doing their own renovations, plumbing and printing rather than hiring a professional. Often with the help of the Internet.
- Doing nothing. Although this might not seem like competition there are three states that must be overcome if we are to get the order: a) Complacency – being satisfied with the status quo; b) Ignorance – failing to recognize the problem; and c) Inertia – tending to avoid making any change.
Sometimes an examination of competition leads to difficult decisions. What if we see little or no discernible difference between what we do and what they do? We can compete on factors like price, or hope that if we provide over-the-top service, they’ll favour us with their business. If our product/service isn’t strategic for other reasons (we get more profitable business lines because we also offer this ‘football’ commodity) then we face difficult choices. We can either abandon the offering or change what we offer to differentiate us in a meaningful way.
An objective analysis of our offering and our ideal client profile will put us in a better position to decide what business we’re in, or should be in. Do we have a differentiation strategy that will attract a meaningful share of the market at a reasonable rate of return? Understanding what or who our competition is will be a key component of our success.
February 1, 2019
Type the characters you see in the picture left; if you can't read them, submit the form and a new image will be generated. Not case sensitive.