When setting up a business you need to find out about your competitors. And once up and running, you need to keep tabs on them. Such knowledge can give you a distinct competitive edge.
So start building a file on them, looking at everything from the customer’s viewpoint. Ask suppliers and employees what they know about the competition.
Here are 18 crunch questions to help you keep you one, if not several, leaps ahead of your rivals.
How to assess your competitors
1) Who are your competitors?
Direct competitors are easy to identify – they offer a similar product or service in the same way to your target market. But you also have indirect competitors – people selling the same product in different ways (maybe ferry tickets on the web instead of in a travel shop). Or they are selling alternative solutions to the same needs (train or air-tickets?).
2) What products and services do they offer?
Do they overlap with yours?
3) What customer needs and wants are they satisfying?
Needs are different from wants: you need a car but you want a Mercedes.
4) Are their benefits powerful and attractive?
What is their unique selling proposition? Do you have benefits and selling points in common?
5) How do they position themselves?
Are they the Savoy or a McDonald’s? What’s their tone? Avuncular and learned or rough-and-ready, brash and with-it? Is their mind-set corner-store, high street franchise or old establishment? How do you position yourself in relation to them?
6) What are their pricing strategies?
What is included and excluded from the price? Are they exclusive and high-priced or a dime-a-dozen? How does this affect you?
7) Are they as passionate and knowledgeable as you?
Or are they more in it for the high volumes, loss leaders or portfolio fillers?
8) How do they market themselves?
What buying habits are they trying to influence? Where do they advertise? What sales channels do they use – retail, direct mail, internet, wholesale? Pose as a prospect so you get on their mailing list.
9) What is their sales literature like?
How can you make yours stand out in comparison?
10) How much does geographical location matter?
The right kind of competition in close proximity can be advantageous – it lures more prospects to the area. If they are thoroughly inconvenient to reach, but still do well, what is their secret?
11) How good are their staff?
Are they recruiting? If so, for what positions? Who are they hiring and why? Should you be considering enticing them over to you?
12) What resources do they have in terms of finance and people?
Are they growing, level pegging or declining? If so, why? You can use the Internet to get hold of credit reports on them.
Find out how many employees they have, and what they do. For instance, do they have a maintenance department or do they outsource this?
13) What are their strengths compared to yours?
How can you meet or exceed them?
14) What are their weaknesses?
How can you exploit these?
15) What are their billing strategies?
Do they ask for cash on delivery or offer free credit? Do they accept credit cards? How does this affect you?
16) How do their customers regard them?
Try to identify current and past customers and ask them about their experiences. Maybe some of your own customers buy from your competitors. When you land a new customer, ask about their past suppliers. The key question is, ‘What was wrong with your last supplier?’
17) What assumptions are you making?
Check these again. Research your own customers to find out whether you are on course. You are only good if your customers say you are.
18) What else are you competing with?
For example, what do people do when they don’t buy from you or your competitors? If you sell holidays, what else do people spend their money on if they stay at home? If people aren’t buying your tinned soup, is it because they are buying from the competition, they are making it themselves or because soup is now out of fashion? How will this influence your strategy?
Develop a strategy
Once you have all this information, analyse their strengths and weaknesses and relate them to your own. Their strengths are your threats, their weaknesses your opportunities. Be as objective as you can.
Look to yourself. Are your strengths good enough to lure people away from the competition – or even to keep existing customers? Could your weaknesses be driving people away?
Look to the market. Are there trends emerging that could destroy your market or require you to service it in a different way?
This kind of research and analysis will throw up lots of new opportunities. Acting on your findings will keep you at the front of your field. But remember, you don’t have to be streets ahead – in a race, the first horse can be ahead by as little as a nose.
