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Size Up the Competition
A simple, 4-step competitive analysis
will help you rise above the pack
By Kim T. Gordon
Contrary to what some may say,
growing a business is not a blood sport. It's not about killing the competition
or winning at all costs. The fact is, successful competitors tend to meet on a
more common ground, sometimes collaborating one day and bidding against each
other the next. The key to winning market share is to differentiate your
small business by providing products, services, or
solutions that your best prospects will find more desirable than what's offered
by your closest competitors.
Suppose you call a new prospect and
she tells you she's buying from your competitor... is that good or bad news?
Believe it or not, that's good news because it means you've found a qualified
prospect. Experienced marketers know it's always easier to fill a need than to
create one. Someone who is already using the type of product or service you
offer is a great prospect because he or she has a clearly defined need and can
afford the purchase.
The job of convincing qualified
prospects to buy from you instead of your competitors is where the real work
begins. Follow these four steps to complete a simple competitive analysis that
will help you uncover the information you need to effectively differentiate from
-- and position against -- the competition based on your own unique selling
points.
Step 1. Do Some Detective Work
The first step in a competitive
analysis is to gather your competitors' marketing tools and materials. Examine
their Web pages, print and broadcast advertising, and articles in which they've
been featured. Request their brochures, sell sheets and any collateral
materials. Depending on your industry, you may also be able to do some mystery
shopping, which will allow you to experience what it's like to shop and buy from
companies that sell similar products or services to your own.
Step 2. Evaluate "Perceived" Competitors
Chances are, you have a lot more
competitors than you think. In addition to real competitors, you must also
evaluate the marketing tools and materials of any businesses your prospects
perceive as offering a similar set of products or services. For example, a
custom cabinetmaker may believe he competes exclusively with other companies
that build kitchen cabinets to order. But if his prospects think of the
customized cabinetry offered by major home centers as competitive products, the
cabinetmaker must evaluate the way the major chains market cabinetry in his
local area.
Step 3. Focus On the Message
Once you have gathered the
materials, the next step is to analyze what's being communicated and how.
Identify the key promises made by your broad field of competitors. And don't be
surprised if you see a lot of "me-too" marketing. There's just so much out there
that’s mediocre or worse, you may find the majority of your competitors have
similar messaging, with only a few front-runners showing strong points of
differentiation.
After assessing the most important
messaging, look at the actual tools and materials themselves. What formats seem
to work best overall? At this point, your competitive analysis will reveal
whether your company is lacking any standard tools that prospects expect
everyone in your industry to offer.
Step 4. Find a Unique Spin
Now comes the moment of truth.
You've gathered all the materials and have learned the key message points of
your real and perceived competitors. It all boils down to this -- how does your
own company meet its customers’ needs in a way that is both unique and
compelling? To find the answer, consider not only the products or services you
sell but how you operate, including any company-specific characteristics, such
as a higher level of customer service or free next-day shipping. If you can't
find a selling point based on your current product or service offering that will
help you stand out from your competitors, use what you've learned in this
competitive analysis to retool what you sell and how you sell it in order to
successfully position your business to stand out from the pack.
Get In-depth
Coaching on this Topic>>
Kim
T. Gordon's columns and articles are read by more than
3 million small-business owners each month. She is a small-business expert
and the author of four books, including Maximum Marketing,
Minimum Dollars: The Top 50 Ways to Grow Your Small Business.
Copyrighted material. May not be reproduced in
whole or part without expressed permission from the author. |