Competitors are the concern of all businesses, no matter their size. Too often we wait until sales have dropped unexpectedly or enquiries are down until we look at what the competition are doing.
The presence of competition is healthy, it keeps you motivated to continually move forward and to refresh and refine your ideas. In essence, it can push your business further and ensure you don’t become complacent within your industry.
In this post we will discuss how to get competitive with your competitors, to ensure you stay at the front of the pack and connect with your target market.
How to Identify your Competitors
When we ask our clients who they see as their competitors, they always have a list of 3 or 4 businesses offering the same or similar product or service. When we do our competitive analysis as part of our Mini Marketing plan, we generally find quite a few more.
Why the difference? As a business owner, when you look for competitors you tend to think as a business owner. “My business is selling flowers online. What other major online florists are there?”
When we identify competitors for a client, we think like a consumer “My mum’s birthday is coming up, what could I get delivered to her?” All of a sudden we find fruit baskets, chocolate hampers and gift vouchers as competitors for our online florist.
We see most businesses as having two types of competition:
These are the companies offering the same or similar product or service. These are our most obvious competitors, but not always our biggest. E.g. Gilette vs Schick Razor, Cornflakes vs Weet Bix, Channel 7 vs Channel 10 etc
These are the substitutes for our type of product or service. These are not always as obvious and are where we need to think like our consumer and understand the options available to them. E.g. Razors vs Wax Strips, Cereal vs Toast, TV vs watching a DVD etc
So to identify your competitors, consider the substitute categories too and you will have a more complete idea of who your competitors are.
Update your Market Analysis
Many businesses start off with a Business Plan or a Marketing Plan or some points in a notebook on how they could turn their hobby into an income stream. As part of this planning process, formally or not, we tend to do a Market Analysis.
We ask ourselves:
- Where does my offer sit in the market?
- Is there demand for it?
- Are there competitors? Are they doing a good job?
- Is the market saturated with offers or is it fairly open for a new entrant?
- Is that market a good size or is it small and niche?
- What are consumers willing to pay?
- What is my competitive advantage?
We do a fairly thorough job in attempting to answer those questions. We launch our business and we rarely reassess. When we ask our clients who they see as their competition, they stop and think, they even do some fresh research and overwhelmingly we hear “Wow! Now that I’m looking I’ve noticed a few more have popped up”.
We recommend a scheduled maintenance program.
Know your Customer
Do we need to stress how critical it is to look after your existing customers?
Your customers are the exact people that your competitors are targeting so make sure you are providing exceptional customer service, and that you are both proactive and responsive to their expectations and requirements.
Remember that your customers expectations will change over time, and can alter dramatically when economic conditions shift or become unstable.
Investigate what is important to your customers right now – is it lower price, a more flexible service? Ensure that you amend your marketing strategy to suit.
Update your Image
We are all visual creatures at heart and our heads are easily turned by the modern, pretty, new and shiny.
Your competitor, if they are new to market, will have invested in a fresh new look that extends consistently across all channels of their media and marketing and communicates who they are.
Take a good objective look at the space you are occupying- whether it be digital or physical. A fresh coat of paint, a new window display, a refresh of your branding, your logo, new business cards and stationery and an updated website will do wonders for the perception you are creating for your existing customers and on your own motivation to drive your business. Make sure your image reflects who you are today.
Don’t Get Mad, Get Even
Just like when you launched and took share from other players, new businesses are launching all the time and a few are after your piece of the pie, these competitors want to take your consumers and make them their own.
If you follow our scheduled maintenance program above, we are sure your top 5 list of competitors will be constantly changing and we are sure you will find new entrants that look and sound surprisingly (and frustratingly) like they are trying to be you!
It’s a compliment really; they are competing with you because you are on their top 5 list. Your business is being perceived as successful, credible and desirable and so you are a threat.
The best way to get even is to be even better at what you do. With our scheduled maintenance program, every month you are going to review your top 5 competitors and as part of that you should look at:
- What part/s of their offer is stronger than yours?
- What part/s of their offer is weaker than yours?
- How are they promoting?
- How many touch point’s do they have? E.g. Website, Storefront, Blog, Twitter, Facebook Page, Newsletter
- How you can stay up to date with their touch points E.g. Subscribe, Like, Follow, Visit
Then take that information and learn from it. Learn how to put your own spin on what you see as working well for the competition. For example, if you are an online florist and a competitor has just put up a section on what flower for what occasion, think how you could implement a similar page, but in a way that it reflects your brand and its communication style.
Competing with your competitors requires you to invest time in monitoring the competition regularly.
At a minimum, aim to do the annual review – you’ll be glad you did! We offer a thorough competitive review a part of our Mini Marketing Plan package and sometimes it really works to have an outsider look in with a fresh perspective. Get in touch if you’d like to know more.
You are now armed with the very best defences. Are you ready to face the competition?
Stay tuned for our revision of D is for the Decision Making Process.