The team members of a local home electronics company were discussing problems of the business – not just theirs, but also the competition’s.
One of the partners pointed out that customers could be really difficult to work with. Quite often, a homeowner would show up at his house late in the day and became annoyed because the company’s workers were just leaving or were doing things that he didn’t know about.
This discussion led to a careful analysis of the company’s work patterns and those of the competition. This home electronics company was very fortunate that several of their employees had worked for competitors. By understanding what the competition did better and worse, they were able to capitalize on that knowledge and provide better services to their customers.
In a time when customers can pick a company based on not just price, but also service, location or ease of doing business, it pays to know what the competition does. By utilizing this information, you can create value and make your business stand out. Here are a few tips:
Get the facts about your competition
If you don’t know about what your competition is doing, you need to find out. One easy way to get information about competition is to talk to them. You may not be able to get the owner of a competitive company to open up to you, but you can talk to their customers, other competitors, and most important, their salespeople.
Another way to find out about your competition is to read any articles, accolades and company information online. The company Web site is a great place to start. Often, companies include press releases, a media page, and even a customer or client listing on their site.
Unique action plans pay off
Once you know what the competition is up to, you can address the gaps in your services and products. For the home electronics company mentioned earlier, a new update system resolved the problem of difficult customers. Their system keeps each client informed daily via an e-mail message at the end of the day. The job supervisor or account manager sends an e-mail update from the job site to the customer, with a copy to the management team, advising the status of the job, the work accomplished that day, and what was planned for tomorrow. Any issues or problems related to the job were mentioned and referred to the appropriate personnel.
In addition, this update system was not just a major tool for keeping customers happy, but it also helped close more sales with prospects. The electronics company was able to outsell their competition by mentioning their “up-to-the-minute" reporting system, which made them more efficient and also showed accountability to their customers.
Now that you know the basics about your competition and the way they operate, figure out how your company can outperform them. Are there unique benefits to your company’s product or service? Do customers choose your competition because of ease of use or time issues? Get feedback and input from your employees to provide solutions immediately. It may also be helpful to get direct and honest feedback from your customers.
Use a Competitive Matrix as a Competitive Weapon
Another effective tool for analyzing the competition and building programs to make your company more effective is the competitive matrix.
This simple spreadsheet is designed to force you and your team to come to grips with the key competitive factors in the market.
Creating a competitive matrix requires two major ingredients:
1. Know who the key competition is
2. Be focused on the key elements of competition
Evaluate the vital factors of the market for each of the companies, including yours. For example:
Price is always important. Evaluate yourself and your competition on a 1-10 scale, where 10 is best and 1 is worst. If you are the highest priced company you are a 1. You are the least price competitive. If one of your competitors is always the price leader, he is a 10. For purposes of this discussion he is the best in the market. He may not be the best in other things, such as profit. A 5 may be the best place to be – right in the middle.
What other factors are important as you judge the competitive environment? You need to determine the top five to seven elements to evaluate each company. It could be anything in your sales and marketing mix such as the ability of your sales people, the sales tools you use or your sales programs. How do these elements compare to your competitors? It may be something as simple as how the phone is answered. Does the company have impressive facilities? Are your designs unique and innovative? Depending on what business you are in, you will determine the key independent variables that you want to use to evaluate the market.
It’s all relative: How important is each element?
The other key factor in analyzing the competitive matrix is your employees’ evaluation of the relative importance of each element. How important are credit terms to closing the sale? How important is the design of your sales literature? Are your salespeople trained and updated on all pertinent information? With each company and industry, the answers will be different, but the bottom line is you must use of the competitive matrix on a continuous basis.
Now that you’ve researched the competition and determined your strengths and weaknesses relative to the competition, go out there and do something! The most important thing is to execute your ideas, based on what’ve you seen and learned. This will give you an edge and help you “eat the other guy’s lunch!”
John Haskell is a professional speaker, seminar leader, marketing and sales consultant, and author of “Profit Rx.” As a former CEO/COO of divisions of Fortune 500 companies and as president of The Professional Marketing Group Inc., he consistently demonstrates the value of written marketing and sales planning. For more information, visit www.drrevenue.com or e-mail firstname.lastname@example.org.