“𝐈𝐟 𝐲𝐨𝐮 𝐤𝐧𝐨𝐰 𝐭𝐡𝐞 𝐞𝐧𝐞𝐦𝐲 𝐚𝐧𝐝 𝐤𝐧𝐨𝐰 𝐲𝐨𝐮𝐫𝐬𝐞𝐥𝐟, 𝐲𝐨𝐮 𝐧𝐞𝐞𝐝 𝐧𝐨𝐭 𝐟𝐞𝐚𝐫 𝐭𝐡𝐞 𝐫𝐞𝐬𝐮𝐥𝐭 𝐨𝐟 𝐚 𝐡𝐮𝐧𝐝𝐫𝐞𝐝 𝐛𝐚𝐭𝐭𝐥𝐞𝐬.”
While talking about physical battle, Sun Tzu’s words* also apply to market competition. You can analyze how business rivals operate to identify potential opportunities to grow and create effective marketing strategies.
You can learn new industry trends and market insights which help to inform your value proposition** and improve your communication.
When you identify what your competitors are doing right, you can set higher expectations and benchmarks for your business. By realizing what your competitors are doing wrong, you may discover opportunities for new product features or client services to address unmet needs. You may also find ancillary markets and new customer segments.
You may even learn ways to cut costs and lower prices by identifying what is profoundly important to customers and removing or reducing other aspects of your product or service which are not important. For instance, customers fixated on price may not mind reduced service or functionality to lower the cost. The flip side is also true – i.e. customers fixated on value are willing to pay a premium.
To conduct a comprehensive competitive analysis, take the following steps to identify major competitors and research their products, sales, and marketing strategies:
1. Discover your competitors by learning which companies provide the same products or services as well as companies which could solve your customers’ needs through other means (e.g. if you are McDonalds, you may review fast food restaurants that don’t serve burgers and fries but satisfy hunger pangs).
2. Determine what they offer by analyzing their technology, services, process, quality, prices, and positioning. If you lose deals, it’s useful to ask prospects why they chose competitors.
3. Research their marketing channels and content (e.g. social media, website, newsletters, and online reviews) and their sales process (outreach, negotiation, as well as partnerships, influencers, and referrals).
4. Examine their pricing and negotiations. For instance, do they offer benefits such as free or expedited shipping or discounted pricing for multiple orders?
5. Prioritize what they do well and could improve across the business, marketing, sales, and client services based on everything you learn.
Tactically, you will want to decide if you do the research in-house or through a consultant (or perhaps a hybrid where a consultant does the initial research), how to organize the information, and how to conduct the research (e.g. through online web tools, mystery shopping, surveys, interviews, etc.).
There are a number of online tools and browser extensions to monitor competitors. To determine them and decipher the results, it may be worth a couple hours of an expert’s time (versus many hours of your own time with ultimately the same or worse results).
There is much to gain by studying your competitors, however, this analysis should supplement your performance, not dictate your actions. There is a danger to always looking outside of depleting energy to support your vision and build your business. In other words, competitive analysis should supplement your performance, not dictate your actions.
Obsessing over the competition decays your vision, values, and outcome by reacting to others instead of innovating new and better solutions. Obsessions often start mildly and grow over time. Ensure your efforts are dedicated to growing your business, not following others.
Rely on competitive research to learn what others are doing and then to enhance your efforts. Done correctly, it will help you discover new ways to stand out and to benefit customers.
* The full quote: “If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.” ― Sun Tzu, 𝑇ℎ𝑒 𝐴𝑟𝑡 𝑜𝑓 𝑊𝑎𝑟
** See article on Value Proposition here: www.webuildscalegrow.com/post/8ca47864
Photo by Europeana (Europe's digital platform for cultural heritage) which can be found here: europeana.eu