Having competitors is a fact of life for most businesses; few can genuinely claim they have none – and if they do they must question why. You have to be aware of the rules of competition in your chosen markets in order to win business when the prospect has a choice of many suppliers.
For the purposes of this post, competitors are either those people or organisations who win business that you wanted or those people or organisations who lose out on business we win. Competitors are potentially different in each sector that you operate within but in order to make your marketing planning effective, you need to know who your real competitors are in each area that you operate so that you can out-position them in the eyes of your prospective customers.
You have to understand their capabilities and ambitions in order to anticipate their response to your strategies.
Answer the following questions fully to ensure that your knowledge of the competition is up to speed.
- Why do they exist?
- Where do they add “will pay for” value for customers?
- Which of your customers are of most interest to them?
- What is their cost base and liquidity?
- Are they less exposed with their suppliers than you are?
- What are their future plans?
- How will their activities affect your strategies?
- How much better than them do you have to be to win their customers?
- Look to the future – are there new competitors coming on board or new ways of doing things that will affect your positioning in the markets where you operate?
- If I were a customer, would I choose your product / service over those offered by your competitors? If so, why? If not, why?
Answering these questions will help you to challenge your existing assumptions about competitors, ensure that you are the customer’s best option and reduce the chances of being surprised by competitor activity in your marketplace.
An understanding of your competition is an essential element in ensuring your business remains healthy. Some of the analysis required above will need to be more based on sound judgement than reference to factual data but it is worth thinking hard about these questions if you are to succeed in the battle to win more profitable customers.
If you need help to get to grips with your own competitors, just let me know.