A Step Ahead
In order to create your new sales literature, you're about to make a lot of assumptions about key issues that, over time, may prove to be wrong. Who will your best customers be? What are they willing to pay? What methods of billing, delivery and customer service do your customers prefer? You can learn the answers to these questions--without guessing--by analyzing your competitors' marketing materials.
It will cost you little or nothing, yet a competitive analysis may save you thousands of dollars by preventing you from heading down any number of wrong paths as you develop your marketing materials and launch your business.
A thorough competitive analysis will help you determine the range of rates you might charge and what your pricing strategies ought to be. It will reveal your competitors' key selling points and the expectations they've raised among your target audience. You'll learn the strengths and weaknesses of competitors and discover which niches are being served and which are not. It may also point the way for you to develop a unique and lucrative niche for your new company.
Begin by searching through all the magazines, newspapers and directories that reach your prospective customers. Look for advertising from companies that offer products or services similar to yours. They need not be direct competitors. If you're preparing to start a PC-repair business, for example, you'll compete indirectly with major businesses such as CompUSA that sell PCs and offer repair services. While only a part of their business overlaps with yours, they may capture a significant percentage of your target customers, so you'll want to clip and examine ads from both direct and indirect competitors.
The next step in your competitive analysis is a form of mystery shopping--contact your competitors and request copies of their sales literature. Then evaluate all the ads and brochures in order to answer the following questions:
1. What are the common benefits and key selling points in the materials? This information is vital to the proper positioning of your company and its products or services, and will provide important insight into the benefits your prospects will expect.
2. What format does most of the literature take? Have you received mostly standard, tri-fold brochures, for example, or are there folders with inserts? While you don't want to copy your competitors' materials, it's imperative that your own sales literature stand up to your competitors'.
3. What are the types of services offered? Do they offer things such as 24-hour delivery, extended warranties or toll-free numbers for customer service?
4. What are your competitors' fees and special offers? Many new business owners tend to set their fees too low. Once you see what your competition charges for similar products and services, you'll be less likely to fall into the trap of underpricing yourself.
5. Is there a range of market niches being served, or are your competitors primarily going after a distinct type of prospect? Look for a market niche in which the bulk of the existing buyers match the profile of your ideal customer or client. If that particular niche is heavily served, your job will be to emphasize the unique benefits you offer and to motivate more customers to buy from you.
If you uncover a niche you believe isn't being served, additional research or market testing may be necessary before you decide to pursue it. Perhaps your competitors aren't serving this niche because they've found it to be unprofitable. On the other hand, a market that appears unprofitable to your competitors could be an unplumbed opportunity for you. After all, your vision of the kind of company you intend to build may be radically different from theirs.
Armed with the information you've gleaned from your competitive analysis, you'll be prepared to launch your new business with sales literature that motivates customers right from the start.