In The Marketing Plan Handbook, author Robert W. Bly explains how you can develop big-picture marketing plans for pennies on the dollar with his 12-step marketing plan. In this edited excerpt, Bly explains exactly what you need to know about your competition so you can come out on top every time.
Do you know who your top competitor is? And if so, is it because you think you know or because your ideal clients see the business that way? How does this company stack up on the things that matter to your ideal client?
Clients perceive differences among competitors, and you need to know what your clients’ perceptions are of you and your competition. That way, you can highlight the positives in your marketing and look for ways to overcome both perceived and real negatives.
You want a clear snapshot of your competitors as they are today. But you’ll also need to stay on top of your competitors’ activities in the future. So start building files on each of your competitors now. Look for changes that pose an opportunity for you or a threat to your business.
You can start by first categorizing your competition. Who's comparable to you in their service offerings, quality of service, and price? These are your most direct competitors. Identify the top five or 10.
Don’t forget about your indirect competitors. These companies don’t offer the same service you do, but your ideal clients see their offerings as an alternative to yours. For example, two movie theaters showing the same movies are direct competitors. However, for consumers looking for entertainment, indirect competitors to a movie theater might be live theater, sporting events, theme parks, and nightclubs. They’re all vying for consumers' entertainment dollars.
Here are some questions to consider when analyzing your competition:
- What service(s) do they offer?
- What is their chief focus?
- If your niche can be divided into categories (beginner, intermediate, and expert, for example), which group do they focus on? Can you profitably target the ones they do not?
- What advantage do they offer? Don’t try to duplicate your competitors’ advantages unless you can do it better.
- What is the main message they communicate in their marketing materials? How do they position themselves?
- What is their reputation or image in the industry? Can you own a position differentiated from theirs? For instance, if they're the 800-pound gorilla with vast resources and experience, can you be the nimble spider monkey willing and able to do more? Think Avis vs. Hertz.
Next, make a list of your favorite businesses. Ask yourself why you choose to shop with them over their competitors. Is it their offerings? Quality of service? Reliability? Courtesy? Prices? What else? How are they positioned in the market vs. their competitors? What can you learn from these businesses that you can apply to your own?
Now, think of businesses that you’ll never do business with again. Why? What made you feel this way? What can you learn from these experiences and apply it to your business?
You’re trying to find a window for your business in your clients’ and prospects’ minds. Examine your competitors’ websites, press releases, case studies, articles, and other promotional presentations to identify how they position their business with clients.
Questions to ask about your competitors:
- What do your competitors do well?
- What strengths do they have? Do they offer guarantees? Strong offers? Are they financially stronger?
- What segments, needs, or opportunities within your niche do they ignore?
- What do they do poorly or less than well?
- Why do clients like doing business with them?
- What criticisms do naysayers make about them?
- Why don’t former clients do business with them any longer?
- What can you learn from them?
- What can you do better than they do?
- What do you do that your competition can’t copy or improve?
- What do you do that they can do better?
- Are they doing anything that could take business away from you?
- What trends or changes might create an opportunity for you?
- How do your competitors price their services? How do your prices compare? If you charge more for the same services, can you demonstrate the added value you bring? If you charge less, can you demonstrate that you bring as much value as those charging more?
- How do they package their service to make it most attractive to clients? (With special offers, bonuses, guarantees, payment plans, longer service hours, more service providers?)
- What weaknesses do they have?
- Do their business practices present any opportunities for you?
Here’s an example of using knowledge of your competitor to your advantage: Dave, an insurance agent, carried a line of auto insurance for teens. He advertised a deep discount on auto insurance for new drivers who got good grades in school. Unfortunately, all his competitors offer the same good-student discount. So parents often asked him why they should have their teen insured with him rather than other agents in town.
One day he wrote his home phone number on the back of his business card, handed it to a prospective customer, and said, “Your child may be out one night, have something to drink, and be unable to drive. Give him this card with my home phone number on it. He can call me any time of the day or night. If he should not be driving, I will pick him up and drive him home safely.” No other agents in the area were willing to go this extra mile, giving Dave a unique selling offer he could use to close more sales.