Get to Know the Competition A simple, 4-step competitive analysis will help you rise above the pack.
Opinions expressed by Entrepreneur contributors are their own.
Contrary to what some may say, growing a business isn't a blood sport. It's not about killing the competition or winning at all costs. The fact is, successful competitors tend to meet on a more common ground, sometimes collaborating one day and bidding against each other the next. The key to winning market share is to differentiate your company by providing products, services or solutions that your best prospects will find more desirable than what's offered by your closest competitors.
Suppose you call a new prospect and she tells you she's buying from your competitor. Is that good or bad news? Believe it or not, that's good news because it means you've found a qualified prospect. Experienced marketers know it's always easier to fill a need than to create one. Someone who is already using the type of product or service you offer is a great prospect because he or she has a clearly defined need and can afford the purchase.
The job of convincing qualified prospects to buy from you instead of your competitors' is where the real work begins. Follow these four steps to complete a simple competitive analysis that will help you uncover the information you need to effectively differentiate your business from the competition based on your own unique selling points.
1. Do some detective work. The first step in a competitive analysis is to gather your competitors' marketing tools and materials. Examine their web pages, print and broadcast advertising, and articles in which they've been featured. Request their brochures, sell sheets and any collateral materials. Depending on your industry, you may also be able to do some mystery shopping, which will allow you to experience what it's like to shop and buy from companies that sell similar products or services.
2. Evaluate "perceived" competitors. Chances are, you have a lot more competitors than you think. In addition to real competitors, evaluate the marketing tools and materials of any businesses your prospects perceive as offering a similar set of products or services. For example, a custom cabinetmaker may believe he competes exclusively with other companies that build kitchen cabinets to order. But if his prospects think of the customized cabinetry offered by major home centers as competitive products, the cabinetmaker must evaluate the way the major chains market cabinetry in his local area.
3. Focus on the message. Once you've gathered the materials, the next step is to analyze what's being communicated and how. Identify the key promises made by your broad field of competitors. And don't be surprised if you see a lot of "me too" marketing. There's so much out there that's mediocre or worse, you may find the majority of your competitors have similar messaging, with only a few front-runners showing strong points of differentiation.
After assessing the most effective messaging, look at the actual tools and materials themselves. What formats seem to work best overall? At this point, your competitive analysis will reveal whether your company is lacking any standard tools that prospects expect everyone in your industry to offer.
4. Find a unique spin. Now comes the moment of truth. You've gathered all the materials and have learned the key message points of your real and perceived competitors. It all boils down to this: How does your company meet its customers' needs in a way that is both unique and compelling? To find the answer, consider not only the products or services you sell, but also how you operate, including any company-specific characteristics, such as a higher level of customer service or free next-day shipping. If you can't find a selling point based on your current product or service offering that will help you stand out from your competitors, use what you've learned in this competitive analysis to retool what you sell and how you sell it.
