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Be Smarter Than Your Competition

lightbulb gearsEvery business has competitors. And if you are in business, making money and don’t have competitors, just wait a bit. You’ll have them soon enough.

Understanding who you are competing against is essential to your success as well as to your peace of mind. While it is important to understand competitors, it may not be advisable to imitate them, but without at least having a good look at who they are and what they are doing, you will always be left wondering.

Be open to thinking of competitors a little more broadly. In some cases, it’s obvious who they are. In the current laptop market, Dell competes with HP, Samsung and Asus and they all compete with Mac. Ford competes with Toyota, Honda and Buick. McDonalds competes with Burger King. The local hardware store competes with Home Depot.

But in some cases it might not be so obvious. For example:

  • A home improvement company might be competing with a homeowner who chooses to install new kitchen cabinets him/herself.
  • A non-profit seeking donations of used clothing might be competing with a second hand store that buys used clothing.
  • A local gym might be competing with a dance studio for customers looking at options for physical fitness.
  • A television station might be competing with YouTube.
  • A personal accountant might be competing with the option to use a cloud based personal finance program.
  • And every business competes with a customer’s potential decision not to buy at all.

The point is, being open in your thinking about who your competitors really are can give you a much broader view of your existing competition. In other words, a more holistic view. And once again, a little critical thinking can help you really identify all possible sources of competition and make informed decisions about what, if anything, can be done to counter their effect.

When I create a marketing plan for my clients, I like to include an at-a-glance chart that ranks several key competitors in certain important areas.  It’s an easy way to put some relevant information in one place and to see where you might stand compared to your competition.

Here is an example from a plan I did for a client in the residential health care business. The numerical values are to some degree a matter of opinion, but the real usefulness of this tactic was in going through the exercise with the client. It forced us to discuss the strengths and weaknesses of their competitors (and of the client as well) and come to an agreement on the scores. Since the client was new entrant into the market and had just opened their first facility, it was expected that they would score lower than established competitors, but it was useful to see where improvement was needed and how much work they had to do. Now, only three years later, the client has opened their fourth facility with plans for more on the way. The names of the client and the competitors have all been changed to protect privacy, but it is a real life example that proved quite useful.

Competitor Comparison Chart_2Again, I do want to emphasize that learning about what your competitors are doing in the area of marketing does not necessarily mean you should imitate that same tactic. Imitation might be advisable, and it might not. Always keep in mind the holistic approach and critical thinking, and apply it to your analysis of your competitors as well to your own business. For example, if one of your competitors has full page ads in all the big newspapers every week, does that mean you have to do the same? If they have been in business for 20 years and have a multi-million dollar advertising budget and your business is just getting started, well then, the answer should be obvious. Always look at the whole picture!

Want to learn more? Check out Holistic Marketing in the Digital Age

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