Your marketing strategy should give your business a competitive advantage and you should think widely about what constitutes a competitor – it might not be what you assume. This post talks about the different responses you need for different types of competitor and what you need to research and understand about them.
A key factor of a marketing strategy is that it should give your business a competitive advantage to keep your business ahead of the game. To achieve and maintain that competitive advantage you need to understand your competitive environment. So what do you need to know about the competition?
First of all, you need to know that it exists. Every so often I hear business owners who are absolutely certain that they have no competition. What they mean is that there is no product or service that does exactly what theirs does.
But competition doesn’t just come from products or services that are exactly like yours. It also comes from a product or service that fulfils the same need that yours does. Different competitive situations call for different responses…
An exactly comparative product or service
In this case you need to find a point of differentiation that is meaningful to your market.
A product or service that is presented as being like yours even though it isn’t quite as good
Make sure your point of differentiation is clearly communicated throughout your marketing and harness your credibility with recommendations.
A completely different product or service that fulfils the same need
If customers are spending money on a different solution altogether, it’s still a competitive situation. Don’t ignore the need to explain why your way will suit them better.
Improvising, doing it themselves, or doing without
Customers who are price sensitive might be happy to settle for a second best option. You need to persuade them to invest.
What do you need to know about your competition?
Presuming that your market isn’t taking the DIY option, you’ll benefit from understanding how competitive businesses are operating and what they are offering. Think about:
- The products or services they offer.
- The appeal of their branding.
- What their pricing policy is – include things like delivery costs if appropriate.
- Their distribution channels.
- Their promotional activities.
- Whether they offer a loyalty scheme.
- What their customer service is like.
- The culture of the business, skills and attitude of the staff.
- How innovative they are.
There are no doubt other factors – maybe industry-specific – that you would like to consider.
Remember, your point of differentiation doesn’t necessarily have to come from your product or service itself. Often it can come from the way you do business which is why it is important to consider wider aspects of how your competitors do business. Understand your competitors fully and you can find the “magic bullet” that will help you stand out.