Not every enterprise wants to get all buddy buddy with its direct competitors. But a little familiarity can help you know exactly what your rivals are doing right – and what you could be doing better
Depending on your outlook, in modern business competition is considered either the lodestar to steer your ship by or a bit of a dirty word. Perhaps – given some associations with the cut-throat business practices of the past – the latter may be understandable but there is no denying that we are all operating in a competitive marketplace. Attracting customers often involves creating a more inviting service proposition than other enterprises – which means that knowing of your rivals are doing is absolutely vital.
Even for businesses who don’t want to focus too much on competitive concerns, awareness of the market forms an essential part of forming a brand and assessing its potential market value. “When you start a business, that’s one of the first things you do,” says Adam Goff, founder of professional houseshare provider Capital Living. “Try to understand the competition and where you’re going to fit in the marketplace.” Whether this is practised in a low-tech way, investigating their services from the perspective of a consumer, or by using available analytics information to dissect their market position, it’s not too hard for an enterprise to build up a broad map of the market before their own name is even registered.
It sounds obvious but to work out how the competition is serving a given marketplace, it’s vital an enterprise knows the exact requirements of its market and what concerns most motivate its buyers.
“Intelligentsia Worldwide’s recommended approach is for companies to first understand their target business decision-makers’ weighted buying criteria,” says the market intelligence firm’s chief executive John Pearson. Understanding what motivates purchasing decisions will be a fundamental element of any business plan and will lay the ground for understanding how well other enterprises are meeting this demand.
However, reducing competitor analysis simply to a numbers game isn’t too clever. Ultimately, despite the fact that it runs counter to conventional logic, when companies are locked in a price war, there is rarely a value payoff for the consumer. “It’s woeful to compete on price,” comments Goff. “If you have to compete on price then it’s a sign you really are struggling.” Consumer sophistication is at an all-time high and few customers are likely to be won over by bargain-bin prices alone. Which means that competition is about offering something that your rivals don’t, rather than simply offering it for a budget price.
Fortunately, the real strength of competitor analysis is not to aid businesses in scraps over similar service provisions but to identify opportunities that currently aren’t being met. Pearson explains: “The skill of competitive marketing strategy is to spot a gap, i.e. a combination of buyers’ needs that are poorly served, and then to develop a differentiated proposition to better serve those needs.” Using what you know of your competitors to establish differentiators is a much healthier way of approaching competition, not only promoting market diversity but also making it easier for consumers to grasp exactly how your service is better positioned to serve their needs.
You know what they say. A little competition never hurt anyone. And when employed in the right way, competitive concerns can actually do a huge amount of good for your target audience by identifying areas in current service provisions that are lacking. But keeping abreast of what your competitors are up to doesn’t mean you need to have a set-to over every mutual offering. Instead, it’s a vital opportunity to test what you’re delivering and find ways you can improve.
Capital Living, Adam Goff, founder
It’s very easy, if you’re a dodgy landlord, to treat tenants badly and get away with it because they can’t write about you; they can’t give you a bad review on TripAdvisor because you aren’t an entity. Buy-to-let properties are typically quite run down and cheap. Inevitably, you’re looking at properties that aren’t loved – they weren’t homes. The little things, such as being freshly painted or looked after, all the little details in the house sorted out and nice furniture. These little things are left by buy-to-let investors and renters; there’s no pride of brand attached to it. It’s just a numbers game to them.
For me, it was very much spotting that. When I looked at this market, I was focused on building a brand and a reputation that we’d stand behind. I saw such variation in products. I didn’t understand why, if you rent a flat, you go and look at five wildly variable properties. Now, when you look at us, you get a standard. People look at a house with us and then they’ll go away and three weeks later they’ll rent another one because they know the bed they’re getting, the furniture they’re getting, the colour scheme.
Do I know what my competition is doing? Yes, I do. Do we alter the product we give based on what the competitors are doing? Yes, we do – if we stood still we’d lose people. But, more importantly, we invest a lot in our brand. That’s really where we’re pushing the bar and where we’ve found a bit of a gap.