It’s Time to Eat
the Other Guy's Lunch!
Find success by understanding the competition
By John Haskell
The team members of a local home electronics company were
discussing problems of the business – not just theirs, but also the
competition’s. One of the partners pointed out that customers could
be really difficult to work with. Quite often, a homeowner would
show up at his house late in the day and became annoyed because the
company's workers were just leaving or were doing things that he
didn’t know about.
This discussion led to a careful analysis of the company's
work patterns and those of competition. This home electronics
company was very fortunate that several of their employees had
worked for competitors. By understanding what the competition did
better and worse, they were able to capitalize on that knowledge and
provide better services to their customers.
In a time when customers can pick a company based on not just
price, but also service, location, or ease of doing business, it
pays to know what the competition does. By utilizing this
information, you can create value and make your business stand out.
Here are a few tips:
Get the facts about
If you don’t know
about what your competition is doing, you need to find out. One easy
way to get information about competition is to talk to them. You may
not be able to get the owner of a competitive company to open up to
you, but you can talk to their customers, other competitors, and
most important, their salespeople.
Another way to find out about your competition is to read any
articles, accolades and company information online. The company Web
site is a great place to start. Often, companies include press
releases, a media page, and even a customer or client listing on
Unique action plans
Once you know what
the competition is up to, you can address the gaps in your services
and products. For the home electronics company mentioned earlier, a
new update system resolved the problem of difficult customers. Their
system keeps each client informed daily, via an e-mail message at
the end of the day. The job supervisor or account manager sends an
e-mail update from the job site to the customer, with a copy to the
management team, advising the status of the job, the work
accomplished that day, and what was planned for tomorrow. Any issues
or problems related to the job were mentioned and referred to the
In addition, this update system was not just a major tool for
keeping customers happy, but it also helped close more sales with
prospects. The electronics company was able to outsell their
competition by mentioning their “up-to-the-minute" reporting system,
which made them more efficient and also showed accountability to
Now that you know the basics about your competition and the
way they operate, figure out how your company can outperform them.
Are there unique benefits to your company’s product or service? Do
customers choose your competition because of ease of use or time
issues? Get feedback and input from your employees to provide
solutions immediately. It may also be helpful to get direct and
honest feedback from your customers.
Use a Competitive
Matrix as a Competitive Weapon:
Another effective tool for analyzing the competition and
building programs to make your company more effective is the
competitive matrix. This simple spreadsheet is designed to
force you and your team to come to grips with the key competitive
factors in the market. Creating a competitive matrix requires two
1. Know who the
key competition is
2. Be focused on
the key elements of competition
Evaluate the vital factors of the market for each of the
companies, including yours. For example, price is always important.
Evaluate yourself and your competition on a 1-10 scale where 10 is
best and 1 is worst. If you are the highest priced company you are a
1. You are the least price competitive. If one of your competitors
is always the price leader, he is a 10. For purposes of this
discussion he is the best in the market. He may not be the best in
other things, such as profit. A 5 may be the best place to be –
right in the middle.
What other factors are important as you judge the competitive
environment? You need to determine the top 5-7 elements to evaluate
each company. It could be anything in your sales and marketing mix
such as the ability of your sales people, the sales tools you
use or your sales programs. How do
these elements compare to your competitors? It may be something as
simple as how the phone is answered. Does the company have
impressive facilities? Are your designs unique and innovative?
Depending on what business you are in, you will determine the key
independent variables that you want to use to evaluate the market.
It's all relative:
How important is each element?
The other key factor in analyzing the competitive matrix is your
employees’ evaluation of the relative importance of each element.
How important are credit terms to closing the sale? How important is
the design of your sales literature? Are your salespeople trained
and updated on all pertinent information? With each company and
industry, the answers will be different, but the bottom line is you
must use of the competitive matrix on a continuous basis.
Now that you’ve
researched the competition and determined your strengths and
weaknesses relative to the competition, go out there and do
something! The most important thing is to execute your ideas, based
on what’ve you seen and learned. This will give you an edge and help
you “eat the other guy's lunch!”
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