“We don’t worry about the competition. We just worry about being the best we can be.”
Honestly, that sounds really awesome.
It’s also, honestly, the worst advice I’ve heard in awhile. Customers are constantly bombarded with offers and better offers in a desperate flurry to “win the sale”. And let’s not pretend that humans aren’t constantly shopping around.
Still, you’d be surprised at how many companies take an “ignorance is bliss” approach when it comes to competing for the attention of their target audience. But let’s take the same advice and apply it to a couple different situations:
- A coach who doesn’t watch the other team’s game tapes to beat their strategies
- A general who literally doesn’t care about the enemy’s numbers or weapon advantage
- The world assuming that Ronda Rousey would beat Holly Holm in an MMA ground game (when Holm is actually kick boxer – wasn’t pretty)
Now does it sound ridiculous? Well it’s not an awesome business strategy either. Here’s why:
You’re Uninformed
Is your competition light-years ahead of you in customer service? Does their technology offer a cleaner experience? Clearly, you wouldn’t know. You could be hemorrhaging customer satisfaction ( = revenue) without even knowing the reason why.
You’re Unprepared
Ok, the competitor landscape might look good for your business now, but what about in 5 years? Will you still be the “Largest Credit Union in the East Valley”? Is someone else gunning for your spot in the “Top 5 Law Firms in the US”? You may not think your competitors will impact your business down the road, but that’s an attitude that will see you blindsided and scrambling for a solution.
You’re a Non-Event
What’s a good way to tell if you look like everyone else? Look around and see how everyone else looks. Then take a look at yourself.
Do you look the same? If so, potential customers won’t be able to tell the difference between you and the competition (in colors, fonts, slogans – even names or logos). You’ll find yourself competing on price…and nothing else.
So, now that we’ve established that ignorance is NOT bliss…
Let’s take a look at some ways to get started on a competitive analysis. Ask the right questions:
- Who are some of your competitors? List both large and small ones. Are there major categories they fall into?
- What do you feel you are doing better than your competitors? What do you feel they are doing better than you?
- How big of an impact do you feel your competition has on your target audiences? (i.e., Are they reaching your potential customers with their marketing messages? How well?)
- What do you think clients find different or interesting about your company, compared to your competitors?
- How do you think the situation will change over the next 5 years with respect to your competition? What do you worry might happen? What do you hope might happen?
Once you have a feel for your competitors, look for groupings/trends in their branding and marketing.
- How big are the companies?
- What do the companies say (or allude to) as their primary markets (including location, services, and/or industry focus)?
- How do they refer to themselves?
- Do they have a tagline and if so what is it?
- What does their logo look like and what are the primary colors they use in their brand identity?
- What is your initial reaction to their website’s homepage? Does their brand feel coherent? Do they communicate well? Does their website draw the visitor in?
- How well are they doing with search engine optimization for their website?
Important Note
Here’s what I’m not saying: follow every move your competitors make and then copy or one-up them (in fact, I would advocate quite the opposite). Decisions for your business should always be made based on your values, your mission, your team, and your customers. Competitive analysis is just another piece of info that should inform your decisions, not make them for you.
For example:
Take a look at your competitors’ names when picking your own. Are they all similar? Is there a reason for that? Is that reason compelling enough for you to follow suit, or should you choose something completely new in your industry?
Is everyone talking about their amazing customer service and experienced team? Big surprise. Talk about something else.
No firm is going to say, “we have inexperienced staff” or “we’re not the most responsive bunch”. – John Tyreman, Research Manager, Hinge Marketing
How about colors? If everyone in your industry is using blue and grey…why not try purple?
Most importantly: stay true to your company’s DNA (the brand). Be informed by the data, but don’t conform to it.
Check out how you’re doing on competitor awareness with our Brand Maturity Assessment: https://resoundcreative.com/tools/assess-your-brand/
