Sports teams scout their opponents. They have full time couches who watch the other teams games, break down films and try to predict not only what the opponents have done but what the opponents are likely to do when the team comes up against their own team.
In business you need to do similar things. You can shop the competition. If you are in the retail business it is easy to visit the competition or if they know who you are to send in a secret shopper to look at how they handle customers, what products they have, how is their pricing compared to yours, what is the value of their product, what advertising are they doing, are they having a sale, do they have loyalty programs etc.
If you are a wholesaler you can still shop you competitors on line or by phone. Look up their product. Buy samples if necessary and compare them to yours. Look at the quality of the product, the price and the service. When you compare them be careful you are doing so objectively. It is easy to be sold on your own product.
If the competitor has an advantage are there ways to overcome that advantage. If the product is better what can you do to match the quality? If a competitor is getting an advantage because their warehouse is closer to the customer can you offer same day shipping to overcome the advantage? If the competition has better customer service what can you do to improve your customer service? It may be as simple as setting policies or training your customer service people. It may also be as simple as changing the people doing your customer service to people who enjoy working with customers. A pleasant voice and a good attitude go a long way to solving customer service issues.
If the competition is beating you with a lower price look at how they have created the product at a lower price. Is their product of equal quality? If the answer is no then you need to market the features or benefits that makes yours better. If you cannot compete at the price you need to maintain your quality, can you lower your standards to match the competition without damaging your company's reputation? I know of a window company that was at the top of the window industry. To meet competition they produced a lower price line of windows but they used the same brand name. They lowered the value of their high end window when the brand began appearing on lower priced homes. The brand advantage only lasted for a short time because consumers quickly understood that the lower priced windows whatever the brand were not better than the competition and the high end consumers began to associate the brand with lower priced homes. The window company lost both ends of the market.
There is always someone willing to sell a product like yours cheaper. Make sure you are shopping the right competition and making efforts to distinguish yourself for those price only companies.
Do not rely on your customers or worse you leads to tell you about the competition. They may have an agenda. If they quote a price at which they are buying they may be trying to lead you to an unrealistic price. They may also be telling you they are buying at a lower price because it is easier than telling your sales person they do not like your product or even that they do not like the sales person. If they tell you they know your product is better but they cannot sell your quality to their customers or that "the customer does not care" can you give them sales materials to help them sell your quality? If the customer does not understand the value of your product, can you cost effectively do advertising to raise that awareness?
You need to scout the competition and understand what they are selling, at what price and what their services are so you can compete. Not necessarily match but compete.
Original Content copyright 2010 Thomas Robinson
No comments:
Post a Comment