Three Clever Ways to Know the Competition Better

What is the secret to success in business? That’s easy! It’s how well you know the competition.

Alright, maybe this is a slightly over-simplified perspective, but it always surprises me how many companies work with a primarily internal focus.

I have written many posts about knowing your customers, such as “Why Customers Are The Answer To All Your Problems (If You Ask the Right Questions).” Watching and listening to them in order to fully understand their rational needs and emotional desires is a great – and free! – way to start.

But today I would like to speak about doing exactly the same thing for your competitors. If you are going to succeed in attracting their customers away from their products and services, then it would make sense to know them as well as you do your own.

Here’s a simple three-step process to do so. 

 

Encourage employees to use competitive products & services

Know the competition better by trying their products and services.In most organisations today, using competitive products is still frowned upon; after all, we make the best don’t we, so why use those of other companies?

However to challenge and beat the competition you have to intimately know what you are up against. Regular contact with competitive products will encourage your employees to evaluate your own offering. They will also be encouraged to suggest competitors’ strengths and weaknesses that were perhaps not evident before. It will also ensure that you are rapidly aware of any improvements made by the competition. You won’t get left behind and find yourself suffering from declining sales due to competitive improvements of which you are unaware.

This intimacy with competitors’ products and customers should be requested of employees at all levels, by being one of their annual objectives. Of course, in some industries this might not be possible, due to the selective nature of the product or service, but certainly for most consumer products and service companies, this can easily be done on a regular basis.

Now encouraging people to use competitive products is easy to say, but you should also be prepared to invest in it, by paying for your employees to experience them. It would be unfair, and would certainly be resented, if your people had to spend their own money to make such experiences. This knowledge gathering should be seen as an investment by your organisation, of at least equal value to offering your employees discounts on your own products and services.

Why don’t you start a similar process and add these experiences to everyone’s annual objectives? It’s a great way, and a free one at that, to know the competition better than you do today.

 

Make a Library of Competitive Products and Material

KNow your competition better by sharing what you knowIn one of my previous positions, the company had an incredible competitive library. This included every single competitive product that was available from all around the world, classified by country and organised by segment.

Everyone found this library extremely useful, especially when discussing such topics as shelf impact, packaging or in trying to understand our competitor’s portfolio strategy. Continue Reading

Beat the Competition Next Year (Higher growth, profitability, innovation)

After the mid-year break – and this year it started way sooner thanks to covid-19 – most organisations get into their planning phase for the coming year in earnest. Do you know how you’re going to beat the competition next year? If not, then this article will set out some clear priorities.

Although business plans are usually developed and approved in the middle of the year before the vacation period starts, it is only afterward the seasonal break that the real work begins. So what have you promised your top management? Faster growth, increased profitability, or more successful innovations?

Whatever is in your plans, now is the time to review them and decide the very best strategies and tactics for meeting them. Let’s take a look at each of these objectives and see how best to meet them.

 

Higher Growth

As you know, there are basically only three ways to grow your sales:

  1. Get more people to buy
  2. Get people to buy more
  3. Get people to buy more frequently

What you may never have noticed before when reviewing these options, is that all three approaches include the word “people.” And it is only by understanding them better than you do today, that you will be able to grow your business tomorrow.

So, how well do you know your current and potential customers? Do you know what they think about your current offer? Do you understand their needs, desires and dreams? Do you recognise what they really want but can’t even themselves articulate? Uncovering these are what will give you a clear competitive advantage.

Of the three strategies, the first seems to be the one that most organisations immediately think about when looking to grow their business. They go out looking for new customers by increasing their distribution channels in the hope of getting more people to buy. But that costs a lot of money, doesn’t it?

CPG (consumer packaged goods) companies on the other hand, frequently encourage their customers to buy more through promotions and discounts. This too takes a large portion of their budget.

However, it is now well documented that it is easier to increase sales amongst your current customers than it is to go out and attract new customers to buy.

A 2015 study by  Price Intelligently showed that a 1% increase in customer acquisition impacts your bottom line by around 3.3%. But improving your retention rate by 1% affects your bottom line by around 7%. In other words, it is twice as profitable to retain a customer than to acquire a new one.

“It is twice as profitable to retain a customer than to acquire a new one.”

Even if you replace every customer who leaves by a new customer who buys, you end up with the same number of customers—but lower margins–because it costs far more to gain a new customer than to keep the one you already have.

According to ThinkJarCollective, it is six to seven times more expensive to attract a new customer than it is to retain an existing one. Continue Reading

I hope you enjoy reading this blog post.

If you want me to catalyse your growth and profitability, just book a call.

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