How do I stay ahead of the competition
Whether a startup or established business, you need to defend your market position and maintain your competitive edge. For the average startup, resources are usually constrained, specifically time, finances and particular skills. While there is a broad spectrum of topics one could discuss such as know your customer and/or look after existing customers, target new markets, step up your marketing, update your company image, expand the offer, or be the best employer, we will focus on just issues that the startup has to conquer to be successful. Indeed, not only success but the very survival of the company hinges on 1. Knowing everything about the competition, and 2. Differentiating your positioning in the market.
Know the competition.
Businesses need to spend scheduled time watching their backs and looking at what their competitors are up to regarding marketing, product innovation and pricing strategies.
Find out who your competitors are, what they are offering and what their unique selling point (USP) is. This will identify the areas you need to compete in, as well as giving you a platform for differentiating yourself.
Knowing what your competitors are doing is an important part of running a successful business but it's an area that many companies ignore. That's not a good idea in today's difficult market conditions when your rivals could well be keeping their eyes on you and planning how to steal a share of your business. Competitor intelligence is something few firms do well, whether big or small and for the cash and time-constrained startup, these tasks become even more onerous. However, there are some very simple things you can do to find out about your competitors.
A lot of valuable intelligence can be gathered without leaving your desk. First of all, you can visit their website and see how and where they are positioned. Order their brochure, or just run a search on their name that could bring up all sorts of things, including blogs by disgruntled staff or customers as well as positive feedback.
Many companies have a presence on community and social networking sites such as Facebook. You can keep a close eye on what your rivals are doing by joining these groups yourself.
If a company is publically listed on the stock exchange, you can get huge amounts of information on the company. Any listed company will have an investor relations section on their website where they will present their strategy and talk about what they're planning to do in the next few years, including new products and new markets they are entering.
The best source of information about your competitors is likely to be your customers. Talk to them about their perceptions of your business and others in the same area or sector. You could even do some mystery shopping by undertaking the customer journey to see what they offer and how they handle customers, although you may need to make several visits to form an accurate picture.
As consumers are increasingly shopping around for a bargain, price is becoming a big issue and it's vital to know what your competitors are offering in terms of discounts. Price is more of a justification for purchase than ever before so you have to keep an eye on your competitors at all times to see what offers and deals they are doing.
Competitor analysis can throw up some interesting findings. You may find that your competitors are not who you thought they were when you start looking at competitors, as you often find who you think are your competitors are not actually your main competitors. For example, if you have a tile shop on a local high street then you might think your main rival is the other independent tile shop up the road. But actually you are both probably competing with big out-of-town retailers as well as with online tile suppliers. In fact, having more than one type of supplier in the same area can help to bring more business your way as consumers feel they can get enough choice locally.
In fact, your competitors could be even more varied than you think. When consumers are making difficult choices about how to tighten their belts, you may be competing with totally different products or services for their spare cash. Take a young man who wants a new pair of trainers who is thinking of buying a pair of Nike trainers. Now, he won't change his mind and buy a different brand name but he may well decide to spend the money on a night out or an iPod instead.
Staying ahead of the competition is not easy but there's no point in burying your head in the sand. When it comes to your rivals, knowledge is power.
Differentiate – How to identify and promote your USP.
It's essential to give your customers good reasons to come to you rather than a rival. Your unique selling proposition (USP) should tap into what customers want and it should be clear and obvious – no one should have to ask what makes you different. A unique selling proposition is what makes your business stand out from the crowd and tells your customers what is special about you. So it's vital to get it right,
We're always reading about how many messages consumers are bombarded with every day. They cannot re-evaluate services and products every time they need to make a purchase. To make life easier, they will simplify this process by organising products and services into groups and position them accordingly - for instance, the safest car, the most expensive car and the best value car.
Understanding your target audience
Developing a USP begins with your target audience. You have to identify the group of people who will be most likely to help you achieve your business objective and be interested in your products and services. What do you know about your target audience and why do they purchase items from the market you are operating in? What needs does that market meet for them? In other words, are they looking for a time saving, some expertise, a trust-worthy supplier or something else? By consulting customers, colleagues and friends you should be able to make a list of all the reasons why someone might choose to buy your type of product or service.
What is your competitive advantage?
From this list, you should be able to pull out one or two things that you believe your organisation is really good at. Next make a list of your competitors and see which needs they are meeting. Evaluate how well they meet those needs on a scale of 1-5. Just because someone currently has a position in a market doesn't mean that they're delivering on it. If you can do it better, that's a strong basis for market entry.
Think a little broader
At the same time, you need to look at those needs that aren't being met and also think about the key trends in the industry. If you are an accountant, for instance, these trends could include changes in legislation for example. Consider current trends and those issues that will be most important in five years' time. Now see if you can extend your advantage into these areas.
Testing and refining your USP
You should have three or four possible approaches now - key benefits that you provide relative to your competitors together with reasons why consumers should believe you. Come up with a strong statement that conveys each USP. You could also give each idea an image to help bring the concept to life. Talk to five or ten potential customers to get their feedback on the different ways you are positioning your brand.
The results of these interviews should help you to choose the positioning statement that was of most interest to your target audience. You should also choose the single most compelling reason for that positioning.
Communicating your USP
Your USP should be driving the development of your company and your marketing strategy, whether you are creating a website or a logo or embarking on an online advertising campaign. Always ask yourself if your image and activity clearly communicates the benefit you are offering.
It's not advisable to change your USP too often but it is important to keep it fresh. Watch out for any shifts in trends or competitors that cause consumers to view you and your USP differently. It's important to keep abreast of industry trends and talk to your customers regularly.
Look to the future.
Businesses that plan for growth are more successful than those that are happy to stay still. Keep up with developments in your sector, follow consumer trends, invest in new technology and - crucially - have a clear idea of where you want to be in one, three and five years' time.