Know your strengths

Unless you are the government or a monopoly, which is somewhat rare, you are going to be out there competing for a share of the wallet (or purse). If you are to be successful, you really should understand what your competitive strengths and weaknesses are so that you trade on your strengths and avoid being confronted by your weaknesses. Basically, you have to know what your competitors are up to.

No one ever said business was easy or without its risks, but imagine running a business without keeping tabs on your competitors. Surprisingly, lots of business people do and they wonder why they simply can’t make any traction in their business. It can work in limited situations where you have no local competitor, but few of us have that luxury.

The whole nature of business is to carve a path for your business where you get some competitive advantage. Staying still while your competitors are changing simply asks them to come and take away your business. You need to constantly monitor what they are up to and review what they are offering in your market so you can adapt and find new points of difference.

What we tend to forget is that customer value is composed of many components, not just the obvious functionality of the product or service. Even if you have a product which is identical to your competitor, you still have many choices as to price, location, customer service, accessories, after sales help, complementary products and so on. There are numerous ways in which you can create a point of difference but you need to be proactive in doing so and nimble enough to change when competitors get close. Without a point of difference, you will end up competing only on price.

There is nothing wrong with asking customers why they bought your product rather than the competitors. Similarly, ask those who bought your competitors’ product what they liked about the item they purchased. You need information to make a judgement on what you should be doing next. This should not be entirely guesswork. You will always get surprises as they introduce new features and functions, but there is little excuse for not knowing what they have in the market now.

Be careful how you play to a competitor’s weakness. I know lots of salespersons who have been caught out by criticising the competitor only to find out that their new product has fixed a weakness. Customers react negatively to this. You should be trading on your strengths. If you select your prospects properly, they should be the ones who have the highest need for what you do uniquely or well. Let the prospect find out what your competitors don’t do well.

To pick your target market and aggressively market to them successfully, you do need to have a good understanding of what your competitors do well and not so well. At the end of the day you want your marketing and sales resources to be used effectively, understanding your competitors’ strengths and weaknesses is fundamental to that objective.

Tom McKaskill is a successful global serial entrepreneur, educator and author who is a world acknowledged authority on exit strategies and the former Richard Pratt Professor of Entrepreneurship, Australian Graduate School of Entrepreneurship, Swinburne University of Technology, Melbourne, Australia.