Best Practice: Who you are competing against is a better understanding of who your customer is, what they want, how they want it & competitor strategies.
Today’s Article: Competitive Analysis – Know Your Customers – Know Your Competitors
Do not operate the business in a silo or vacuum: Know Your Customer – Know Your Competitors.
Know Your Customer
Who you are competing against is a better understanding of who your customer is, what they want and how they want it.
Who is Your Customer? By completing the customer analysis with a customer profile including demographics, psychographics and generational characteristics you will have a better understanding of who your customer is, what they want and how they want it.
Know Your Competitor
Make a list of your top three competitors. If you do not know who they are, go to your computer and type in what you sell. If you sell locally, regionally or in a state, type that in as part of your search. Example: Coffee shop Asheville, North carolina.
Once you have the top three, go through this process.
1. List competitor’s name
2. What category is each company name in? (Literal, Attribute, Legacy, Letter/Numbers, Invented, Related or Interpretive)
3. Review each competitor’s website or online presence.
4. If they have a tagline, write it down. (Short phrase that appears under their name on each web page)
5. Are they direct or indirect competitors? (Direct competitor sells what you sell in the same way – example coffee shop verses coffee shop. Indirect competitor sells something similar, but not the exact way – example coffee shop versus fresh coffee sold in a grocery store.
6. Who do they sell to? B2C (business to consumer), B2B (business to business), B2G (business to government)
7. What is their pricing strategy? Below Market (low price), At Market (more values higher price) or Above Market (luxury, status, prestige)
8. How do they market their company? Traditional (TV, radio, print, direct mail, etc.) versus Internet (website, social media, eBooks, online newsletters, etc.)
After doing the customer analysis and competitor analysis, you have enough information to start looking at creating your brand or rebranding process. You want a brand that customers will connect with and trust.
Old Competitor Paradigm: “Keep your friends close, and your enemies closer.” Competitors were enemies. People to compete against, not to partner or collaborate with.
New Competitor Paradigm: Today what you are competing against is a better understanding of who your customer is, what they want and how they want it. The more a product or service meets this understanding formula the more competitive the business is. In a race, it is best to focus on the prize in front of you versus looking over your shoulder at how close your competitor is. The prize is the customer.
The reason it is smart to regularly review competitor’s marketing is for ideas and trends that you may have missed.
Under this new paradigm, one option in your marketing tool kit, is to look for ways to partner or collaborate with competitors. An example would be co-op advertising.
What is co-op advertising? Co-op or cooperative advertising is a cost-effective way to reach target markets. Co-op advertising cuts down on your media costs, ad production and creative expenses. A number of businesses share a larger space or full-page ad, made up of individual smaller ads on the page, to reach a target market.
Example: The full-page promotes a theme, such as to visit or shop downtown. The promotion is made up of smaller ads of downtown merchants or restaurants grouped under the main promotion theme. Individually a business may not be able to afford the full-page impact, but together they can at a lower individual business cost.
Action Step: Write down your top three competitors and answer the eight questions above in describing them.
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