STAYING AHEAD OF THE COMPETITION ISN’T EASY
Peering out of the massive office window of the 26th floor downtown high-rise, Steven sighs with deep satisfaction, as he realizes how far the company has come. It’s been a tough and long climb to the top of our industry, he reflected, but now we are number one. He turns and settles into the chair of his expansive desk, picking up the WSJ to scan the headlines. What he finds is jarring.
- The number 2 competitor in Steven’s industry is merging with his number 3 competitor.
- A hardware company has now succeeded in developing software that allows them to move into his market space, offering greater capabilities at a better price point.
- New governmental regulation is being considered that if passed, would greatly impact the largest industry in which his company serves.
- And his number one customer who has been with the company since inception is filing for bankruptcy, unable to keep pace with changing market dynamics.
As Steven goes from one disturbing headline to the next, his phone rings. It’s Linda from the company they’ve been doing an enormous amount of new business with and now investing significant R&D to help them get to the next level. Much to his surprise, Linda conveys their strategic direction has changed and they need changes to the pending design. These add-ons would price his company out of the market with other customers. Even worse, both knew the newly stated features were already available in a competitive product. After hanging up the phone, Steven leaned back into his chair, placing both hands behind his head and began fully taking in the business tsunami that’s just hit him.
Staying ahead of the competition isn’t easy. It’s a constant challenge that many organizations must face daily. The market is increasingly moving at neck-breaking speed. Much is attributed to rapidly changing technology, globalization, and new entrants into markets that have blurred. This is further compounded by a more sophisticated customer with greater insights into their customers’ needs to keep them loyal. So how do you stay one or even two steps ahead of the pack? Follow these suggestions:
Actions for Competitive Longevity:
Know your value and focus on increasing it with every touch of the market.
You must know what you are worth to offer that value to others. Introspection is key. Identify your best customers and those ideal customer profiles you would like to acquire. What differentiates you in the marketplace for these customer sets? What is the role you play in helping them realize their vision or meet difficult challenges? Why would your customers think you’re an indispensable partner? I’ve written about value proposition in an earlier article. It’s a subject that surfaces in practically every business topic. Spend the most time on this when developing competitive counter strategies. While this may sound counter-intuitive, the best way to blunt any competitor is to have customers never consider them. Customer satisfaction is your most powerful tool! Think to a product you have used for years and never even investigated what’s currently on the market. I’m not suggesting that is wise, but it is often human behavior. I’ve certainly been guilty of it.
Accurately and thoroughly assess your competition.
Many fail to conduct accurate and all-encompassing competitive evaluation because they solely focus on technical product competitive comparisons. While these are critical to determining competitive advantages, they certainly are not the end all. Many companies also concentrate on the ‘now’ of those products without seeking to understand pending patents, competitive products in beta testing, products being phased out and new regional or channel product rollouts (existing products with expanded or changing market direction). Other areas that help determine the competitive strength of a company and are often overlooked, include:
- Organizational structure (i.e. regional positioning; sales force manpower)
- Financial health
- Brand awareness
- Customer loyalty to brand
- Management savvy and employee engagement
- Risks aversion and other cultural factors
- Marketing strategies (i.e. promotion; price discounts)
- Channels and strength of these channels
- Physical market coverage and product line depth
- Recent or pending mergers, acquisitions, divestitures and alliances
- Percentage of industry ‘experts’ on staff
- Services available that are directly and indirectly tied to offered products
Reinvest to continuously improve your people and processes.
Nothing stays the same is an adage that continues to ring true. So, let me add another cliché to this. If you are not progressing, then you are falling behind. This is especially accurate in today’s business climate. Consistent evaluation by management, combined with employee brainstorming for ways to improve the organization and customer relationships, will go a long way to ensure that highly sought-after customer satisfaction. Choose quarterly or at least twice a year to get the management team together for business practice review. Have regularly scheduled times to have ‘listening’ sessions with your strategic customers and those you’re nurturing for further involvement. Let customers tell you how they see your business, its value and ways to improve it. Share all this information with your employees. They are your most valued asset. Without them, nothing happens. Seek their feedback.
Help your customers navigate the tumultuous waters of their markets.
Many of your customers are facing a similarly rapid and changing market pace that you are experiencing. The more you can help them understand evolving market dynamics and how best to thrive in the new environment, the more valuable you are to them. Offer customers information that increases revenue, uncovers cost-savings, enhances worker safety or reveals better ways to adhere to upcoming regulations. You will be their hero. It will take constant effort on your part to stay abreast of market trends that pertain to their business environment and to find opportunities to present solutions that only you can provide. However, it will be worth it.
Stay plugged in to threats outside of your immediate industry that stem from new technologies, modified channels or changing customer preferences.
Regularly monitor the broader business terrain for innovations that may now pose a threat to your offering to the same customer space. These threats are often not in plain sight and yet can have significant impact on the viability of your organization. Their effects can be immediate. I strongly recommend that you have on board a Competitive Analyst as part of your Marketing organization for these purposes, along with assessing traditional competition. Who would have ever predicted that Uber would be created and threaten the Taxi Service Industry?
Competition and the Laws of Physics:
In many ways, competition follows Newton’s third law of Physics: For every action, there is an equal and opposite reaction. Know that your competitors are not standing still. The bigger the threat you present, the fiercer the reaction and the stronger the actions will be to keep you at bay. Don’t get caught off guard by resting on your laurels and congratulating yourself on yesterday’s victories. Celebrate and then prepare for tomorrow’s challenges from an ever-aggressive competitive landscape. Know that competition is not all bad. It can rouse you to take advantage of enormous, yet uncertain opportunities or even propel you to leapfrog ahead. And as you pass them by, be sure to thank them. Happy hunting!
If you are in the Hampton Roads or Richmond area of Virginia, sign up for the Lunch n Learn, “Are You Maximizing Your Marketing Dollars?” on Thursday, October 19th in Chesapeake. See information below for details. Email firstname.lastname@example.org with the subject title ‘I’m Attending.’ I look forward to seeing you there!
Topics include: ‘What You Should Expect from Your Marketing Efforts’ and Marketing’s Effect on the Selling Process’