Competitors

This article was contributed by Geoff Clynes. Geoff is a partner is Business Line, a Warragul-based marketing group offering help and advice on business development issues. This article is the third in a series of eight.

The theory of our free enterprise economy is that competitors sharpen our skills, improve quality, drive service standards higher and keep us working to make the best offer to our customers. Or else we run out of customers: they take their business elsewhere, only the best business survives, and that’s a benefit to the society.

As people started focusing on added value and customer service in the eighties, we could have predicted that all those competitive pressures would multiply and get less visible. Well they have, so protecting my patch and making new friends are getting harder all the time as they do. It’s time to look again at the whole idea of competition.

Another thing about the push to added value in the eighties: it meant the end of price competition as a primary strategy because people found the cheapest buys carried no service, and discovered that service is valuable, and some kinds of service are priceless. As a customer, you don’t buy a wedding present at the Warehouse, and you probably don’t buy aspirins at the pharmacy any more. As a trader, your price has to be comparable, apples to apples, but only a mug trader puts price first these days: because only a mug trader puts margin last. Compete on some other basis: leave price-cutting to the chains and Supermarkets.

In practice, most of us believe we don’t have any direct competitors, and so we often wonder why it’s so hard to persuade new customers into the shop, and so hard to hang onto those we attract once.

Perhaps we should look further than the business and structure, the products and industries that look a bit like us, or deal in the same markets we do, or offer similar solutions to what we do. Maybe we don’t recognize the real competition?

Try this:

Start with a detailed picture of your ideal customers. They don’t buy from us now: but they DO spend that money. Same as you and me, same as almost everybody, they end up with no cash to spare.

Where do they spend that (or a similar amount of) money now? Doesn’t matter whether it’s on waste removal, anti-depressants, the pokies, gourmet food..

Some suppliers are taking your money from those ideal customers NOW.

For all practical purposes, those suppliers are your competitors.

Now put it to use:

Pick the competitor you think is most frequently "eating your lunch" now. Think through the alternative spending choices from your ideal customer’s point of view.

Build a sales approach to press your benefits as a better buy than those of that competitor. You might need a special offer of some kind to catch attention.

Use that approach the next ten times a prospect wants to "think about it".

What happened?

Then go through that sales planning process for your next most frequent competitor.

And so on.