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Business owners know that if competition was limited to companies that have a product or service exactly like theirs, the business environment would be a friendlier place. But companies compete on solutions and their value to customers, not merely on products or services.
Therefore, properly defining your competition is a matter of perspective, and finding the accurate perspective—that of current or potential customers—may take time and extra work…but it’s worth the effort.
To figure out who your competition really is, begin by looking at your company’s value and ask these questions:
What needs do my products or services fulfill?
How else can my current or potential customers have their needs met?
What companies fulfill this exact need?
What companies fulfill a similar need?
What do customers like about their current options?
Are there gaps in the solutions that other companies offer?
How loyal are customers to their current options?
If switching is a challenge, are there improved benefits that my company offers that will help battle inertia?
Next, identify several companies that offer competitive or substitute products or services. Discover what their benefits are to your current or potential customers. Now think about how you compete against them by comparing your message, value proposition, and target audiences with theirs. Based on your assessment, develop at least three strategies that you will use to position yourself effectively against them. Now you will be prepared when a prospect asks, "What sets you apart from ABC Co.?"
Marketing Edge Consulting Group