Paul Munnery: How to research and beat your competitors
To survive in business you have to be better than your competitors. But the truth is, you don’t have to be a million times better - even just 10% will do. We spoke to Virgin StartUp mentor Paul Munnery to get his tips on how to beat your rivals. Paul is a business coach and entrepreneur and has mentored businesses in over sixty sectors.
“In your business plan, have you researched and planned for marketing and selling against your competitors? Do you know who they are, and how specifically your business will compete against them? If not, then you’re losing out; How your business markets and sells its products or services in the face of stiff competition will be a key factor in your success.
Apart from a basic marketing analysis that takes a cursory look at competitors, many startup companies don’t attach enough importance to understanding their competitors and the threat they pose to the success of the business. You need to properly research and find out who your competitors are and what they are up to - then develop a strategy to win business against them.
In marketing terms, your potential customer will have a need that you can satisfy with your product or service - but then - and here’s the problem - so can your competitors! The reality is, like it or not, your prospect will also be talking to your competitors.
Having established who your competitors are, find out what they promote as their unique selling point(s) and how their products or services, prices and value compares to yours. From which competitors are your target customers currently buying – and, most importantly, why?
You may need to research tens of competitors in order to establish who your main competitors really are. List them in order of the size of threat they pose to your business, and keep up to date with their marketing messages; social media can be useful for this.
Let’s think more about how you sell.
Your sales proposition
Once you’ve established how your main competitors market and sell, what they say to prospects and the unique selling proposition(s) they push, you should be able to ensure that your own proposition is better than theirs, or at least more relevant to your prospect.
Creating a proposition that is better than your established competitors is not going to be easy. However, it will help if you remember this: You only need to be 10% better to win the order.
This means that your product or service doesn’t have to be amazingly better than your competitors to get the attention of the prospect; it only has to be 10% better. That can mean 10% faster, larger, smaller, cheaper, delivered 10% more quickly… whatever gives you the edge. The more features that are 10% better, the more likely you are to beat competitors to the order.
Too many start ups think that to win the order against competitors, they have to offer the lowest price. If you can, then good for you - but for many businesses, this strategy is a race to the bottom. In most markets there is almost always a competitor that can beat you on price. So don’t go there; you need to work smarter than that.
Here are a few alternatives to competing on price. They may not all apply to your particular product or service, but a few will:
Quality. Higher quality always helps justify a higher price.
Safety. Customers will often pay a premium for a product that is safer to use.
Speed. A product or service that saves time can be worth more than one that doesn’t.
Green. Some customers will pay a higher price for ethical, sustainable and recyclable products or services.
Better service. Giving excellent service, being polite, and building good relationships with the prospect is something that small companies can do really well, and that larger companies very often don’t.
In each case, be sure to communicate clearly precisely how yours is a higher quality, safer, faster etc. than that of your competitors.
Throughout the life of your business most, if not every one of your prospects, is also going to engage with your competitors - so it’s vital that you pay serious attention to them.
Here’s a simple tip for ensuring that you never forget about your competitors, and reminding you to give them the attention they deserve. At each monthly management meeting, ensure that one of the agenda items is ‘Competitors’. Discuss what they’ve been up to this month, so you can continue to stay ahead of them.