Developing a solid business growth strategy always has to start with the customer. Who that customer is and what they want and need is the first cry of every marketing agency or content professional worldwide. Extensive research is carried out finding information about customers, profiling them and often giving them a persona with a name such as ‘Dave’. Entire propositions are built, targeted and money invested in reaching that customer.
Since the early 2000’s being customer centric has been hailed as the ultimate focus for every business, and every business will tell their customers that they come first. This has now become so much the norm is it just merely noise and assumed by every customer in every industry. The speed of market entry due to the rise of digital has allowed many business to rapidly launch and market test at a low cost, almost anticipating to fail and then just ‘do it again but better’. Quality customer data is now easy to mine from social and digital insights- in 2017 we want to do research in seconds.
Lost in this cycle has been competitor profiling, actually seeing what the competition has in entirety and then defining the correct niche, identifying the right target customer and working to your strengths and the competitors weaknesses. This research takes time and companies have little patience compared to the speed of customer profiling.
“Poor firms ignore their competitors; average firms copy their competitors; winning firms lead their competitors.” Philip Kotler
In order to lead in a competing market you need information, you need insight and you need to make clear strategies whether to go head to head with the competition or compete around the fringes in a different model that gives you the edge and a market you can own.
But how much is too much?
“Strike the right balance between respecting your rivals and focusing on how you can beat them, and you’ll have a winning formula.” Richard Branson
Over the years I have worked for large corporates and I have seen entire careers and departments whose sole focus has been finding competitor data to such a degree that they self perpetuate their own existence. They strike fear into a business that if they take their eye off the ball the world may end. In today’s high-speed data and agile management arenas this is not a sustainable or competitive approach. Customers are changing fast and competitors will adapt and change with them. Therefore snapshot analysis is the way forward, two-three snapshots a year, time-bound and focused on key data points that are meaningful to that business to allow informed decisions. Essentially, we are going back to the college textbook and finding out the Strengths, Weaknesses, Threat Potential and Gap Analysis between your competitor and your business.
Here are some ideas of data sets that your business may want to collect – choose those of most value.
- location of offices, plants, and online communities
- history – key personalities, dates, events, and trends
- ownership, corporate governance, and organisational structure
- products offered, depth and breadth of product line, and product portfolio potential
- new products developed, new product success rate, and R&D strengths
- brands, strength of brand portfolio, brand loyalty and brand awareness
- patents and licenses
- quality control conformance – getting better or worse?
- segments served, market shares, customer base, growth rate, and customer loyalty, target personas
- promotional mix, promotional budgets, advertising themes, ad or PR agency used, sales force success rate, online promotional strategy, tactics
- distribution channels used (direct & indirect), exclusivity agreements, alliances, and geographical coverage
- pricing, discounts, and allowances
- marketing spend, talent in-house
- plant capacity, current capacity level, age of plant, plant efficiency, capital investment
- location, shipping logistics, and product mix by plant
- number of employees, key employees, and skill sets
- strength of management, and management style
- compensation, benefits, and employee morale & retention rates
- P-E ratios, dividend policy, EBITDA and profitability
- various financial ratios, liquidity, and cash flow
- profit growth profile; method of growth (organic or acquisitive)
WHAT HAS CHANGED SINCE LAST SNAPSHOT
- Suppliers, quality, customer service, third parties – change can signal problems or success
COMPETITION – FRIEND OR FOE?
A ruthless competitor will maximise profit, reduce costs, employ the cheapest employees, cashes out assets and makes few local business connections. Inevitably they will naval gaze to the point they lose sight of you as a competitor and this can create opportunity for you.
A smart competitor will be keeping the same eye on you as you have on them. You will both learn best practice from each other, you may end up working together rather than competing in certain areas and smart competitors encourage dialogue. This does not mean that you don’t compete head to head, its just you have better data to understand the share you can both gain, and also you can avoid the market pain that your customers may notice. Ultimately smart competitors should push you to achieve more, raise your understanding and should keep you active and dynamic.