How To Perform A Profesional Analysis Of Your Competition

If you are in the beginning stages of setting up a business, one of the first things you want to do is conduct a competition analysis. Studying the competition can pay enormous dividends and save you a ton of time by reviewing their literature to see how they present themselves and what their public image looks like. Most often, a business’s literature will set forth mission statements as well as identifying their specialty services or products. Conducting competitive analysis involves two and sometimes three major activities on your part as follows:

1. Play the role of the customer with money. Call the competition in your area and talk to a representative of the company and ask them questions as if you are a potential customer who is shopping around for information. You want to use the 5WH formula (who, what, where, when, why and how—see my other article on the power of the 5WH formula) to ask intelligent questions to get answers about the strength and weakness of your competition. One of the most important things you must accomplish is to get the organization to send you their complete sales or information package that describes their products and/or services. The reason this is so important is that their literature will save you a TON of time designing your own and re-thinking everything from the ground up.

Why reinvent the wheel? Just get a wheel! And the best way to do this is to get your competitors literature in your hands sooner rather than later. Your competitions literature will also speak volumes about their public image and give you an idea and general cost figure of what it will take to develop your own literature which will be used to compete against them in the market place. Make sure you pay attention to how phone calls are answered, processed and how fast the information you request is sent to you. Can you beat their communication systems and do it better? How do their business cards look? These little things will give you a tremendous amount of insight into your own strengths and weaknesses and help you determine if you can compete with them or not and whether you will compete on price or service.

2. Call competitors outside your area—you want to call business similar to yours in markets where you will not be considered a threat when asking questions. Calling into other states can be extremely beneficial when speaking to key-man personnel about their business. When you call long distance competitors, your approach should be more straight foreword and you should tell the business owner or manager that you are thinking of setting up a similar business in your area and you are interested in their advice. Most of the time business owners or managers are more than happy to give you their input about the ups and downs of the industry, the business as a whole and give you a TON of free information. Be careful to not spend to much time asking questions though, you want to limit your phone call to 10 or 15 minutes max. One way to be highly effective at these phone call inquiries is to have 10-20 questions pre-thought out and written on a piece of paper so you can go through them bang, bang, bang. This way, you look more professional and if you ever need to call again, they will recognize you are a pro and probably take your call. If you are an idiot on the call they probably won’t take your calls again. The key is not to waste time.

3. Last but not least, you can do in-field competition analysis by either telemarketing to prospective customers and asking them if they are familiar with your competition, ever done business with them, etc. By doing this, you are also prequalifying potential customers who have not done business with your competition and you may discover an open door for a sale. Additionally, when you are out making sales calls, you can employ the same technology when talking to people and you can find out what they like or dislike about your competition. Once again, you may discover a door to a sale by identifying your point of differentiation with your competition.

I guarantee that if you try these techniques and hone your phone skills, your mailbox will be FULL of literature from businesses like the one you are thinking of starting.

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Copyright © 2006 James W. Hart, IV All Rights Reserved