Business is about competition. The entire idea of a capitalist society revolves around the fact that businesses compete with each other to offer similar goods or services.
Within this process, competition improves quality and lowers prices for consumers. As a business, however, it can be hard to see competition as a good thing – especially when you’re trying to get ahead in a particularly crowded market.
However, trying to outdo your competition is mainly a matter of analyzing what exactly makes your competitors different from you, and how you can use this information to your advantage. These differences can come in two forms, strengths and weaknesses, and of these two, finding competitors’ weaknesses is ultimately the more crucial – because although you can’t change their strengths, you can work to make your own business fill in the gaps that your competitors’ weaknesses leave.
The Marketing Mix
So how do you go about finding competitors weaknesses?
The first step, of course, is determining exactly who your competitors are within the market that you operate in. After this, you can evaluate weaknesses in numerous ways – but the most helpful way to do so is by utilizing the marketing mix.
The marketing mix (also known as the 4 P’s of marketing) is usually a tool that is used to construct your marketing plan – but it’s also an extremely useful method for understanding what your competition lacks. The four factors are Product, Price, Place, and Promotion – and starting with these four areas, you can systematically examine the other businesses in your market and see what you can do to attract customers by offering what they lack.
Your business exists to offer a product or service – and your competitors are there to offer the same, or a similar, product or service. The first step in analyzing weaknesses is seeing if competitors have any issues with their product, because your business can then move to improve this and thus attract more customers.
Weaknesses in the competitors’ product can come in many forms. Is their product of poorer quality? Does it break apart faster, or taste worse, or not work as effectively as it should? Perhaps there is only one aspect that is lacking – for example, a business selling air fresheners may have the perfect scent and quality, but the actual product is much too bulky and is causing customer dissatisfaction. Similarly, if you offer a service instead of a product, you can see if your competitors deliver that service poorly, or do it well but in a very time-consuming process. If you are a web-based business, perhaps other sites don’t have enough information or are poorly laid out. Depending on what you offer, you can find the fatal flaw in the other businesses’ products, whether it is an overall impression or a specific aspect.
The clearest way to finding competitors’ weaknesses is simply by talking to customers that purchase from them and getting their opinions on what these businesses are missing. You can ask your own customers if they have purchased from other businesses – and if so, what made them switch over to your own business. You can also get information straight from your competitors by analyzing their products and comparing them to your own.
Pricing is slightly more straightforward than product, because it only comes in two varieties – too high or too low. When it comes to competition, a competitor weakness is usually that their prices are too high, in which case you know how low you need to keep your own prices in order to compete.
You can more closely analyze the effect that price has on their customer retention by taking a look at your competitors’ market share, which measures how much of the total market revenue they are bringing in. If their higher prices are causing them to lose revenue, that’s a weakness – one that you can use to understand how to attract customers to your business.
Location is oftentimes just as important as product or price when it comes to winning over customers, because you can’t always expect your customers to search you out – instead, you need to make yourself known as a business. When it comes to competitor analysis, take a look at your competition’s placement of their business, and the physical and digital aspects that make this a helpful environment for customers.
In a physical location such as a store, look at the surroundings – what is the neighborhood like? Is it near any major freeways or intersections? Are there other competitors nearby? Is the nature of the business suited to the location? The nature of the business is key to the location – a luxury car dealership would most likely be placed in a more affluent area in order to appeal specifically to that market segment.
If there are any indications that your competition may have their storefront in a remote area where there aren’t many customers, or near an undesirable aspect such as a landfill that discourages customers from visiting, you can see this as a weakness and work to avoid this in your own business.
Furthermore, analyze your competitors’ physical presence in terms of the environment they offer for customers. A dental office should be clean and inviting – if it’s not, that’s a weakness. The building for any business should not be run-down or in disrepair, as that discourages patrons from coming there – if your competitors’ store is in disarray, that’s a weakness.
Online “placement” can be more difficult to determine, but ultimately, analyze it the same way as you do a physical location. Is the website theme relevant to the nature of the product sold? Is the website sleek and clean, or is it cluttered, with the most crucial information hard to find? Is the “e-business” section easy to use and are customers satisfied with it? Is the business found on all the proper directories that local search users would expect to find them on? All of these questions can be answered to see if the competitions’ website is its weakness, instead of a physical “place”.
Promotion is what most people picture when they think about competition – because ultimately, how well your business does is a function of how well you promote to customers. To see if your competitors have any weaknesses in their promotion, look at different aspects, from digital to print.
First, look at where they are promoting – are they taking advantage of social media outlets, such as Facebook and Twitter? Are they placing their banners or advertisements on relevant sites? For print promotion, are they using sources relevant to their target market, including magazines and newspapers? There’s also outside-of-the-box promotion – are they present at community events? Do they send representatives out to promote their product outside of the immediate vicinity?
Next, look at the quality of the promotion being used, as this impacts customers just as much as where that promotion is found. Read through the flyers, advertisements, or online promotions that your competitors offer – are they too wordy? Do they not offer enough special deals or sales? Are they poorly designed? These are weaknesses as well – and you can keep them in mind so that you can improve your own advertising.
Often, the way that your competitors portray themselves – or, their positioning within their target market – is one aspect of their promotion that is hard to measure. It may be that customers see the business as not very involved in community events or philanthropy, which can hurt sales. Or it could be that the customers see the business as dry and unoriginal, while another business (such as your own) may make use of clever advertising and more down-to-earth language. Try to understand how your competitors position themselves and how that may be a weakness in their promotion.
What This Means For Your Business
All of this analysis has you thinking – but what about my own weaknesses? Every business has them, and of course it’s important to understand what they are and do your best to improve; however, sometimes the things that you may see as a “weakness” of your business are actually strengths that you can use to your advantage.
For example, consider the commonly-seen “weakness” of size – what can you do if you are a small business, and are competing with large conglomerates? However, small size can actually be a strength if you play your cards right – many customers prefer the emphasis on quality service and personal relationships that small businesses offer.
Ultimately, making your weaknesses into strengths isn’t just about outdoing your competition – it’s about shifting the playing field altogether. When you truly understand what customers want and how your own business may factor into that, through something that’s generally perceived as a “weakness”, you can make your competitors work to keep up with you instead of the other way around. Try to make the most of what you have, and you may be surprised at what you discover.
Identifying your target audience(s) and just who you are competing against can be challenging. We can help take your internet marketing to the next level and help your business achieve long lasting marketing results. If you would like to learn more about how we can help you, please schedule an assessment call with our team to discuss your marketing needs in detail.
Have you used the 4 P’s in marketing to identify your competitors’ weaknesses?
Leave us a comment below!