A lot of companies have a tough time figuring out what to do when their competitors are doing something better than they are.
We came across an article by Seth Godin that spoke about this issue in the context of marketing. He said that the best way to respond to a competitor's innovation is not to copy it, but rather to do something even better than what they're offering.
As he put it:
"The easiest way to succeed is to find someone who has already done something right and then offers an even better version."
We have the same principle regarding this matter, particularly when it comes to business offers and the quality of your customer service. If your competitor is providing stellar customer service and a better product offer, then you need to find a way to beat them at their own game in order to win back customers who have been disappointed by them.
One strategy we've found particularly useful when dealing with this situation is simply asking yourself what can your company do that would make your customers happier than they are with your competitors?
For many businesses, especially small business owners, it can be challenging to determine if the competitors are doing better than you, as every business is unique and there are many factors that can contribute to a company's success or failure. However, there are a few signs that may indicate that your competitors are outperforming you:
Your competitors are growing faster than you: If you notice that your competitors are consistently adding new customers or expanding their operations, it may be a sign that they are doing better than you.
Your competitors are attracting more attention: If your competitors are receiving more media coverage or their marketing efforts are more effective, it may be a sign that they are gaining an edge over you.
Your competitors are offering better products or services: If your competitors are consistently receiving positive reviews or feedback from customers, it may be a sign that they are offering a superior product or service.
Your competitors are more innovative: If your competitors are consistently introducing new products or services or adopting new technologies, it may be a sign that they are more innovative and better able to adapt to changing market conditions.
If you come to a realisation that your competitors are doing better than you, it's important to take action. Start by analysing your own business and identifying areas where you can improve. This may involve improving your marketing efforts, introducing new products or services, or adopting new technologies. It may also be helpful to seek the advice of a business coach or mentor, who can help you develop a plan to stay competitive in your market.
What are the best methodology to run competitor performance analyses?
A competitor analysis is the process by which a business identifies its competitors and evaluates their strengths, weaknesses, opportunities and threats.
The purpose of a competitor analysis is to identify potential opportunities and threats, as well as to discover ways in which your business can better compete against your competitors.
Competitor analysis can be conducted in several different ways depending on what you’re trying to achieve. For example:
Financial analysis: One way to compare the performance of your competitors is to analyze their financial data, such as their revenues, profits, and expenses. This can help you understand their financial strengths and weaknesses and identify areas where they may be outperforming you.
Market analysis: Another approach is to analyse your competitors' market share and compare it to your own. This can help you understand how well your competitors are doing in terms of attracting and retaining customers.
Customer analysis: You can also analyse your competitors' customer base to understand their demographics, preferences, and purchasing habits. This can help you identify areas where your competitors are succeeding and areas where you may have an advantage.
Product and service analysis: Examining your competitors' products and services can help you understand their strengths and weaknesses and identify areas where you may be able to differentiate your own offerings.
SWOT analysis: A SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis is a tool that can help you assess your own business and compare it to your competitors. By analysing the strengths and weaknesses of both your own business and your competitors, you can identify areas where you may have an advantage and areas where you need to improve.
It's important to note that no single method is perfect for analysing competitors, and the best approach will depend on your specific business and the information you have available. It may be helpful to use a combination of these methods to get a more comprehensive understanding of your competitors' performance.
How to strategically implement and run the competitor performance analyses in my business?
The best way to understand your competitors’ performance is to compare your own business metrics with theirs. In this way, you will be able to see how your business stacks up against the competition.
If you look at the data from a strategic perspective, you can use it as a tool for planning and running your business. You can also use this information to identify opportunities and make decisions that will help improve your company’s performance.
Identify your competitors - Start by identifying the businesses that you consider to be your main competitors. This may include businesses that offer similar products or services to your own or that operate in the same market or geographic area.
Gather information - Once you have identified your competitors, gather as much information as possible about them. This may include financial data, market data, customer data, and information about their products and services. You can gather this information through a variety of sources, such as public financial statements, industry reports, customer reviews, and your own market research.
Analyse the data - Use the information you have gathered to analyze your competitors' performance. This may involve comparing their financial data, market share, customer demographics, and product offerings to your own.
Identify strengths and weaknesses - As you analyse your competitors' performance, identify their strengths and weaknesses. This will help you understand where they are excelling and where they may be vulnerable.
Determine your competitive advantage - Use the information you have gathered to identify areas where your business has a competitive advantage over your competitors. This may include areas where you have a unique product or service, a strong brand, or a loyal customer base.
Develop a strategy - Based on the information you have gathered, develop a strategy to compete more effectively with your competitors. This may involve improving your own products or services, targeting specific customer segments, or adopting new technologies. Monitor and adjust - Regularly monitor your competitors and the market to ensure that your strategy is effective. Be prepared to adjust your strategy as needed in response to changes in the market or your competitors' actions.
Keep in mind that running competitor performance analysis is highly beneficial when it comes to improving the longevity of your business lifetime, particularly the benefit for the longterm. By analysing the performance of your competitors, you can identify areas where they are excelling and areas where they may be vulnerable. This can help you develop a strategy to stay competitive in your market and help you identify opportunities to differentiate your business and offer products or services that are unique or better suited to your target market.