An article posted a couple weeks ago at the New York Times gracefully details the rise and fall of six companies that had started between 1996 and 2008, all of which closed up shop in 2010. Unfortunately, many of the failures were a result of the economy and therefore couldn’t have really been predicted, but I find it surprising that half of these stories involve some kind of defeat by a competitor who simply ‘does it better.’ Ouch!
Culminating all six of these stories, there are a few clear trends that can be acted upon by us as business owners entering 2011. To start, here’s one way to avoid the heat that melted these companies: Know Your Competition. Basically, learn about your competitors as though you were a typical consumer, looking to hire or purchase from them. Pay attention to find the areas in which you think they’re on the right path and areas where they’re probably losing ground. Remember that something that differs from your opinion or the way you do business may not be wrong—you’ll often benefit from heeding new ideas!
From Tim Berry of Entrepreneur Magazine:
- Shop your competition.
Depending on what business they’re in, you can probably call them, visit their offices and perhaps buy from them. Get a price list. Listen to their pitch. If it’s applicable, count the cars in their parking lot. Count customers coming out of their store, both with and without purchases. - Talk to their customers.
What do their customers like or dislike about each competitor? Why and how do customers decide between one competitor or another? [Honestly, people will often give you this information freely, whether they're hoping you'll offer something better or they're looking to boast about the services or products they receive. Testimonials are good only for specifics; of course they'll all say glowing things, so read testimonials only to gain insight about what the company is doing well.] - Purchase credit and background reports at Dun and Bradstreet’s website.
[It costs $119 right now to get a full report on a company, so this is only for those competitors that represent huge losses for you. Also, it may not be exactly the information you're looking for.] - Small or not, local or not, check your competitors’ websites.
Study them carefully. Many companies offer an abundance of information about themselves on the web. Do they offer their products or services in an online store? Or do they simply provide information only? Do they have a price list? What are they emphasizing on their site? What do they say about themselves? What conclusions can you draw? Their websites are a great source of company information. No website? That’s interesting competitive information as well. - Do a thorough search of the internet, using your favorite search engines.
Besides their own site, you want to see where else your competition turns up. Maybe they don’t have their own site, but they’re listed on other sites or have a store in an online mall. And maybe you can find press information on them, articles that profile them or offer information on changes they may have gone through, such as store openings or hiring a new CEO. The web is amazing in what it can reveal.
From Kim Gordon of Entrepreneur Magazine:
- Evaluate “perceived” competitors.
Chances are, you have a lot more competitors than you think. In addition to real competitors, evaluate the marketing tools and materials of any businesses your prospects perceive as offering a similar set of products or services. For example, a custom cabinetmaker may believe he competes exclusively with other companies that build kitchen cabinets to order. But if his prospects think of the customized cabinetry offered by major home centers as competitive products, the cabinetmaker must evaluate the way the major chains market cabinetry in his local area.
From Rich Harshaw of Y2Marketing:
- Consider the appeal of not doing anything a competitor.
To wrap up the parts of Harshaw’s long article that focus on “inertia” or the draw for a prospect to not take any action, you want to view this inaction as a competitor, too. Prove yourself better than the direct and indirect competition; but also prove yourself good enough for the prospect to make a move and not be lured away by the potential to save time and money by ignoring their need for you altogether.
From JK Harris of Entrepreneur Magazine:
- [Recognize] products and services you don’t offer and haven’t thought about offering.
You’re also competing with the businesses that are meeting the needs of your customers with products and services you don’t offer and haven’t thought about offering, and the businesses that might make your products obsolete. You need to know who all your competitors are–not just the obvious ones, but the ones flying under the radar as well. - Use programs like Google Alerts to track what’s said about them online.
[TweetDeck and others can be set up to notify you when competitors are mentioned in tweets.] - Be prepared to cooperate and collaborate when necessary.
If something is going to have a strongly positive or negative impact on your industry, reach out to your competitors so you can join forces and take appropriate action. Depending on your particular business, you may also find that competitors can serve as backup resources. For example, you might get an order that’s too big for you to fill alone.Or if a competitor suffers a disaster of some sort that prevents that company from serving its customers, you can step in and help out.
It’s easy to put your blinders on and stick to what you’ve been doing, but don’t let it take you down. And don’t be bothered if these methods seem shady to you: If your competitors know you’re there, they’re probably doing the same things to keep tabs on you! Just be honest in your approach, and don’t be afraid to try something new. Read the NYT article here.
Tax time isn’t much fun until you see that strangely beautiful check made out in your name from the federal and/or state treasuries—if you’re even that lucky. Contrary to what we’d like to think, the goal for most people shouldn’t be to get the largest refund check possible but to get very little and pay nothing. A large refund check means that for the past year, Uncle Sam has been hanging onto your money, interest-free. You have to pay interest when you borrow from your bank or from the government, but the government doesn’t owe you any extra for the privilege of using your money over the past year.
