March 27, 2003

Getting to Know Your Competitors

"Business is a battle of ideas that play out in the mind of the prospect." - Jack Trout

The notion of positioning came into prominence in the early 1970s, with a series of groundbreaking articles by Jack Trout and Al Ries. By definition, positioning is an attempt to influence the public's perception of a product or service as it relates to competitors.

So, do your customers have a clear understanding of what makes you different from your competitors? More importantly, do you? Busy entrepreneurs often focus on the day-to-day tasks of running a business, reacting defensively to competitive threats instead of assuming an offensive stance. However, periodic competitive audits are critical to keep your company's messages sufficiently differentiated.

The process of conducting a competitive audit is not difficult, but requires some effort and usually benefits from a fresh perspective. If possible, assign the task to your newest employee. It brings them up to speed quickly, produces a measurable output, and provides you with valuable intelligence.

Step One: Define your competitive set, i.e., those players against whom you must be differentiated to survive. The competitive set will change over time, and periodic audits identify stealth competitors before they become significant threats.

Step Two: Collect as much information as possible about each competitor, including paid advertisements, sales and marketing collateral, and third-party mentions (articles, endorsements, awards). Spend time on each competitor's web site and download fact sheets, management bios, press releases, annual reports, client case studies, and white papers. Conduct secondary research using business resources such as Hoover's and Lexis-Nexis, and interview anyone familiar with the competitor's products and services. Remember that competitors change their messages frequently, and audits should always begin with a new round of updated materials.

Step Three: Analyze each competitor using the information gathered. Identify the single sentence in which the competitor describes what it does, whom it does it for, and why it does it best. Next, jot down any recurring words & phrases used throughout the competitor's marketing materials. Finally, look beyond words to get a sense of the image the competitor is trying to project. Ask yourself whether there is a comprehensive look-and-feel to the materials, or are they disjointed in appearance? Do they make good use of colors and/or visuals? What do they suggest about the competitor's personality (is it confident, professional, stuffy, casual, energetic, enthusiastic, etc.)?

It is helpful to accumulate your notes and comments in a table. This facilitates side-by-side comparisons, highlights missed messaging opportunities, and identifies words or phrases which are overused to the point of becoming meaningless (the buzzwords 'solutions' and 'value-added' come to mind). It is also a good idea to spread the exercise over a couple of days and revisit the materials periodically. Underlying themes often come into focus only after a complete review.

Step Four: Apply your newfound insights to refine your own marketing messages. Be different. Use the active voice. Avoid industry jargon. Balance style with substance. In The New Positioning, Jack Trout advises that simple does not mean unsophisticated. If your competitive advantage is painfully obvious to you, then it will be painfully obvious to your customers, too. Coca-Cola is positioned as "the Real Thing" and Avis as "we try harder." In both cases, the competitive advantage is quite clear.

Finally, make sure that your message is based on what you are able to deliver right now, not what you hope to offer in the future. Businesses often resist being niched, choosing to keep their options open instead. "Believe me," counters Jack Trout, "if you don't get niched in the customer's mind, your future options will be quite limited."

By staying on top of your competitors, you will quickly realize that marketing messages can, and should, change. That is, after all, the idea behind positioning.

Best wishes,
Ellen Grosshans