Business Success: Know Your Competitors.
A Comprehensive Understanding Of Your Competitors Will Enable You To Run Your Business Better And To Boost Your Business Sales And Profits.
My first business was a public house called The White Hart Inn in a nice Somerset village called Trudoxhill near Frome in the U.K.. The business was very run down with just a few 'locals' supporting it, when we took it over.
But the pub was originally a 17th coaching inn with loads of character and loads of potential.
This was 1984 and back then pubs were not permitted to trade all day, as is the case now, but just lunchtimes & evenings. Our first lunchtime, we took a worryingly low £14 but a year later, we had built the annual trade to exceed £500,000 and the pub went on to become the market leader in the locality.
This success was very much down to much hard work but was also the result of doing things in a smart way and there was one smart way, in particular, that gave us a great boost very early on in the business:
Know & Understand Your Competitors
That smart way was KNOWING & UNDERSTANDING OUR COMPETITORS and this process was crucial.
It gave us so much:
We knew everything about our competitors
We understood the trading market for The White Hart
We understood the customers that we needed to attract
We understood what products they would buy
We understood what prices they would pay
We understood what customer service we should provide
We understood what customer experience the customers wanted from us
We Researched Exhaustively
For three months before we took over the White Hart, we researched our competitors exhaustively. We studied every pub in our trading locality in great detail.
We eat and drank in each one and we sat and watched how the businesses were run and we watched the customers in each.
By the time, we took over The White Hart, we had devised food and drink menus offering great products similar to those we saw people buying in the other pubs locally and we priced everything competitively.
We knew that to create a good profitable business at The White Hart, we had to take a very large number of the customers who bought from our competitors and this process ensured we did this and quickly, too.
We Added Something
But we added something extra.
As part of the process, we identified the strong points of our main competitors and we copied these and incorporated these into our own business model. But, just as important, we identified areas where our competitors were weak and we focused heavily on making these areas strong in our business model.
There were SIX main areas that all our competitors were weak in. They offered:
poor customer service
small meal portion sizes
poor value for money
poor customer contact
Poor customer service was common to all our competitors, so we set out to offer EXCELLENT customer service to everyone. Many of our competitors offered a limited choice of meals and these meals were often small, of poor quality and provided poor value for money. In response, we offered a large menu with choices for all tastes. The meal portions were large of high quality and were great value for money. And, we and our staff set out to talk to everyone who entered The White Hart and we made a point of getting to know everyone.
Despite the shortcomings of our competitors, several of the pubs were busy and were well supported by the local trade, which indicated to us that the local market was big enough and robust enough to create a viable and profitable business at The White Hart.
This Process Gave Us Confidence
This process and our intensive research gave us the confidence and knowledge to build the business and to turn it into a success.
This process worked really well. The competition did not know what had hit them. We took most of their customers and, literally, every day the pub was full to overflowing.
Importantly every customer, we served, went away excited by what they had received from us and that fuelled a rampant 'word of mouth' - we were the local HOT topic of conversation!
The only marketing that we did was one £30 advert in the local newspaper informing everyone that we had arrived. That cheap advert and the rampant 'word of mouth' created £500,000 of annual revenue in a year, in a time when there was no social media or internet to spread the word.
Failure rates for new and existing businesses is alarmingly high; but I am convinced that if more businesses were to carry out this process in the same intensive way as we did, they would enjoy more success and the failure rate would come down.
This Process Is For All Businesses
This process is not just for a new business but for existing businesses, too - I recommend every business should carry out this process every 3 years.
Because trading conditions change, customers change, product demands change and competitors will enter and leave your trading market.
And, the reason you should do this?
You Will Learn So Much
You won't just learn about your competitors, you will learn much about your trading market and much about trading and running your business for a good profit.
In short, you will learn:
who your competitors are?
how your competitors trade?
what products your competitors sell?
The prices their products sell for?
What customer service your competitors offer?
who their customers are?
how much spending ability their customers have?
why their customers buy?
what customer experience they gain?
what levels of customer satisfaction each competitor enjoys?
what complaints each competitor receives?
what marketing your competitors use?
how effective their marketing is?
the strong points of your competitors?
the weak points of your competitors?
You probably could add more to this list, but hopefully this gives you a good idea.
Use The Information Gained
Importantly, though, when you have collected all the information, you should adjust your strategic planning accordingly:
make your business better than your competitors in every respect
copy their strong points but be better
exploit their weak points and avoid these yourself
Whether you are starting a new business or running an existing business, you should carry out a similar process, irrespective of what business you run and the products you sell. And, with the internet, social media and review websites etc., it is much easier than it used to be when I first started.
You Can Do This
Anyone can carry out this process - yes it will take time, but it will save you time in the long run and I guarantee, it will give you a real boost to your sales and profits.
Give You Confidence And Reduce The Fear Of Failure
Low confidence and the fear of failure can be common with small businesses but this process and the knowledge you will gain from it, will give you confidence in your eventual success and it will reduce your fears.
"Making me do this process ensured I had a good start to my business. If you had not made me do this, I would only have done a fraction of the research. It definitey works"
Words from Brian Spence, Tilleys Gluten Free Bakery
One of my clients, Brian Spence had a particularly good start to his new business using the very same process that I have described here. Had I not advised him to do this, he would have only done a fraction of the research and he would have had only a mediocre start to his business.
Sadly he has had to give up his business due to suffering a stroke, after an excellent start to his business.
Follow this same process and I am absolutely certain you can replicate what Brian Spence achieved.
Best Of Luck!
I hope you give this a try.
Please let me know how you get on.
If you would like to talk to me further about this process, please do contact me below.