One of the key things that any business with competition wants is a competitive advantage. This post runs you through a very simple model that can help you to establish which areas give you that advantage.
The main benefit of this exercise is to stop you from wasting time chasing business either in areas where you are not competitive, or using “benefits” which are not competitive. Nobody will buy if they know they can get the goods or services faster, or cheaper, or better quality, elsewhere.
First of all, consider the key areas that you want to assess – to keep the example extremely simple, I have chosen quality, price, speed and service, and have assumed that you are a retailer selling something from a “bricks and mortar” outlet.
Now score yourself (honestly!) out of ten on each criterion:
On quality, lets assume you are a 10 as you have the best items available in your shop. Price may score you an 8 as you have high overheads, so need to keep prices up. Speed and Service will both score you a 10, as customers can’t possibly obtain anything faster than walking into a shop and picking it up, plus you have polite staff!
Now take a couple of examples of your key competition. Let’s assume you select an online retailer, and another shop in a different part of town.
The online shop sells the same stuff as you, so quality is equal at 10. They also score 10 on price, as they are cheaper than you, because they have lower overheads to support. Speed is only a 5 for them, as customers need to wait a day or two for the goods, and service is a 7 because they can’t compete with your face-to-face sales staff.
As for the shop across town, they sell slightly cheaper goods than you, so their quality is lower, at an 8. They are cheaper, though – more in line with the online retailer, so they score a 10 on price. Speed is also 10 because, like you , they are a shop where the customer just walks in for an instant purchase. Their staff have a reputation for being a bit rude, though, so they only get an 8 for service.
By the time you have finished, you have this data:
Then you can create a graph of it:
This readily enables you to see that the blue line (which is your business) has an advantage when it comes to service, so that is the area on which you should concentrate your marketing – make sure your potential customers are aware of the service advantage of using you as opposed to either of your competitors.
You could also think about price – you are close to your competition, but perhaps a few judicious offers or an overall review would reduce the price advantage that they currently enjoy, making that less of a factor in encouraging customers to go elsewhere.
Obviously this is a hugely simplified example, but it serves to outline the principle behind this form of modelling. Clearly, it’s important to be objective and honest about your own scores, and where your strengths and weaknesses lie but, done properly, this can save you a lot of wasted marketing effort by enabling you to focus on the true points of difference that you offer over your competition.