It sure would be nice to have the whole market to yourself, wouldn’t it? With nobody else to turn to, everyone would beat a path to your door. But real life isn’t like that. Any market worth being in will certainly draw competitors, so you may as well suit up for battle.
Doing battle with competitors can be a tricky thing. Particularly when you’re doing business in a new market. Things move fast, customers are learning the market, and competing products can change on a dime. Here are 5 key steps that you can take to make sure you beat your competition.
1. Know your enemy and know yourself
The foundation of any good competitive strategy can be traced all the way back to the writings of Sun Tzu in The Art of War. If you haven’t read it lately, I highly recommend picking it up before starting your competitive strategy session. One of the underlying themes of the book is knowing how the battle will go even before it begins. The more you know about your competitor’s product, and your own, the better you’ll be able to handle any objections from prospective customers.
Bring the competition’s product into your labs. Learn how it works. Play with is. Analyze it. And — this is very important — get other people’s opinions too. Have friends, colleagues, acquaintances, and anybody else you can wrangle use the product. Watch them. Listen to them. Learn what works and what doesn’t. The more time you spend doing this, the better prepared you will be when it counts.
2. Never underestimate your competition
I know. Your product is great, and their’s is junk, right? But is it really? While it may make you feel better to say that to yourself, and even to a potential customer, you do yourself a disservice by not recognizing the virtues of competing products.
3. Know the shortcomings of your own offerings
With so much at stake, and so many obstacles in your way, it’s critical to maintain a positive attitude. But that can lead you to overlook real shortcomings in your own product.
Staying positive is great when you’re making cold calls, and delivering your elevator pitch. But when it comes to developing a competitive strategy, you’ve got to let a little reality seep in. Sometimes startup founders view their product the way parents view their children — infallible. Just ask any grade school teacher what happens when Mom and Dad refuse to accept that little Johnny is a trouble maker in class. Denial leads to detention. The same is true of the founder/inventor who refuses to acknowledge that there may be something less than perfect in his own product. Even when customers tell him so.
Try to be objective when listing the weaknesses of your own products. Take those founder-blinders off, and really look at what’s there. What have customers told you. What feedback have you gotten when you pitch? Could they have a point? Put yourself in the shoes of a potential buyer and try to bash you own product. It’s ok. We’re alone here. Nobody else is listening. Now is not the time for that “think positive” self-improvement stuff. To make your product better, you must a ruthless critic. When you do, you will find ways to improve your product and start turning rejections into purchases.
4. SWOT The Competition
After you’ve done an exhaustive review of your competitor’s product, and an objective criticism of your own, it’s time to evaluate your findings. There are lots of ways to approach this, but the most common approach is a Strength/Weakness/Opportunity/Threat (SWOT) Analysis. A good analysis takes into account your product, of course, but also your company’s capabilities. This goes beyond product to include service, support, capacity, and any other asset and capability that might affect a customer’s buying decision.
You can use the SWOT analysis to do a couple of important things. First, it will help you position your product in the market, and build strong messaging that customers can’t resist. Second, it will let you know where to place your effort in improving the next version of your product.
5. Believe in yourself
Now I know I said you needed to be ruthless when criticizing your own product. But once the analysis is done, it’s time to set aside any criticism and get back to that positive thinking you had going on before. Sure your product isn’t perfect. Sure the competition has some good things going for them. However, now that you’ve dissected everything, and exposed the tender underbelly of both offerings, you can set about pitching your product with confidence, knowing that it’s got a lot to offer. Believe in yourself, and in your product, and customers will believe in you too.