hello let me tell you a story every
morning in the Serengeti plains of
Africa a lion awakes and that lion knows
that it has to run faster than the
slowest antelope that day if it wants to
eat and every morning in the Serengeti
plains an antelope
awakes and that antelope knows that it
has to run faster than the slowest lion
if it wants to escape so whether you are
a lion or an antelope when the Sun comes
up you'd better be running I want to
talk to you now about analyzing your
competition and here's the rule to
succeed in business you must be able to
position and sell your product or
service against your competitors all of
business is competition from the time
you get up in the morning to the time
you go to bed at night and your ability
to clearly define your competitors and
then produce and sell your product or
service against them is the key to
business success so you start off by
analysing your competition
you almost look upon business like a war
and you analyze your enemy who is the
enemy you must be continually seeking
ways to be smarter better and faster
than your competition because your
competitors are continually looking for
ways to put you out of business as
quickly as they possibly can by taking
away your customers taking away your
cash flow and taking away your profits
and if you're not thinking the same
things and you become a victim of
competitive strength and competitive
advantage well here's the reason why
there's so much competition is because
customers want the very most for the
very least amount of money
customers are greedy they're lazy
they're ambitious they're selfish
they're disloyal they want the very very
most product or service for the very
least amount of money and they will buy
in an instant from the person who they
perceive offers that to them you must be
continually thinking of how you can be
the person in the customers mind who
offers them more of
they want at that moment to succeed you
must develop and maintain a competitive
advantage in other words you must
determine what makes your product or
service superior you must decide upon
your area of excellence what we know is
that customers always buy what they
perceive to be the very best choice
under all or under the existing
circumstances your job must be to
position your product or service and
show them that it is superior in some
critical way that which should cause
your customer to buy from you rather
than from someone else especially you
must be absolutely clear about your
unique selling proposition now the
unique selling proposition is one of the
most important concepts in all of
marketing it is something that only your
business does or only you do that no one
else does that is a value to your
customer the word unique means only one
in the whole world so what is it that
your company has what is it that your
products or services offer that make you
unique I'll give you a simple example
with the great proliferation of 7-eleven
stores convenience stores worldwide is
based on convenience only one
convenience store can be at that
location serving the people in that
market area what makes the convenience
store unique is its location sometimes
it's the product offerings sometimes
it's the people who sell in real estate
for example in life insurance the
products are available everywhere what
makes the unique selling proposition is
the individual who's actually selling it
because there's only that person in the
whole world
this can be a great way of your business
be developing a unique selling
proposition because of your people
entrepreneurship is an unending struggle
and competition with other concerns
other businesses to win customers and
that is to win customers that means you
have to attract customers you have to
lure customers you
to become more desirable to customers
the only way you get customers is almost
like courting them in every way possible
so to succeed you have to be determined
to be the best in your market now this
is an important point and Peter Drucker
points it out he says even if you were
starting your business on a kitchen
table if your goal is not someday to be
the best in your business you will never
succeed because you will set your
standards too low to be able to overcome
competition in your market set a goal to
be either number one or number two in
what you do now can you achieve it in a
week a month a year who knows it may
take you several years most companies
take five to eight years before they hit
their stride from eight and from a new
startup but Jack Welch transform General
Electric by saying that will be either
number one or number two in every one of
our businesses or we will get out of the
business and that should be your job as
well and then the next question you ask
is how what would we have to do to be
the best in our business continually
look for ways to improve your product or
service offerings there is a concept
called Kaizen which comes from Japan
which means continuous betterment
there's another concept which comes from
that it's called cane I which means
continuous and never-ending improvement
continuous and never-ending improvement
every day you should be looking at ways
to make your product or service or
business better than it was the day
before now just like in warfare your
choice of your enemy is going to
determine your strategy in business your
choice of the companies you're going to
compete against determines your strategy
as well if you determine you're going to
compete against smaller companies then
you have to do certain things in a
certain way if you determine you're
going to compete against the industry
giants then you have to offer products
and services very differently from if
you're going to compete against small
companies so you've got to define your
choice of competitors who are you
competing against
now who is your competitor your
competitor is anyone who sells a similar
product or service to you in other words
if the customer has a choice buying from
you or buying from someone else that
person is your competitor second of all
your competitor is any alternate use of
the same money that your product costs
give an example let's say you're in the
restaurant business you can say that
your competitor is every other
restaurant no maybe your competitor is
buying the food or making food at home
and not going out at all I did some work
recently with one of the major cruise
lines and I asked them who is their
competitor what other cruise lines do
they compete against what they told me
is that they don't compete against
cruise lines because the cruise business
is growing they compete against what
they call land-based vacations where
people go to resorts or Hawaii or the
Bahamas or somewhere else they compete
against all vacations on land as opposed
to vacations at sea that's their
competitor a competitor is an alternate
use of the same money that your product
costs now another competitor may be the
fact that your customer does not even
know that your product or service is
available sometimes we say your major
competitor is just ignorant is people
don't know that your product or service
is available and that can do certain
things for your prospective customer
they don't know that it's there so
sometimes your major job is to advertise
to promote to sell to get the knowledge
of your product out there give you a
great example there was a gentleman who
worked for years and years and years to
develop a blight ball but lasted for
50,000 hours and he tried to sell it
over and over again but it cost two or
three times as much as a normal light
book finally when he was just about
ready to quit he was invited onto a
television show and on the television
show he talked about the light bulb and
a major national company that managed
office buildings sought and realized
this would be the perfect light bulb for
hard to get at places within their
stairwells and fire escapes
they bought 50
and lightbulbs from him and made him a
millionaire overnight he finally got the
information out how could you get
information about the special qualities
of your products or services to more
people who could buy from you this is a
critical question and ignorance could be
your biggest competitor well your
customer always has three choices in any
market number one your customer can buy
from you number two
the customer can buy from your
competitor and number three your
customer can decide not to buy from
either of you and do something else with
the money this is what you're focused on
all the time is to get them not to buy
from your competitor and not to spend
the money somewhere else but to buy it
from you
and to do that you have to convince them
that you are the very best choice so
start off and make a list of all the
competitors that can take business or
sales away from you sometimes we
encourage people to make up what is
called a competitive grid where they
list all of their competitors on down
one side and all the features and
benefits that competitors offer down the
other and then they put in excess to
determine what it is that their
competitors offer that they don't and
what is that they offer that their
competitors don't now you have to ask
these questions why do your customers
buy from your competitors one of the
things I would do when I started off in
selling if I found that my prospects for
buying from my competitors I would ask
them why specifically did you decide to
buy from them sometimes I'll tell my
sales professionals is call up a person
who bought from your competitor and say
tell me what was the final element that
caused you to buy from my competitor and
they'll tell you and sometimes if you
can find out what it is you can find out
a way to counteract that perceived
strength next course is what benefits or
advantages does your customer perceive
that he or she gets in buying from your
competitor rather than buying from you
in other words what do they feel they're
getting remember customers are
predominantly emotional
is they by a feeling or an emotion and
when you ask them why do you feel our
competitor is better than we are they'll
almost instantly tell you and once you
know that you know what you have to beat
you know what you where you have to
develop superiority another question is
in what ways is your competitor superior
to you and here's an important point
never ever dismiss or or criticize or
say anything bad about your competitors
why is instead you should admire your
competitors because if you admire them
and look at what they are doing that is
superior to you the way they sell it the
way they deliver it the way they service
it what that will do is it will give you
rare insights into what you have to do
to be superior to them in the future
so never criticize your competitors
never dismiss your competitors always
look at what they're doing well and see
how you can either emulate it or copy it
or even beat it or go one step beyond
them in the future
ask yourself what are the major
strengths of your competition sometimes
the major strengths is that they've just
been around longer than you have
sometimes they have a great service
reputation I'll give you an example one
day we sat down to buy new computers for
our entire business and we finally made
the choice it would cost us a hundred
and fifty thousand dollars and we made
the choice to go with one company rather
than another because the major strengths
of that company was after sales service
the first company had the same quality
of products but since computers always
end up having problems we had to go with
a company that would service them
quickly if there was a problem so what
are the major strengths of your
competitors and how could you compensate
for those strengths finally what are the
major weaknesses or vulnerabilities of
your competitor and how could you take
advantage of those weaknesses I can tell
you this when we bought the computers
the people who wanted us to buy
computers from the
pointed out all the problems in
after-sales service which was a major
vulnerability of the other company and
as a result we switched the order to the
company that could take better care of
us after we bought now here's an
important point
choose your competitor carefully choose
your competitor carefully because that
determines your entire strategy and
business and let's say you're starting
off in business or you have a
medium-sized business your competitor is
not the fortune 500 Giants you're not
competing against those companies you're
competing with other companies in your
same band of sort of size product range
prices methods of doing business you
only have to win within your band you
don't have to compete against the
biggest in the world you just have to be
the best within that particular band
very important so question what do you
have to do to win customers away from
your competitors
since customers are disloyal what do you
have to offer them to get them to buy
from you rather than from someone else
this is very important sometimes it only
takes one thing that you can offer that
your competitors can't to cause your
customer to come to you and then to stay
with you question what must your
customer be convinced of to buy from you
what must the customer be absolutely
convinced they will get if they buy from
you rather than from someone else
another question is why should your
customer switch from you or from your
competitor to buy from you this is one
of the hardest things in business by the
way is getting a customer to switch
because of what is called the comfort
zone sometimes people get into a habit
of buying from a particular company and
they become relaxed they know where it
is they've dealt with them before and
even if you offer a better product or
service or a better price they will
still stay with the old company unless
you can give them a real good reason to
switch many companies by the way will
offer to buy out the previous contract
pay off all the rent if you switch to a
new building take your car or a piece of
equipment as a trade-in they'll make it
very
easy for the customer to switch to them
now what value does your customer seek
that you offer better than your
competitors remember in customer
psychology it only has to be one key
value that you offer that's better than
your competitors that will cause them to
come to you many times by the way your
customers don't know that you offer this
key value so you have to find out and a
very good question is you know what
would have to happen for you to buy from
someone else what would you have to get
from someone else including ourselves
that you're not getting from your
current supplier that would cause you to
switch and sometimes I'd say well if you
could do this or you could do that and
they will tell you what you need to
convince them up and if you can you can
get the sale and finally where is your
competitor most vulnerable
remember great Wars great battles are
not necessarily won by attacking the
enemy's strengths but by attacking the
enemy's vulnerabilities where is your
competitor most vulnerable and how could
you take advantage of that to develop
competitive advantage your product or
service must be better in at least three
ways people say well have to have one
thing though you have to have three ways
in order to get into the market and
here's some of the ways that your
product or service could be superior
number one your product or service could
sell at a lower cost with the same level
of quality or to your product it could
be of higher quality at the same level
of price or three your product could
offer additional features and benefits
that are very important to the customer
that your competitors don't have or for
your product could be easier to buy and
to use customers are very big into
convenience many companies have
transformed their industries by just
making it very easy to buy from them and
making the product or service very easy
to use Apple Computer is a perfect
example it has always been easier and
more fun to use than any other computer
and that's why they've managed to sell
more than a billion dollars worth of
Apple computers now another way that you
could be better is
your product must be easier to deliver
and you must be easier to service your
product you must be able to do it faster
so for example Federal Express delivers
very quickly UPS develops very quickly
some companies have same-day service
some companies when you have a need will
be there within two hours that will
cause people to buy from them rather
than someone who gets there later on
your product might have better
guarantees and warranties sometimes a
company that offers a sweeping guarantee
will take enormous business away from
companies that don't do you remember in
the in the car wars when outtie came out
and offered bumper-to-bumper service
guarantee warranty for five years and
just literally swept the market what
companies were coming out and offering
eight year warranties when before their
warranties were two months and you can
offer superior service after the sale in
fact one of the very best competitive
advantages today is to be able to serve
your customers in a superior way so the
word goes out that when you buy from
these people they take wonderful care
from of you afterwards now you have to
be absolutely clear about the
competitive advantages that you will
have to develop to succeed you see it's
hard to get a customer to switch from
someone else to buying from you and you
have to determine how much it will cost
for you to develop a product and enter a
new market you have to determine how
much it's going to cost for you to
develop competitive advantage and the
rule is it takes two to four years for
you to bring a new product or service
into an existing market because it's so
hard to get people to switch over time
you have to determine how long it will
take for you to become successful
selling against your competitors
interesting point in Jim Collins book
good to great several of the companies
in there looked at their existing market
and realized that because of the nature
of the competition they could not be
great in that market so they switched to
a whole new market where they became one
of the greatest companies in the
industry sometimes companies have to
actually switch their product or service
offerings
their competitors their markets their
customers in order to become excellent
because they simply cannot invest the
amount of time and money it takes to be
superior to their existing competition
you have to consider the possibility
always of entering a different market
where there is less competition for your
product now your goal is to develop a
product or service that is in excellence
in one or more ways if your product or
service were the best in the business
what would people say about it remember
you could only win in competition if
people perceive your product or service
to be the best if your product were the
best what in what way would it be the
best and what words would people use to
describe it what would you have to
include in your product or service to
get people to say that you're the best
in the business
what would you have to add to your
product or service how would you have to
upgrade the quality the ease of use the
service the reliability for people to
say that you are the best answering this
question is the key to analyzing your
competition and achieving competitive
advantage finally continually look for
ways to lower your price to offer
something different or to sell your
product or service in a different market
remember the keys to success in business
are marketing and innovation and
innovation is always looking for faster
better cheaper easier more effective
ways to position against competition
continually seek for weaknesses or
vulnerabilities in the products and
services of your competitors to win the
business Wars you must be continually
looking for ways to develop strengths
and areas of superiority in the products
and services that you offer
remember your ability to sell
effectively in competitive markets is
the key to success as an entrepreneur or
as a business person of any size
you
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