Brian Tracy Building your business pt.2- Analyzing the competition

Brian Tracy Building your business pt.2- Analyzing the competition


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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