COL Competitors can teach you a lesson -- without beating you
Knowing your competition is just as important as knowing your customer.
Unless you have a unique product or service, or run a state-owned bakery in Fidel Castro's Cuba, competition is a fact of life. You must deal with it. The best way is to gather what knowledge you can and then act. Competition can be positive.
You can learn a lot by studying your competition: What are the winners doing to win, and what are the losers doing to lose?
Along with everything else that has changed, the old gladiatorial style of competing has passed. No longer do we just climb into the ring and duke it out. The outcome once depended upon the strength, speed, weaponry and reflexes of the combatants -- and whether the Coliseum was muddy or not on the day in question. That was reactive competition, based entirely on waiting for the industry leader to move and then countering.
Planning was minimal. In marketing, this old routine translated into minding the four P's -- product, price, place and promotion.
It worked or it didn't. If it didn't work, you tried another prospect.
Today, we compete differently. Warfare in both the military and corporate modes has become much more sophisticated, more analytical, and more strategic rather than just tactical. We corporate types, with our management teams -- the general staffs of our boardroom bunkers -- press the noiseless buttons of our computerized war machines to create marketing strategies, position papers, long-range plans, niches, goals, objectives and more information than we can possibly digest.
The oversimplifications of the gladiatorial era have been replaced with the over complications of the era of technology. Now we literally study our competitors to death. It has become impossible to stay on top of all the data and still run a business.
Many managers, while calling for more information, are overwhelmed by the information they already have. And what they do have, they use piecemeal or improperly. Knowledge does not become power until it is used. It does not have to be perfect, but it does have to be accessible. And it requires managers who have the judgment to act on it properly.
At Mackay Envelope Company, we put the concept of studying our competitors into practice over two decades ago, and we continue to swear by it today. Conceptually, it's a spin-off of our Mackay 66 Customer Profile, so we call it our 12 P's Competitive Profile. Both are available for no charge on my Web site, www.harveymackay.com.
Here's an abbreviated look at the 12 P's:
Pedigree -- Name of company, subsidiaries.
Physical Scale -- Number of plants, locations, employees, geographic areas serviced.
Performance/Financial -- Fiscal year, revenues, profits, financial condition/issues.
Pricing -- Attitude, response to pricing competition.
People -- Unionized? Key players and positions.
Positioning -- Target market, unique products, short- and long-term strategy.
Plans -- Hold position/grow aggressively? Acquisitions.
Performance as a Supplier -- Delivery time, quality, service.
Prestige in the Business Community -- Reputation, charitable/social/civic involvement.
Probing for Data -- Several ways to find out information about competitors.
Prize fight ... Them and Us -- How to take the accounts away.
Postmortem -- We will beat this competitor if we do the following five things right: (list).
This is not a bound book or 5-inch-thick computer printout. It's not fancy, but that's the point. Fancy does not get read or used. This does.
When we launched this program, we set aside a morning each week to fill these out. It took us a couple months to complete all the questionnaires, don't let that intimidate you. Staff and assistants can gather a lot of the data.
Once you have compiled a stack of these questionnaires, sorted them out, compared them and categorized them, you'll start to see a pattern emerge from step 12. The actions you need to take to make competitive inroads will repeat themselves. Your competitive profile has become a strategic plan. I don't know of a better, simpler or more effective way.
Mackay's Moral: Love your competitors. They are the only ones who make you as good as you can be.
Harvey Mackay is a Minnesota businessman and author.