You launch your business in a growing niche market. Out of the blue, a friend tells you about a new similar product or service. After your initial shock, do you obsess about losing your edge or embrace the opportunity? At SCORE, we say “FEAR not your competition!” The right move is to transition into discovery mode. Knowledge about similar businesses may add a creative spark to your thinking or confirm that you’re bringing an authentic solution to a customer want or need at precisely the right time.
Take Cara Matchmaking, a local matchmaking business. Cara Matchmaking is a personal service that brings the right people together in a safe, fun and private environment. Founder Noreen Rochester, knew going in that she had competitors but she studied them and then redefined the model of a dating service.
Evaluate your competition in 3 easy steps:
See what makes them tick. Scope out their website. Appraise how they tell their story. Are they solving the pain point in a novel way? If you compete in a new market segment with low barriers to entry, are the incremental features and benefits promised clear? How does that compare to the “must have” features you learned in your customer discovery? Tap into their social networks and get a feel for their buzz.
Note exactly how they do it. Identify precisely how their product is offered in terms of pricing, features and customer service. This is a granular inspection of each element on their website and related blog posts. Make a list of the good the bad and the ugly. Do you need to make some changes to your digital assets
Be a customer. Order a sample of the product, sign up for their service and digest the customer process from beginning to end. Customer delight is mostly in the details. Do they deliver the WOW experience? Do you?
It is healthy to do a competitive analysis. It is insane to obsess over what already exists. Spending tons of time studying a competitor can be a buzz kill. Worse, you end up second guessing your marketing plan. Take your new found learning back to your company with a healthy degree of skepticism, focus on what matters to your customers and add elements or tweaks only if they improve your customer experience.