Every business has competition, however many people running businesses don't know who/what their competitors really are. Knowing your competition, then sculpting your strategy around that knowledge is a plan for success for every business.
Competition is simply this: any reason a potential customer does not "buy" from you. Most people think of "direct competitors," those unkempt savages across town who poach your prospects and vendors. Businesses certainly lose customers to competing businesses, but it goes beyond that. Think of all the reasons why customers do not buy from you or choose to buy less.
- They want more speed and convenience
- Lack of need for your product (for instance, they choose not to acquire the equipment they were going to finance)
- Confusion (they don't understand what you are proposing)
- Lack of qualification (such as poor credit, lack of cash, or inability to make monthly payments)
- Lack of a solution to meet their precise needs (such as it doesn't fit their price requirements)
You should know your two or three biggest competitive threats, whether they are direct competitors, external factors or deficient product benefits/features. Write them down. Now you have a list of the top reasons your company loses out on income (which for many of you means the top reasons you personally lose out on income).
The next step is the strategic development of solutions to your competition. For example, if your three biggest competitors (reasons not to buy) are unqualified prospects, time from application to funding and a direct competitor stealing your vendors, now you can act on those...
If you are attracting unqualified prospects, it may be time to change your marketing, change your Web site to better filter prospects or have conversations with your vendors about what types of customers you can best serve. It may also be time to challenge yourself as to how you might shift unqualified prospects into the qualified range, like creating marketing materials and sales pitches on securing co-signers and cross-corp guarantors (or getting more involved with Trucks at Hand).
If you are losing customers due to turnaround time, it may be time to secure more information on processes, better train internal and external people or add resources.
If you are losing vendors or end-user business to direct competition, first you must figure out why. You might be surprised, because it might be better pricing but it might also be that your direct competitor sends doughnuts to the salespeople every Friday. Once you know why, you can tailor your message and enhance your product accordingly.
The list of competitors will probably not surprise you, after all you wrote the list. It might be insightful to other people in your office though, so be sure to share. More important is the brainstorming and cost/benefit analysis of how to overcome the competitors. If you find you are losing two or three deals a month because a competitor is visiting vendors every other week, how does it make sense not to hire another person to visit vendors? If you identify that you are losing business because you are seeing tougher credits from your end-user marketing, why wouldn't you learn everything you can about adding co-signers and cross-corp guarantors and taking advantage of Trucks at Hand? Of course the solution may be an issue of awareness, such as if you find you are losing deals because people can't reach you when they have questions. Is it worth two or three deals a month to hand out your mobile telephone number or give your vendors and applicants the name and phone number of a backup contact in your office?
Take the time to write the list, brainstorm and analyze all the possible solutions, discuss it with your internal and external team and implement. You may find that booking more deals from your existing base of vendors and end-users only takes a few changes in your marketing and operations.
