Pressure Makes Diamonds

Do you pay attention to your competition? If not, you’re losing money.

Pressure makes diamonds - Douglas Magazine - Apr/May 2024

In recent years, it has become trendy for businesses to declare their disdain for competing. They like to emphasize how they are “focused on their own mission” instead, as if their business becomes a more noble pursuit. Well, that’s not the case. In fact, it’s a bit tone-deaf.

Here’s the truth: While you might not pay attention to the competition, your customers do. They are comparing you to all the other options out there. And if you’re not competing, you’re losing.

Business is all about competition. Nothing irks me more than when I hear people say otherwise. I don’t care what industry it is, everyone is competing for a certain segment of customers. Yes, that customer pool may be incredibly large, but at the end of  the day you all want the same thing: for people to choose you.

The point is that you have to meet your potential customers where they are, and not the other way around. They are searching and comparing. They want to know how you differ and why you’re the best option. The only way you win is by competing. You need to understand the competition — the better you do, the better your sales.

I grew my software company by continually analyzing my competitors, seeing what they did well, and then competing with them on their strengths. If they had a YouTube channel, I had a better one. If they have a well-designed landing page, I had a better one. It really does pay to pay attention.

More Than Just Watching

Keeping an eye on your competitors is not about finding ways to copy them. It’s about understanding them to the core. This is where a competitive analysis becomes crucial. You aren’t just skimming through their website or glancing at their prices. You’re diving deep into their strategies, customer feedback and market presence.

Start by dissecting their product offerings. What features are they flaunting? How does it relate to yours? Next, shift to customer perception. Scour through reviews, social media comments and forums. This is raw intel on what’s clicking and what’s missing the mark.

Don’t forget about metrics, either. Traffic sources, engagement rates, customer acquisition costs and churn rates — these numbers tell tales. They offer a clear picture of where they stand and the trajectory they’re possibly taking.

Use this information to fuel your product development and market positioning. Maybe there’s a gap you can fill or a market segment they’ve overlooked.

Use Competitive Analysis to Accelerate Growth

When running my software company, I noticed that one of my competitor’s customers was complaining about the lack of an intuitive dashboard. Sensing an opportunity, I revamped my own product to include a user-friendly, feature-rich experience that was unseen in my space.

The result? A significant uptick in customer acquisition and retention, simply because my business filled a gap my competitor left open. In fact, sales went up by 22 per cent and stayed there.

By staying on top of my competitors, I did not have to change course with every move they made. Instead, I made calculated, informed decisions that gave my product a unique edge and a clear voice in a crowded marketplace.

Perception is Reality

Your customers are bombarded with choices, and each one tells its own story. How they perceive your brand amid the competitive noise is crucial. They’re not just looking at what you offer, but they’re weighing it against your competitors. 

Aligning your value proposition with customer preferences and expectations isn’t just good business, it’s survival. It’s about understanding what they value most. Is it innovation? Customer support? Cost-effectiveness? Whatever it is, your product needs to echo these preferences loud and clear.

For a number of years, my value proposition was to highlight our top-notch customer service and support system over the competitors. At the time, my competition would reply to inquiries within 24 hours. Me? One to two hours for the initial response. This helped to create a loyal customer base, and also attracted new customers who were tired of the impersonal support from my competitors.

Stay Top-of-Mind

Another strategic play that works very well in any market is making sure that your brand, or product, is always in the conversation. This could mean consistent content that educates and informs, regular updates that keep your product fresh, or engagement strategies that keep the conversation going.

The goal here is not to just communicate, but to overcommunicate. Create touchpoints that keep your brand in the customers’ thoughts, not as a passing mention, but as a go-to solution. For example, incorporate storytelling in your marketing, where your product isn’t just a tool, but a key player in the success stories of your customers. One way is by showcasing testimonials, case studies and user experiences. In that way prospective customers can identify with success stories. 

Embrace competition and grow. Healthy competition is essential for business growth, pushing companies toward innovation and improvement. Viewing competition as a motivator rather than a barrier can lead to significant enhancements in your product and marketing strategies. Pressure makes diamonds. 

So don’t run from the competitors. Jump into the game. It’s the only way you’ll figure out how to win. 

Justin Ferriman coaches founders on how to grow faster and improve their profit margins. His BrightGrowth coaching helps entrepreneurs to get unstuck by revealing creative solutions to pressing issues.