Who isn’t your competitor?

True story. A young couple took their financial adviser’s advice and they both signed up for a regular savings plan. Business concluded, the conversation drifted from savings plans to a more exciting topic…cars. The adviser, who was called Mike, was keen to tell them about his recent purchase, a Golf GTI.

The couple were so interested that Mike volunteered to show them his prize possession, which was parked outside. One thing led to another and Mike was soon giving them a test drive. Next morning, he received a phone call which went something like, “Sorry Mike, we have decided not to go ahead with the savings plans, we’re going to buy a Golf.”

Putting to one side the issue of whether Mike had done his job properly or not, the point is that he lost out to a competitor. However, his view of competition wasn’t Volkswagen, it was the adviser who worked for the firm down the road.

When we ask clients about their competitors, most start (and end) with the names of other firms who do exactly what they do. However, that’s not necessarily how customers see it (and that’s all that matters). They may have £x of disposable income and they may be choosing between saving it or spending it. Equally, a business may defer commissioning a new website because of the costs of implementing auto-enrolment. In this instance, a web design company is – arguably – competing with the government.

Of course, it’s difficult for a web design company to compete with the government. They do need to be aware that when they are selling their services, the choice the potential client is making isn’t necessarily as straightforward as it may seem. The good thing is that in the case of Mike and of the website company, their clients may well return to buy at a later date. The competition was potentially only temporary.

And what about those firms who are your direct competitors? Well, you need to check what they are doing. Look at their websites regularly, follow their social media activity. You need to be aware of new services, changing prices, special offers etc.

For firms providing outsourced services, like us, there’s an added layer of complexity when considering competitors. In many cases, especially where a company is asking us to act as their marketing department, the choice is between us and in house.

So, who are your competitors?

By Mike Johnstone