“How could she not see this coming?” Look in the mirror.
Armed with a strategic plan built on the foundation of purpose and stocked with customer insight, it’s now time to look closely at the competition. Learning how your competitors plan to defeat your strategy will fortify your plan to achieve long-term success.
I am adding the following step to the creation of marketing plans:
Create your competitors’ market entry plan.
Why? Because my current client is in a classic market share battle. After being the innovator in the market and the only game in town, suddenly, there are now 3 competitors within 30 minutes on either side. And, they all seem to be following the same playbook.
How could she not see this happen, you ask? Well, look in the mirror because you are headed toward the same outcome right now if you are a location-based business.
You just haven’t heard the bad news, yet.
That is, that your competitor’s lease has been signed and architectural plans drawn, or maybe that the latest trends indicate preferences for pop-up stores. Hence, your 15-year lease has just been relegated to a handicap vs. an advantage.
If you are in the tech business, your next biggest competitor is halfway around the world. Unfortunately, tomorrow he will simultaneously celebrate the launch of his new business and his 27th birthday.
And you simply have no idea.
Wise leaders advise, “don’t look over your shoulder.” I agree. We shouldn’t fear the competition or let their moves fully dictate ours.
On the other hand, business disruption moves much faster than a game of chess, and companies come to the table, or market, with varying resources, advantages and disadvantages.
You need to reverse engineer your competitors’ strategies to eat your lunch, understand their schemes to take your best customers, and develop plans to neutralize their tactics.
So, if you are a successful, stable business with awards for best workplace, you have little to worry about, right? Wrong. You are the number one target for competitors two and three.
Their goal is to topple you from that position. And they will effectively combine forces to accomplish their mission, though only in the sense that they each have the same objective.
So, what is in a typical competitors’ Plan to Win? Objectives:
1. Steal your best and most profitable customers. 20% of your customer base likely accounts for 80% of your revenue. These are the customers the competition want.
2. Pick off your most insightful, productive and hardest-working executives and team members. More money could possibly be the approach; however, in my experience, it’s more likely getting the position they’ve been waiting for. In your stable company, you have a good bench. That’s fantastic for you, but may leave your over-qualified number two’s vulnerable.
3. Neutralize your competitive advantages. Many companies think of their advantages in terms of features and benefits. These are easy pickings because it’s easy to one-up you, or at least appear to do so if enough marketing is put behind it.
4. Make you irrelevant. Another approach savvy competitors can take is to re-frame the conversation (or change the playing field). What is “re-framing?” It’s essentially introducing a thought or idea that causes people to think differently.
Re-framing can be done in several ways, including dominating the channel with the best supply chain, repositioning or good old-fashioned relationships. The goal is to move away from competing on price and features (more on this in Part 5).
So how do I prevent competitors from eating my lunch unexpectedly?
1. Talk to your customers. See things from their point of view. Help them solve their biggest problems. They’ll stay with you if they see you committed to their success.
2. Likewise, talk to your employees. Find out what motivates them and provide a way for them to be super-excited about their work and the opportunities. Studies show that job satisfaction is not really about money.
3. Hone your advantage. What competitors can’t neutralize is your vision, creativity and commitment to service and innovation. Survey your customers regularly to see how you are doing on service. Invest a percentage of your profits into R&D. Ask your customers what’s important to them.
4. Keep your ear to the ground. Once again, ask your customers what’s going on, what’s new and what’s on the horizon.
Your customers will tell you what you need to know.
Strike first to make your competitors irrelevant before they do it to you. To be fair, there is no question you must be a well-run company—see the Amazon best-selling book, The Growth Gears, by Art Saxby, CEO and Pete Hayes, Principal and CMO of Chief Outsiders, on how to be well-run AND customer-focused.
Most CEOs don’t want the company to fail. So, what does long-term success have to do with driving in reverse or reverse engineering your competition? By thinking through competitors’ plans—what you would do if you were one of them—you can identify risk.
Once you identify risk, you can prepare to neutralize it.
As you practice reverse engineering a competitive threat, you can prepare to neutralize the threat, and the process may inspire new ideas or accelerate existing ones—once valued from a new perspective.
So, what is your competitor’s Plan to Win? It can be either the best thing that happened to your business, or put you on your heels. Once you know, you can begin to act in a way that will sustain the business regardless of your competitors’ moves.
Next, in Part 5, we’ll discuss strategies for building a sustainable competitive advantage, the very thing that super-investor, Warren Buffet, looks for when deciding where to place his bets.
This simple question, “What is your competitor’s plan to win?” should also be a topic of discussion with your executive team.
Consider this for your next executive meeting, or perhaps quarterly or annual planning session:
1. Identify your top two competitors, plus an emerging or indirect competitor (e.g., prepared foods in the grocery store as indirect competitor to casual fast dining).
2. Assign each competitor to a three-person team of mid-level managers with a mix of creative, analytical and operations-focused thinkers.
3. Have each team develop the competitors’ Plan to Win with objectives 1-4 as outlined above. This should be a serious exercise with analysis and support.
4. Have the teams present their plans to the executive team.
5. Then, re-assign the teams so that they reverse engineer the strategy and develop plans to neutralize the risk of a significant competitor’s attack