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Who accumulates competitor data in your firm? If you do not have anyone now doing this, assign someone, even if you have to hire it done. You should have someone in charge of gathering all of this data into one place, a person who all of the sales people know. Everyone in your organization should know the name of the employee in your firm who takes new competitor data. After you have accumulated a good database about the competition, all of your sales people will be friends with this employee before they visit their customers.
Questions to ask and know about all new and old competitors:
- Size: How big are they? What are their sales? Where do they do business? You want to know this because you need to use their small size or concentration of only a few customers against them in bids.
- Age: How long have they been around? If you have been around for fifty years and they started five years ago, you need to stress longevity and stability. You know what you are doing or you would have not have made it. The jury is out on your competitor. This leaves a lingering question in the mind of the buyer who must decide between you and the other guy.
- Coverage: How much insurance do they have? Is it comparable? Why do they have less? Is it because they are not insurable? Have they had too many accidents and cannot obtain more insurance?
- Experience: What jobs have they done and what customer do they have? Find out if they have had any problems. Do they really only serve one or two major customers? Is it that difficult to find out what they have actually done?
- Employee turnover: Does this competitor have a high employee turnover? You might watch incoming resumes and look for people who have worked there to find out information. It is very important that you know what a company is like in order to compete with them. It is you against them.
- Legal problems: Do they have problems paying taxes or filing documents with the state? Are they in good status or on hold? Check with your state attorney’s office and see if they are in trouble. If they are, your salesmen need to know this.
- Vendor problems: Do they have problems paying vendors? Ask your vendors if they have troubles getting paid by this competitor. Some vendors will tell you privately, some will not. This is the main reason you should always maintain an honest and solid relationship with all of your vendors. Try to treat them as well as your employees and they will always help you. They can be your best friends in the world or they can crucify you in the market when you do not pay them. You make the decision.
- Win ratio or history: What jobs have they won lately? What type of work do they do best? What types of products do they offer that no one else offers? What projects do they avoid?
- Can they be bought? If they are really attractive and all the factors are favorable, is this competitor for sale?
- Who are the owners? Find out if this is a private firm, foreign owned or held by a trust or people behind a management group.
- Unionized? Does the firm have good employee relations or do they suffer from frequent strikes?
- Publicly or privately held? Public companies are much easier to evaluate though you must consider that private firms must be doing something right after thirty years. If they were not, negative cash flow would have steered them off the road a long time ago.
- D&B rating? Credit worthiness?
- Delivery time acceptable?
- Customer service good?
- Reputation well know or newcomer?
- Any competitive bids in the past? Have we won against this competitor in prior bids? Do they lowball? Do they have reasonable pricing? Do any of our salespeople know outside customers who have done business with this competitor? What are their feelings or thoughts?
- Multiple competitors or just a limited few? This makes a difference so have your sales people list every competitor there is out there. They may not all be one to one comparisons since all firms have differing capabilities. Physically line up those close to you in order to start some comparisons.
Know your competitors and offer what they do not. When you think you have discovered everything there is to know about all of your competitors, no company should be driven by a strategy that is based on beating the competition. The best strategy to follow is doing what customers want and doing it well.
Spend your money to study customers, not competitors. It is good to know the competition, but your best spent money is invested in studying your customers and constantly improving your products and services. If you make them happy, they will not look really hard for your competitors.
