Updated: Feb 20
How to execute a competitive audit after establishing a frame of reference.
Do you know what your potential clients want to accomplish?
No really. You offer services. You speak to your client base often. Have you ever asked the people you serve, or want to help, what they are trying to achieve in LIFE by working with you?
Did you know asking questions like these could be the best way to establish your competitive advantage? You may be thinking your competition are direct competitors. But in what context have most people considered working with you?
What other ways have your potential, or current clients, considered solving the same problem you solve? Are you competing solely with the personal actions of a potential client?
Today, take out a piece of paper and write down your potential client's alternatives to working with you.
As a professional service provider offering brand strategies, a potential client could:
Get the help of a friend or family member
Try to do it themselves
Hire a direct competitor
Why? Because our services are so expertise based that there aren't too many other recourses, and I bet yours are as well.
Professional service-based businesses are often people or teams with a skill set they have been honing for years.
People who have not put in the same amount of time, energy, and education wouldn't be able to do what you do by themselves easily.
Potential clients may be lucky and have things work out by doing things themselves, let's say. But you know you know that anyone doing what you do themselves is likely to be "asking for trouble" they aren't even aware of yet.
An Example Frame of Reference
What's the workaround for, let's say, hiring a licensed therapist?
Talk to friends or family members
Go to teletherapy via an online app
Seek help from a religious institution
Indulge in things that keep you numb to the help you need
Hire a direct competitor
Questions To Ask a Client or Potential Client
Now, don't just write out your assumptions and not confirm them. Start asking your clients or potential clients what their other options were.
Start with 15 people. See if you notice a pattern in their responses.
If you cannot, continue to ask more people until you do. You may be saying to yourself that you don't even have 15 clients. Be bold and start asking for informational interviews.
If your service is something you know your family members and friends would use, ask them. And be sure to ask them within the context of your price point as well.
For example, "Hey Olivia, If you needed an accountant, but they were out of your budget...
What would you consider doing instead?
Is there any other service you would use to take the place of this person's service?
What would make you want to still work with this person if they were more expensive than you would have liked?"
All this is to say that you must know who your real competition is to position your brand correctly in your clients' minds. You want an ideal frame of reference that comes from "the horse's mouth" so that the choices you make to market your services becomes clear.
Understanding your 'frame of reference' will also allow you to state how you are genuinely different from the "competition" and grow that difference over time to outshine alternatives to your service(s).
Now, if you determine that your competition are more so direct competitors, continue reading.
How To Do A Direct Competitor Analysis
First thing first, a competitor analysis is an umbrella term for the process of researching and analyzing competitors similar to you in size and scope. You may even look at businesses trailing right behind you as competitors.
If a company is bigger in size and scope, just look to them as companies you aspire to reach the scale of if you do. Aspirational companies are great for seeing how you can maneuver to achieve a similar level of success.
Circling back to analyzing your direct competitors, start with looking for businesses that offer the same services you provide to the same audience you do. Just look at 5 to 10 companies like yours.
If you have a brick-and-mortar service business, you can find your competition by Googling keyword phrases related to your business with the mention of your business' location. Still, only look at 5 to 10 companies like yours.
Analyzing Your Findings
You may find that many of your competitors kind of look similar.
The truth is, most companies have not uncovered their uncommon denominator. And at the start of your business, you may look to be doing the same things as the competition you have discovered. But this does not mean you give up on trying to establish a competitive advantage.
It would be best if you still collected research on your competition to learn about their offers, key messaging, personality, color schemes, tone of voice, and services.
While studying your competition, ask yourself:
Whom are they targeting?
What are they offering to them?
How do they promise to make a client's life easier?
What are they missing that you can leverage?
Few businesses take the time to research these things or ask themselves these questions to find ways to stand out. Instead, many companies look to leaders and copy them.
Your goal should be to find ways to stand out from your competition with a brand strategy that zigs when everyone zagged as it relates to your brand's presence and messaging.
Considerations Given Your Business Strategy
As for your services, I will assume you've either decided to become a one-trick pony or a jack of all trades. So, it is up to you to decide, based on your business strategy, if you are falling short of those who have chosen the same business strategy as you.
The more niche your business, the easier this exercise will be. If you find that you are competing with thousands of other companies given your service and audience, you haven't niched down enough. And if you are living with client FOMO, you never will.
Remember, there's your ideal client, and then there is your addressable market, so don't be afraid to niche down as long as a decent market is available. You don't need a million people to win at business. I bet all you are hoping for is just an extra 10-20 this year.
Your Key Takeaway
First, understand the frame of reference for your business. Then, if you need to, check out your direct competitors. In any event, it doesn't hurt to do both.
This article was written by Vanessa Matthew and Erica Koina