Can you imagine a college basketball game that is played without the teams viewing films of their competitor? Coaches and players spend hours viewing film of their next opponent to become familiar with their plays, the different defenses the team uses, which way certain players prefer to move with the basketball and other details to give them an edge when they play against the team.
Professional baseball teams do the same. They have scouting reports that detail the types of pitches that opposing batters prefer to hit, the direction in which batters are most apt to hit the ball, how quick runners are on the base paths and many more details. In addition, they have detailed reports on each pitcher, which pitch they prefer when they want to get a strike out, their speed to home plate, their move on pick-off attempts, and their fielding abilities. Some complain that the scouting reports and analytics have nearly replaced the sense of the game that managers used to have.
In business, as in sports, it’s important to know as much about your competition as possible. While it’s important to know why your customers do business with you, it’s also important to know why people do business with your competitors. What do they do to encourage people to do business with them rather than with you? What are their strengths? What are their weaknesses? What do they offer that you do not? What do you know about the products or services they offer? Are these better or worse than what you offer? What market segment do they target, and why? Are they missing an important market segment that you can approach? What special feature or benefit does your competitor offer that you do not? What would you have to change in order to draw some of your competitor’s customers to your business?
Some people try to take business away from their competitors by talking bad about them to potential clients. That is a mistake. Most people don’t like to hear one business speak badly about their competition. Respect your competitors. Even if a potential client begins to speak bad about your competitor, don’t agree with them. Just show them how your company does things differently, and better, without saying anything negative about your competitor.
The way to draw business away from your competitor to your company is to understand your competitor’s business as well as you do your own and identify ways you can do things better than he does. Every competitor has weaknesses that you can exploit to expand your business, but you’ll only know what they are if you study your competition.
There is another good reason to study your competition. Your competitors are studying you to identify your vulnerabilities to exploit them to their advantage. If you, in turn, are not studying them you will find yourself losing business to them.