Inside Small Business | Small Business & Home Business Marketing
Competitive Benchmarking
Competitive Benchmarking: Market Leaders are probably focusing on something else…
Whether you are leading a large corporation or a small start-up company, the need for competitive benchmarking is essential. The awareness of your competitors’ services, pricing, locations, reliability, and methods of engagement is very important when making strategic decisions.
During many years of leading in a large corporation, I did not see the value for competitive benchmarking. As a market leader it was unimaginable to engage in learning from the pack. What could my competition teach me that my customer could not teach me every day? Why would I bother learning from companies that were copying what I did every day?
Do you think that attitude was a market shaping mentality or was it corporate arrogance? The answer was a little of both.
I recently left “Corporate America” and started a small business in a different industry. During the start-up phase, I began to understand the need for intensively benchmarking my competition. I became engrossed in who, what, where, and for how much my competition was engaging in the business. I had maps on the wall with competitor locations identified with a stick pin. I had spreadsheets with pricing, features, and overall customer value. I had webpage screenshots to compare branding techniques. I set out to not just to benchmark the competition, but transport myself into their virtual brands.
Why the shift in mentality? Fear!
As a part of a large corporation you have a support structure, culture, mission, vision and core values that primarily guide your decision making. You have other employees, existing customers, and long term partner relationships that validate your strategic decisions. This support structure can be dangerous without balance points, but it is essential to shaping a market leader.
As a start-up, your support structure is small to non-existent. You more than likely have a new business entity, a go-to-market idea/business, a source of funding, and a few employees that are committed to growing new company. What you don’t have are the answers to the test.
What are compelling buying criteria of the market?
What is the price point that will allow adequate volume and strong margins?
What are the key benefits that my company should provide to my customers?
How are we going to gain market share in a competitive market?
Without a support structure most start-ups go into competitive analysis overload. We look for all of the answers by evaluating “what are competitors do” and “how they do it”. We even go farther by attempting to hire individuals that have been key employees from our competition that have the answers.
For a small company entering a competitive market space, all of these reactions are expected. The fear of failure deflects our thoughts from leading the pack to being a part of the pack. It forces us to play the percentages of entering a market while differentiating ourselves at their game rather than creating a company that is playing by our own agenda.
While benchmarking is an important focus we need to have, market leaders are focused on something very different. True market leaders are securing their future by sustaining a strong culture and developing the next generation of leadership. This focus gives a market leader the courage to adapt to tomorrow’s opportunity versus reacting to the threat of today’s competitive environment.
I don’t know if my time spent evaluating my competition was too much or not enough, but I do know that there are a number of valuable focuses that could have been prioritized above competitive benchmarking. Developing a strong culture, defining a set of core values, communicating a vision of success, identifying a group of people that can take my company to the next level, and building deep relationships with those valuable individuals are the things that will enable me to grow well past my competitive boundaries.
Competitive benchmarking is a necessary function for every start-up, but don’t forget that the market leader is probably focusing on something very different on a daily basis.
Daniel Bigbee, President & Owner, Capability Homecare and Capability Health Care. Built on a solid foundation of relationships and trust, Capability Homecare provides exceptional in-home services to seniors throughout the Seattle metropolitan area. Capability Healthcare offers professional staffing solutions. Daniel has been able to successfully leverage 14 years of experience in leadership, recruiting, sales, customer service and professional development to lay the foundation as a market leader in the small business arena.
Posted on Monday, February 11th, 2008 at 12:32 pm and is filed under Leadership, Marketing, Small Business. You can follow any responses to this entry through the RSS 2.0 feed.
