You can put any competitor out of business just by exploiting their weaknesses over time. It takes guts, and you may lose some sleep over it. What would your level of satisfaction for such a victory?
Today, Amazon's revenue would make it the 55th richest nation--if it were a nation. What if Amazon had brick and mortar stores and one was next door to you? (They actually do have a brick and mortar store: Whole Foods.)
In the early 80's, it was Sears, not Amazon, not Best Buy, not Walmart. You remember Sears, the catalog and retail giant of the last century? There always will be someone bigger than you.
It's easy to become threatened, despondent, or otherwise intimidated by your larger competition. In the case of a big box chain store vs. a small solo retailer, the size comparison is ludicrous. But so was that shepherd boy in comparison to Goliath.
Going After the Competition
In the late 70's, fresh out of high school, I started working for my dad. My dad owned a large retail appliance, electronics, and furniture store in Connecticut.
The previous owner and founder had started the store as a gas station in 1932. In time, the store evolved into a local appliance store by the time my dad acquired it in the 70's.
Our "Big" Competitor
A competitor's store was directly across the street. Our driveways intersected. If you were to drive out of our store's driveway and go strait, you'd drive right into their parking lot.
I was managing a small team of sales people. The across the street guys were our major competitor. We were losing a huge amount of business to them. They were a huge retailer. Their reputation was indomitable.
Doing Something About It
Losing sales to the guy across the street and to any of our other local competitors was annoying, to say the least. I decided to do something about it. Here's what I did:
- I revised our marketing. We started hammering loss-leaders while having solid upsells.
- We gave a bonus to the sales staff if they sold one of our upsells.
- I told the sales staff, "If someone drives here from "that" competitor, nobody walks. Do not let them out the door without selling them." I also created a "tag team" sales approach I borrowed from the auto sales industry.
- We ran absurd, aggressive advertising. I'd clip (no Internet then) competitors' ads, keep most of the copy, and cut the price, even if it meant going below cost. Or we'd run something better at lower cost. These loss leaders became "nail-downs." We had logical upsells and we always got the upsell. There was a deep strategy in that.
- One of my sales guys noticed the stated shipping weight of one their products was 22 lbs. less than our comparable model. We would keep copies of competitor's literature on our sales floor. We'd show the catalog to prospective customers, and ask, "Why do you think their product weighs less? What do you think they're leaving out?" This tactic worked 100% of the time. It never failed.
- We were agile. This should be the first bullet point. If we needed to adapt, change, find a new tactic, we would, without hesitation. As we discovered our competitors' weaknesses, we'd continue to change and adapt. For example, we discovered one competitor's service response time averaged a certain number of days from phone booking to the truck showing up. We could beat that. I made sure each salesperson shared that tidbit during their branding pitch: "By the way Ms. Prospect, did you know we guarantee our service response time is X days faster than...?"
- We hammered our USPs in all our promos, POS, and sales team. "Why buy from the other guy when you could buy from us?" "Here are 10 reasons why..." Don't be vanilla.
- We created a coupon booklet and assigned a value to each coupon and to the entire booklet. We pitched the coupon booklet before the actual product, thus locking in prospects to our unique USP. This is an ancient tactic and I don't know why many retailers are not doing this now: pre-selling before the sales pitch using USP props. Instead, everyone is opting for "loyalty cards" like everybody else. Do you want to be vanilla?
The Competitor Closes
It took 10 years. In exactly 10 years our across the street local competitor closed their doors. This was before the big ticket retail industry like Sears started having difficulty.
I was shocked. Can I take all the credit? No, of course not. And maybe I had nothing to do with it. The point is, we DID something about it. We proactively addressed issues with our competitors.
Your Competitor is Stupid
And so are a lot of bloggers who give bad advice. Google this: "how many corporations don't have a facebook page?" The top-ranked articles argue that "you don't need a Facebook™ business page." What? You can't run ads without a page on business.facebook.com. So much for "good" advice.
On the positive side, the Internet is full of tactics on how to exploit your competition. I'm only going to focus on social media -- because that's what you should be focusing on:
- Drawing from tax reporting, there are about 30 million business in the U.S.
- Of those, about 7 million are actively advertising.
- 60% to 70% of companies are willing to spend on social media advertising and some big-ticket verticals like healthcare are budgeting close to 5% for social media marketing. [Source: Statista.com]
Interpreting the Statistics
What do the above statistics mean? Your choice, really. That's because until you look at exactly what your competitor is not doing--you won't be able to exploit them.
The Bigger they Are the Harder they Fall
In 2011 the now defunct Chevy Volt was launched. During a televised interview, I remember a Chevrolet spokesperson saying, "We can afford to lose money on the Volt." This was after the 2009 automotive bailout but still during a political climate favoring Detroit.
Being a bit conservative, I balked at the comment feeling it was bad idea. I thought, Mr. Akio Toyoda would never have done that with his Prius -- among the most successful green cars of all time.
The Chevy Volt didn't die because Chevy failed to adopt Japan's economic model. After all, how many startups that you know began with a negative ROI? The Volt failed because of bad marketing tactics.
Note to self: You may have a great product (I think the Volt was a great car) and you can run nice ads, but if your strategy and processes (middle of the funnel) are messed up, you'll miss hitting your target audience and you'll be done.
How to Audit Your Competitors
This could be a massive project so let's just focus on Facebook™-- the big ROI winner. If you win there, you've won. Here's the skinny:
- See if your competitor has a Pixel. Download and install Facebook Pixel Helper into your Chrome browser.
- Surf their website. Pixel Helper will show if they have a Pixel and if it's working correctly. Very easy to use. Caveat: if they have Google Tag Manager and are "hiding" their Pixel. If they are DIY, most aren't using GTM, so no worries.
- If they have a Pixel, see if they're running ads: Find their FB page, on the right sidebar look for, "Page Transparency." Click through to view their ads. If no ads, you win. Most likely their web person stuck in some Pixel code and that's all.
- After visiting their website, see if you are retargeted in your FB portal. If you don't see any of their ads in a short period of time, no retargeting.
- Go to Small Tools and check Domain Authority. Check your site against your competitors' sites. If your website suffers, get that fixed. It's just one more to-do for you.
The competitors audit above is very simplistic. But rest assured, they are not doing this with you. If they're not running Facebook™, you've got it nailed. If they are, 99% of B2C companies are messing something up, not running retargeting, not running a good hook, running just branding, running the wrong campaign objective, not hitting the auction correctly, are not split testing, have a few audiences that are bad, not testing LAL audiences, and on and on.
Your biggest enemy is fear. If you can overcome fear and start taking some proactive steps, you'll win in time.
If you want more help or want a very thorough audit, check in with us :)