With the Internet, existing and emerging competitors come from all directions, the marketplace has expanded from locally to globally (located out of your country) and also virtually (online presence, no brick-and-mortar premises). But how can we categorise those competitors and compete with them?
Types of competitors
These competitors provide similar products or services that satisfy the same buyer’s needs. These can be:
- Wholesalers that sell directly to the public e.g. manufacturers selling their own products or authors selling their books.
- Intermediates (distributors and resellers) that retail products and usually provide customer support.
- Affiliates who do not sell products themselves but make sales commissions when referring customers to sites selling the products or services.
- Niche product suppliers that wholesale or retail highly targeted products and have positioned themselves as specialists.
- ‘Solution’ providers who could sell your product as an integral part of their services e.g. a web designer who include a domain name in their website design and hosting package.
- Individuals and businesses who sell new or second-hand products on auction sites e.g. eBay.
Alternative or Substitute Product competitors
- These competitors fulfill the same buyer needs but in a different way e.g. people who want more traffic to their site can choose from advertising with Google, hiring a Search Engine Optimisation (SEO) consultant or registering multiple domain names to offer different entry points to their website. These competitors provide alternatives to satisfy the same buyer’s need.
- With new technology, competitors introduce products that substitute former solutions e.g. businesses are embracing email marketing to the detriment of direct marketing.
- These competitors do not satisfy the same buyer need but compete for the same budget e.g. people can choose to book a holiday rather than buying a new computer or hire a DVD instead of buying a book. They are competing for the same pool of money.
- These competitors are potential customers who have acquired enough knowledge, skills and confidence to fulfil their own needs. The Internet has empowered people to the extent that some services are becoming less popular or redundant e.g. people can book their own flight without the help of a travel agent or create their own website with free online tools without the assistance of a web designer.
Effective competitive strategies start with a deep understanding of your market and competitors.
- What does my target market really want, need and desire?
- With what potential or existing competitors’ products or services will potential customers compare mine with?
Ten proactive web competitive strategies
- Focus on what you doing well and improve it.
- Identify your competitors’ strengths. Through your documentation, deflect any possible unfavourable comparison of your product or organisation with competition e.g. ‘We’re not the cheapest but…’
- Don’t assume that people know that your product is unique and your customer service excellent. Educate people on your particular strengths.
- Develop strong relationships with potential and existing customers through regular email contact e.g. newsletter or reminders. Loyal people are reluctant to switch their allegiances to newcomers.
- Don’t act desperately. Think twice before reducing prices. Working on a smaller profit margin could affect vital areas such customer service and product development. Instead, consider adding value e.g. bonus or guarantee.
- Create original, useful and current content for your website to attract the attention of people and search engine robots and encourage repeat visits to your site. It can take 5 to 7 visits before people purchase a product.
- Provide an user-friendly website where people can readily access well-organised information, complete simple forms and download information. A dysfunctional website e.g. dead links and pages under construction undermine your credibility and shy away potential customers.
- Make customer feel that you are easily contactable to answer their queries and reassure them that in time of crisis you’ll be there.
- Offer superior online customer support. A substantial knowledge base including FAQs (Frequently Asked Questions) provides an opportunity to demonstrate your expert knowledge and understanding of your target market needs.
- Give positive and optimistic vibes. People are mainly looking for solutions with gains and savings. Be their solution provider and saviour.
Nothing will replace a deep understanding of your target market and your competitors.
Keep abreast of trends and anticipate competitors’ moves. Implement proactive competitive strategies.