Do you know what your competition is up to?
As Mark Quinn from The Washington Post eloquently stated, “Criticizing the competition is human nature.” This notion is backed by an important psychological theory called positive group distinctiveness.
Positive group distinctiveness states that we, as members of a social group, maintain efforts to make our group look good and make the other group look bad. We do this because whether we realize it or not, we derive self-esteem in part from the social groups we are a part of. It negatively affects our self-esteem when our social groups look bad, and it positively affects our self-esteem when our social groups look good.
What does this have to do with your business? Think of your business and your work environment as a social group: You constantly strive to rise above the competition and make your business shine like a diamond in a pile of coal, as any successful entrepreneur should.
But are you taking the right approach in staying ahead of your competition? Here are some strategies for analyzing your competition and coming out on top.
Analyze your competition. Draw a chart. It may sound elementary, but literally get out a piece of paper and a pen and draw a two-column chart, one side labeled “+” and the other side labeled “-.” Begin to list your competitors’ strengths and weaknesses. Create a chart for each business you consider a competitor. Some topics to consider are:
Their success in using social media
Where and how often they advertise
Have they taken any clients from you?
Have they taken any employees from you?
How much their business has grown (or not grown); a relatively easy way to gauge this is whether or not they have had any new hires lately
Their pricing or rates
Their location (if this is a factor)
Analyze your business. Have each of your team members draw a +/- chart, but with a focus on your business. Then, compare the charts against the same list as above and see what you need to capitalize on to come out on top. How do you measure up? Do you see any of their weaknesses you can capitalize on?
Create a plan. After drawing comparison charts, devise a plan that details how you will improve your business while strategically advancing to the next level to stay ahead of your competition. For example, if you see that your competitor has a snazzy website and yours needs to be updated, make it a goal to redo your website within the next few months. Including a timeline in your plan is helpful and will motivate you to keep your goals within sight.
Be mindful about your confidence. It is beneficial to have a high level of confidence in yourself and your business, but be mindful not to get so confident that you fail to see your competition advancing in the marketplace. Keeping tabs on your competition and doing routine competitor analyses will help to ensure that you and your business do not get blindsided and surpassed.
While positive group distinctiveness may not appear to be an attractive phenomenon to experience, we can take advantage of our natural inclination to check up on our competitors by doing it strategically. Performing regular check-ups on your competition, constantly analyzing your business to see how you can improve, and always keeping an eye out for new competitors will provide you with valuable feedback to make the right decisions to either advance or maintain your premier position in the marketplace.