Smart Competitor Analysis Starts With the Customer

Arm Wrestling

When performing competitor analysis, you have to assess your competitors’ strengths and weaknesses in relation to a particular bid, customer or market area. If you just look at them in a vacuum, without considering how well they can do a particular job for a specific customer, you could overlook a golden opportunity to demonstrate why you’re the better candidate. You have to factor in the circumstances, because they always dictate who the stronger opponent is. For instance, if you’re an intelligent, petite guy facing off against a big, dumb brute who’s ripped, should you be worried? That depends; are you fighting him, vying for a job that requires heavy lifting, comparing wits, or seeing who’s best suited to squeeze into a tight space? In the latter two situations, you’d have the upper hand, regardless of how physically strong your opponent is. The bottom line is that you can’t assess your competitors’ abilities and develop a plan to beat them without taking all factors into account, including what your customer wants.

Business Development 101 tells us that the customer defines the parameters of strengths and weaknesses. Business Development 201 reminds us that a government customer is not an individual; a government customer is a group of people who may or may not share the same perspective on strengths and weaknesses. To understand what strengths and weaknesses matter to them, you have to first understand the customer group. Since you are on your game and working up front and early, the multi-faceted customer likely won’t have closed ranks on strength parameters yet. They could be numerous and, worse yet, conflict with what you plan to offer. You have to open a dialog with your customer and start feeling out what matters most to them as early as possible so you can assess your competition and start formulating a plan of attack.

Why can’t you accurately assess, let alone combat, your competition until you know what strengths a customer desires? Here’s an example to illustrate: Suppose a competitor has a portfolio of plain vanilla current and past projects executed by sheep—i.e. work that just “keeps the lights on.” Is that a weakness? They don’t have an innovation program or multiple patents like you do, so you might be happy about their ho-hum past performance and capabilities. What if the program manager for the customer in question likes to exercise a lot of control over contract work, though? Maybe the customer equates “leading-edge” to “experimental” and doesn’t want firms testing new ideas out on their program. When you take risk-averse “placeholder” customer leadership into account, the sheep you’re facing off against start to look like pretty strong competitors after all. It just goes to show that you can’t wave off any competitor as a non-threat until you know exactly what your customer wants.

Finding out what strengths matter most to your customer will help you get a read on the threat level your competitors pose, but your analysis can’t stop there. Once you figure out what strengths the customer cares about, you have to solve two more riddles: (1) What indicators demonstrate the desired parameters? (2) Where do you look to find those indicators?

When attempting to answer those questions and see where you stand relative to your competitors, creativity is essential. You have to think about all the different places you might be able to get the answers you seek. For instance, let’s say you learn that your customer is concerned about strength in cyber security and favors a defensive rather than an offensive approach. What indicators would tell them that an offeror is aligned with those sentiments? For one, they could look at the past experience of key employees. Within their resumes, work history or projects, references to penetration testing certifications could indicate strength in offensive cyber security, whereas BigFix software qualifications might indicate a defensive cyber security strength or focus.

Figuring out what strengths a future customer thinks are important and what indicators they may use to decide that a firm has those strengths are important parts of competitive analysis. However, you have to dig even deeper if you want to find an angle that will give you a competitive edge. Think carefully about the questions you need to ask, find the answers, and build on those insights. The goal is to get beyond what your competitors have done and figure out what they can do, as well as what drives them to do it.

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