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Understanding the Three Types of B2B Competitors & How to Perform an Effective Competitor Analysis

Posted by IndustrySelect on Tuesday, January 19, 2021

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4 MIN. READ

Your company provides an array of quality goods to manufacturers, yet your sales are slipping. Your company prides itself on the services you offer to manufacturers, yet sales remain stagnant. Why? Competitors.

You know that you have competitors. Successfully running your company is at the forefront of your mind, but somewhere in the back, you know that competitors exist. You may even think that you have a pretty good idea of which companies comprise your main competitors.

It’s time to bring those thoughts to the forefront and perform a competitor analysis.

What Are the Three Types of Competitors?

You have three main types of competitors – direct, indirect and replacement.

A direct competitor is one that provides the same product or service to manufacturers as your company does. For example, your company may provide client relationship management (CRM) software and services that enable manufacturers to better track and attract clients. You are not alone in this market space. Other companies offer the same product and service.

An indirect competitor is one that provides a similar product or service. In the case of providing CRM software and services, an indirect competitor may provide consulting services for manufacturers using freeware CRMs. A manufacturing company may have enough technology experience to download a free software program, select the components that are most useful and upload their client database. However, the staff may not have enough experience to modify one of the modules, so the manufacturer hires a consultant who specializes in their particular freeware program.

A replacement competitor provides a product or service that is somewhat similar to your offerings but different enough that it is a viable alternative. Again, using the CRM software and services example, a replacement competitor may offer cloud services or complete CRM management. In this case, a manufacturing company would only need to request reports or send information for dissemination to its clients to the replacement competitor on an as-needed basis.

Start with a simple internet search for your own company to see the names of some of your competitors. Try searching keywords to garner more competition too.

How Do You Go About a Competitor Analysis?

Now that you know your company has more competitors than were originally on your list, your next step is to find out as much information about your competition as you can so you can regain the upper hand.

Step away from your business-owner hat and throw your own company into the mix. Evaluate the market through the eyes of the customer. Complete a competitor analysis or a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis on your and your competition’s offerings from a customer’s point of view. Whether your business is just starting out or well-established, periodic competition SWOT analyses allow you to benchmark your progress, maintain your customer base and grow in the proper direction.

A thorough analysis provides you with insights into trends that you may have missed, such as the ability to offer your CRM both as an on-site program and as a cloud service. The information also points out weaknesses in your competition, such as a lack of vigilant cybersecurity measures that would make their product or service less desirable in the eyes of your customers. Combine the best of the opportunities to consider company changes.

How Should Your Company Use the Analysis?

Choose those companies that most closely align with yours. Branching out too far may waste precious resources on customers that you are unlikely to capture.

Once you have culled your list, compare your marketing strategy with your competitors'. Start with a comparison of websites (since the majority of purchases begin with a customer's online search). Focus on the landing pages, the organization and the features of each site, including your own. While doing so, keep in mind the customer preferences that you learned through your competitor analysis. How do all of the websites align with these customer preferences? What simple improvements could you implement to make your front page more appealing to the customers that you want to attract?

Next, move to social media outlets. If you haven’t already established a social media presence, do so. See how your competition is – or isn't – using social media effectively. Always remember the “social” part of social media. Simply tweeting about your product isn’t going to increase your sales. You need to engage customers and leads in a dialog about the industry, your product, similar products, trends, and their wish list of what the ideal product or service would be. The more often others mention your company’s name, especially in a favorable light compared to your competition, the more customers you will draw.

So bring your competitors to the forefront of your business plan, prepare an honest competitor analysis and use your new-found knowledge to regain your competitive market edge.

Understanding your competitors is a vital step to building your business -- and so is having access to top quality data! Whether you’re selling packaging services, marketing for a machinery company, helping manufacturers with their staffing needs or simply looking to expand into new markets, IndustrySelect is the most effective way to reach decision makers in the manufacturing world. Click here to try out your free demo!

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