Your Competitors Can Help You

Analyze your competition. Most businesses think they do this, but most (especially small businesses) do don’t do this well.

Analyze your competition. Most businesses think they do this, but most (especially small businesses) do don’t do this well.

If you are a product company, buy your competitors’ products. Use the products; read the manuals; disassemble the products and look at the quality of materials and construction.
Call up your competitors and pretend to be a prospective customer. Did you have a good experience when you contacted your competitors?

When you go to online review sites to see what people are saying about your business, take a few extra minutes to see what people are saying about your competitors. You may see something that represents opportunity for you.

These are old and well-known tactics, but I’m always surprised at how infrequently small businesses use these easy and low-cost approaches to get ideas for how they can be better than their competition.

A few years ago, a friend used some of these techniques for analyzing competition to help him launch a business that became very successful.

He lived in a small town in southern New Mexico. His long-term employer was on the verge of bankruptcy and he needed to find a new source of income. He thought that there was a market opportunity in installation of residential solar panels.

He had never installed solar panels before. He wasn’t a licensed electrician. There was well-established competition – several companies in town had been offering solar panel installation for many years. But only about 10% of the houses in town had solar panels installed, so there was a significant available market.

He called every solar panel installer in the area and asked each of them to prepare a quote for installing panels on his home. He asked a lot of questions. He looked at their websites. He got literature on the panels and inverters that they used and did research on the panels and inverters.

He wrote extensive notes about his experience with each company, and then identified areas where he could improve on the experiences. He found a line of panels and inverters that had features that were better than his competitors.

He developed a website where his customers could track on an hourly basis how much energy their solar panels were generating and how much money they were saving on their electric bill. (This is common now, but it was novel at that time.)

A complete list of all the areas he identified to differentiate himself from the existing competition would make this article too long. The gist of the story is: Eighteen months after he launched his business he was the largest solar panel installer in town and he maintained that position until he sold the business and retired.

A careful analysis of his competition allowed him to identify ways to differentiate his business and be very successful.

Every business tries to analyze their competition. How well do you do that? Do you analyze your competition to help you generate new ideas for your business? If you would like to implement some of these techniques in your organization, please contact Clint to help you get started.

Mining Your Own Business

Your employees might be a goldmine. If you’re taking your first steps in setting up an innovation program in your company, consider using this technique for generating new ideas.

That’s right! Mining (not “minding”) your own business…

Your employees might be a goldmine. If you’re taking your first steps in setting up an innovation program in your company, consider using this technique for generating new ideas. This can be a low-cost and fast way to generate innovative concepts for your business. Here’s a situation where this technique worked well.

Innovate or Die

Newpoint was a small consumer electronics company that made surge protectors and uninterruptible power supplies.

The customers of Newpoint were the largest consumer electronics retailers in the US. The retailers liked Newpoint’s products and appreciated the company’s service (timely delivery of good quality products at prices that allowed the retailers to make their target profit margins). But the buyers repeatedly told Newpoint that they needed to add SKUs to their line or they would be dropped as a vendor. Buyers at big box retailers prefer to have a few suppliers who offer a broad range of merchandise rather than many suppliers who offer only a few SKUs each.

Newpoint had been attempting to innovate for more than a year – without success. They had an innovation logjam that seemed intractable. And if they didn’t innovate, they were almost certainly going to lose every one of their major accounts.

When Newpoint contacted Clint, they had a very short fuse burning. It really was a case of “innovate or die”.

Clint interviewed key personnel in the company to find out how they had been trying to innovate and why they hadn’t succeeded to date. He had to come up with an innovation strategy that would generate some viable ideas very quickly and that would break the logjam that was plaguing Newpoint.

The interviews identified two problems in the innovation process that were the root of the logjam:

  1. Newpoint lacked a good process for generating new product ideas. This is critical; you can’t develop new products if you don’t have new ideas. And the more product ideas you have to choose from, the better your chances of finding a winning concept in the pool of ideas.
  2. The process for vetting and approving new product proposals made it almost impossible for a new product idea to be approved. Vetoes were easy; approvals were difficult.

Clint developed a two-point strategy to solve these problems.

  1. There are a lot of ways to generate new product ideas; Newpoint needed a method that was simple, straightforward and fast – active solicitation of ideas from every employee of the company. The dearth of new ideas was overcome swiftly. Within two weeks, the company had a pool of almost three hundred ideas for new products. The idea pool had gone from empty to overflowing.
  2. To break the approval logjam, Clint introduced a modified Delphi technique that utilizes group input to reach a consensus on the best ideas. This technique prevented any one individual from having veto power. The Delphi technique was applied in a series of meetings with 6 to 8 employees at each meeting. Representatives of every department in the company were present at each meeting to assure broad input when evaluating the new product ideas.

Eight weeks after the start of the project the company had a list of five “hot product” families to start developing and about twenty runner-up ideas waiting in queue. The 250+ other ideas were not forgotten – there was a procedure to make sure that product ideas with potential did not get swept under the rug. And new product ideas continued to flow in at a steady pace.

The final phase of implementation was to actually develop the products. Clint worked with the CEO to hire a VP of Product Development. The VP was brought on board, was mentored in Newpoint’s innovation processes, and was then given the reins and told to run. At the next Consumer Electronics Show in Las Vegas (less than eight months later) the company had two new product categories to show to buyers, and two more product categories under development that they could start pre-selling.

This is an example of how a stagnant product development program can be revitalized quickly and inexpensively. There are many approaches to innovating. This is just one example. If your product development program feels like it’s stagnating, please call or email Clint to see if he can help you.

Listen to Your Customers

Every business knows that customer input can be valuable. Customer input can be a very fast and low-cost way to generate ideas for new products. How effective is your company at extracting this valuable information?

How Many Ways Are You Getting Input From Your Customers?

Every business knows that customer input can be valuable for improving your products (or services), and for identifying opportunities for new products and services.  Customer input can be a very fast and low-cost way to generate ideas for new products.

How effective is your company at extracting this valuable information?

Here are five different ways to get input from your customers.  How many of them are you using?

1) Have your salespeople get direct customer input

This is the most commonly used method to get customer input, but most companies don’t utilize this approach effectively.  Every one of your salespeople should have a written list of questions that they ask at the end of every sales call.  A well-scripted set of questions can elicit a treasure trove of valuable input.

To get you started, here are suggestions for questions to ask. You should tailor this list to your unique circumstances.

  • What products or services can you see us offering that we don’t offer now?
  • What products or services do you get from other suppliers that you think could be better?
  • What new features could we add to our existing products or services that would make them more helpful for you?
  • What can we do to make our business serve you better?
  • Is there a product or service you wish you could get that nobody is offering?
  • Does your company have plans for expansion into new areas?  Is there something we could offer to help with your expansion?

Most customers appreciate the opportunity to provide this kind of input.  They will feel like you value their opinion.  And if you modify a product or develop a new product as a result of their comments they will be positively predisposed to the new product.


2)Talk to ex-customers

Losing a customer is painful – but it can also be a source of valuable information that can help you innovate. Always interview ex-customers to find out why they left. Quite often, the first reason they give will not be the real or the only reason. When interviewing an ex-customer, employ “polite persistence” to get the real reason(s) for their departure. Be sure to ask questions that explore the following.

  • Competition
    • Did you find a similar product or service for a better price?
    • Did you find a different product or service that is better for you?
  • Internal factors
    • Are there shortcomings in the quality or features of our product or service?
    • Do we need to do better in after-sales service and support?
    • Do we need to change how we interface with you?
  • Customer issues
    • Are there changes at your company that make our product/service no longer viable for you?
  • Market issues
    • Are there changes in the market that make our product less attractive? Is there something we can do to address those market changes?

Keep asking questions – politely but persistently – until you feel you really understand all of the reasons the customer left.  You will almost always learn something that opens a door to innovation.  And you might even earn the customer back.


3) Observe customers using your products

This can be very illuminating if done properly.  There are a few keys to getting good results from this kind of exercise

  • For this exercise, “customer” means the end user of your product(s).  In many cases, this will be a different person from the buyer.
  • Observe customers who are experienced users of your product, using the product in its normal use environment.
    • Are they using the product the way you intended or envisioned it being used? If not, what are they doing differently and why?
    • Are they making use of all the features of the product? If not, why are some features not being used? Because the users aren’t aware of the features? Or because the features are awkward to use? Or because the features aren’t useful?
  • Find some people who would be typical end users of your product, but who have never seen or used the product before. Give them your product in a typical use environment, and let them use it.
    • Make the same kinds of observations as above. More often than not, you will see confusion or frustration. When you see this, view it as an opportunity to innovate and improve.

An inviolable rule for these exercises:  You must be silent while observing.  Ideally, film the subjects while they are using your product(s) so that you aren’t even in the same room with them.  If you’re in the room with them, they’ll be tempted to ask you questions.  And if you give even a hint of an answer the exercise is tainted.

Careful observation of customers using your product(s) can yield significant insights and can provide ideas for changes and improvements to your product line.


4) Observe customers using your competitors’ products

This is directly analogous to the previous technique, but with the obvious difference that you will observe end users’ interaction with products that you compete with.  You may observe shortcomings or weaknesses in your competitors’ products that you can exploit.  This technique can be an opportunity to beat your competitors at their own game.


5) What are people saying about you?

Forget about your business for a moment….

How often do you read online reviews of a product or company?  And how often do you see a representative of the company actively respond to online reviews – good and bad?

What impression do you get about a company that responds to reviews — showing appreciation for good reviews and genuine concern for bad reviews?  How does that compare to your impression of a company that doesn’t respond to reviews at all?

A survey of online review sites indicates that only about 10% of companies actively monitor and respond to online reviews.

Assign one or two people in your organization to actively monitor online reviews of your company and your products or services.  This shouldn’t take much time – maybe 20 minutes per week.  They should respond to almost every review – expressing thanks for good reviews and reaching out to address the concerns in negative reviews.  But this is just the skin on the apple.

They should also analyze the reviews, looking for patterns that can help you improve your products or services.  What features are cited most frequently as positive?  What are the most common complaints?  Do they express frustration with the user interface?  Does the user manual confuse them?  If customers didn’t like the product, do they mention alternate products that they prefer?

If this is done well (and if you get a reasonable number of online reviews), very quickly you will have a database of valuable information that you can mine for ideas for innovation.

Every business tries to pay attention to their customers, but not all businesses do this well.  You can use these five techniques to extract valuable information from your customers that can provide new avenues for innovating.  If you would like to implement some of these techniques in your organization, please contact Clint to help you get started.

Getting Started On Innovation

Coming up with innovative new ideas is often the biggest hurdle in innovation.

One of the reasons that many businesses do not innovate actively is because the first step – coming up with new ideas – can be daunting.

Coming up with innovative new ideas is often the biggest hurdle in innovation.

One of the reasons that many businesses do not innovate actively is because the first step – coming up with new ideas – can be daunting. You might have a mental image of bringing a handful of your staff into a meeting room with a blank white board, and you say “OK, somebody start innovating.” And everybody stares at that white board like deer looking at the headlights of an oncoming car.

Over the course of my career I have encountered companies in situations like this. They know they need to innovate; they want to innovate; but the bucket of ideas is empty. I have also encountered companies that are prolific at generating innovative ideas for new products and services with regularity, and companies somewhere on the spectrum between these two extremes.

I have compiled a list of techniques that small businesses can use to generate ideas for new products and services. I have analyzed and sorted the techniques based on how much time and money it takes to implement them (in general, less time and money is better) and how effective they are at spawning innovative new ideas (in general, more is better).

Papers that describe a number of these techniques are available on the Articles page of the website, in the section on Innovation. I will add new articles at a rate of about one every other month.

If you read the papers on innovation, you can assess which ones would be most applicable to your business and can create a list of techniques you want to use to start innovating. Having a list like this is a great tool for breaking the first big logjam in innovation – coming up with new ideas.

There is a rough order in which I add articles about innovation to the website. I start with techniques that are easiest and cheapest to implement, that are most broadly applicable, and/or are the most reliable at producing results – i.e. at generating new innovative ideas. As I continue to add articles, we get to techniques for innovation that are a bit more costly, or are not as broadly applicable, or are effective in a narrower range of situations or circumstances.

But I have found all of these techniques can be very powerful when they are used in the right situation. And all of these techniques are suitable for small business with limited budgets.