A client came to me several years ago wishing to establish and brand a multi-location dry cleaning business in a major metro area.
He was a refreshing change from most clients in that he appreciated the need to differentiate his business from established competitors. He hadn’t heard the term “positioning” before we talked, but he was well on his way of establishing one through the preliminary work he’d done.
A Competitive Analysis
The first step in differentiating your business is to know the positions of your competitors. So the first thing my client had done was to develop a checklist and then visit each and every significant dry cleaner in his market. He not only did business with each, he spoke to customers entering the shops as if he were looking for a recommendation for a dry cleaner.
He first developed the checklist based upon his knowledge of the industry and his market, but he was flexible enough to make a few additions as he heard the responses from his competitor’s customers.
Identifying Differentiating Attributes
There were, of course, the obvious characteristics that may or may not be potential differentiators – store hours, location, drive through service, delivery, work done on premise, breadth of services. These were just listed for each location. For competitors with more than one location, he would at least visit and rate three locations.
Then he developed a pricing matrix to chart posted prices. He also noted the amount and extent of couponing, bulk discounts and other incentive activity.
Next he listed several factors concerning stores and employees – location, identification, appearance, cleanliness, counter clutter, helpfulness, knowledge and attitude – and applied an A to F grading system to them.
In visiting with customers, he asked about their motivation for visiting this particular store, whether they only used this competitor, what they liked about this provider, whether the provider participated in community, and whether they had used a coupon or other incentive while visiting.
Finally, he collected competitive ads – coupons, fliers, newspaper ads, etc. He got some info from media reps about who was advertising and at what volumes. He visited websites and observed signage.
Information Determines Position
He presented all this raw data in individual competitor “reports”. I then plotted those attributes he had graded, see diagram below, and analyzed the remaining information to establish a position which was relatively unoccupied, but where customers said they would like to see a dry cleaner.
That position will be the subject of a future blog. The point of this one was to demonstrate how easy but vital the collection and analysis of competitive data is to the positioning process, even for a local business with few competitors.