Episode 414: Competitive Analysis: How often are you checking yours?
In this episode, Fiona discusses the powerful tool of a competitive matrix to help business owners. Learn how to use this framework to compare your business against competitors. Tune in!
You'll Learn How To:
Introduction to the competitive matrix and its importance
Difference between positioning and competition
Attributes that influence customer loyalty in a bakery example
Step-by-step guide to creating and using a competitive matrix
Assigning weight to different attributes and calculating scores
Application of the competitive matrix
Importance of understanding competitors
Leveraging competitive analysis
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Those things are the attributes that your audience cares about. It's service, choice of goods, the atmosphere, the fit-out, the seating, the coffee and tea options, and then parking. You've got these seven attributes that people want to think about or will be thinking about when it comes to which bakery they are going to go and buy their baked goods from. That is the first thing you want to think about. This is what people are seeking. These are the attributes, these are the features and the things that they are looking for when they're going to become loyal to a particular bakery. Let's say in this imaginary location, there are three other bakeries, two of whom are brands that have communities that know them and one which isn't very well known and would be considered as a business, not a brand. What you're going to do is compare your bakery with these other three bakery brands using the metrics that you have deemed important to your audience.
Welcome to episode 414 of the My Daily Business podcast. Today is a coaching episode, and this particular thing that I'm going to be talking about and sharing with you is something that honestly the amount of times, I've shared this with clients and they have had such breakthrough moments and such real epiphanies about what they want to do and how they're showing up in their business. These are from people who have been newer to business, but some of them are 10 or even 15 years in and they have never done this exercise. when we do it together, it can be a change in gaming for them. Change gaming, is that even a word? Before we get stuck into that, and I share with you what it is that is so amazing for these clients, I want to of course acknowledge where I'm coming from and pay my respects and acknowledge the traditional owners and custodians of these lands. That's the Wurundjeri and Wurrung people of the Kulin Nation. And I pay my respects to their elders, past, and present, and acknowledge that sovereignty has never been ceded.
The other thing I wanted to mention is that currently if you're reading this in real time, we are just about to finish the Biz for Kids Auction. This is an auction where more than a hundred items have been donated by other small business owners. Many of those items can help you in your business, such as leadership training, financial strategy, help, assistance with your financial literacy, legal strategy, coaching, and a whole bunch of business coaching. There's even a whole bunch of things in there that I've donated. If you want to start a podcast, there's my How to Start a Podcast course as well as some coaching with me on your podcast ideas and strategy moving forward.
There are just so many amazing things in there. If you're reading this in real time, that should be Thursday, the 23rd of May. You have about two or three more days of this. It finishes at 11:59 PM Australian Eastern Standard Time, Saturday the 25th of May. If you want to get onto that, you can find all the information just over at airauctioneer.com/bizforkids. Of course, we'll link to that in the show notes and on social media, if you go on over to my social media or Kylie Lewis from Of Kin who is also running this with me and hosting it, you can find the link to it on both of our Instagram profiles. Let's get into today's coaching episode.
As I alluded to at the start of this episode, there are many frameworks that help my clients as I go through one-on-one coaching or group coaching with them. But there's one in particular that I'm going to talk about today that honestly has changed the game for a number of my clients when I've spoken about this and we've worked through this framework together. What is the framework? The framework is the competitive matrix. Competitive Analysis matrix, or you can just call it your competition matrix, whatever you want to call it. The point is to do it. Firstly, I want to talk about the difference between positioning and competition. Often people think they are one and the same thing. The first positioning is why somebody may think of your brand first when it comes to deciding on where they're going to get married and where they're going to go for dinner.
There's a positioning there. If they buy a particular brand bag or some earrings on a special occasion for somebody, there's a level of positioning that has helped them influence them to make that decision to purchase or even browse your brand. But the competitor analysis is taking this concept of positioning and then analysing the key attributes that make you stand out in this way. For example, it could be the cost, it could be a sense of community because your brand or business aligns with particular causes that people care about. It could be your location, it could be your size, it could be your customer service and the level, or lack thereof. It could be your years of experience, it could be your price point. Let's say, for example, you are an online educator and you want to start selling courses.
We do the same thing here at My Daily Business. We sell courses. let's say you are thinking about starting to sell courses or online education at some point, and you think, okay, I've heard of brands or platforms like Kajabi, Teachable, Thinkific, and LearnWorlds. I've thought about them and I've heard of them and maybe you even heard somebody on a business podcast who was talking about Kajabi. That brand is then positioned in your mind as one of the best because at least from what you've heard, it's popular with your business peers. That is the positioning. And you may hear, let's say you listen to five podcasts and in each of them somebody's talking about online courses and four out of the five say, we use Kajabi to house our online course. That is allowing Kajabi to be positioned in a certain space within your mind.
That's positioning. But then what you'd want to do if you were looking for an online platform to house your online education tools is then do some competitor analysis. you'd look at comparing Kajabi with competitors in the marketplace using the features and benefits that are important to you. For example, you might be like, you'd want to think about like what are the metrics that I want to compare across. Kajabi, Thinkific, Teachable, like what are the things I want to compare? You might say, it's the price. It's how many products can I have on there? How easy is the user interface to use? How beautiful does it look for my audience? A bunch of other metrics. If you were Kajabi in that instance, then you'd be thinking, which metrics does my ideal audience use to compare me to others in the marketplace?
Yes, you can have the top positioning, but it doesn't mean that you're always the best. We can all think of let's say electric cars. We can all think of a brand that has nailed the positioning. However, they're not the only ones doing it. you might decide, I want to go for a hybrid model because I want to be able to drive long distances and not worry about powering up your batteries. I've been having a lot of conversations with Uber drivers recently about this. I've noticed that pretty much a hundred percent of the Ubers that I've got recently have all been hybrid models. When I've talked to them about this exact thing, they're like, I was interested in that particular electric vehicle. However, I realised in my line of work that I wanted a hybrid model.
You can have a strong positioning. That doesn't mean that you're always going to be the number one across all competition for your particular audience and your audience may change. What they want today may be completely different to what they're looking for in five years. These are things to think about, but I'm getting sidetracked. I want to talk about the competitive matrix because it's an easy tool to understand and to help when it comes to your brand and not just your brand but your marketing. You can use this for any element of your business and then start comparing things. How does it work? Let me tell you an example because that's going to help highlight it first. Let's imagine that you are a bakery and you are opening your bakery in a particular suburb and I'm just going to choose a suburb of Melbourne and not a real suburb.
I'm just going to imagine that you're in the suburbs of Melbourne, which is where I live, and you have a bakery and you're like, I'm going to do some competitive analysis of where I'm moving into just so that I can understand how we need to position ourselves and market the elements that we discover from our competitive matrix that mean we are not just different but better than the competition. You first want to think about in terms of your positioning, how you want to be positioned. Let's say you are trying to become known as the go-to brand for luxurious delicacies and like the best breads and pastries and all the things that bakeries offer in the market in a particular location. That's your objective. You want to have an objective as a brand, it's pretty simple stuff, but sometimes people don't stop and think what are we trying to do here?
But let's say that's what you're trying to do. You're a bakery, you're trying to be the high end go-to luxurious delicacies. You might decide that people in the location where you are opening your bakery and it could be a second or third bakery or it could be your first they are seeking, so what are the attributes that they want from a bakery? You decide and you've done some research, you've maybe analysed a couple of things, you've maybe done some focus groups, you've maybe just asked around, you've maybe done some validation questions or maybe you've just gone into Facebook groups and done some stalking. you might decide, okay, the things that matter to them are service. The customer service that is in there when I go in people say hello and they're friendly and all of that.
It could be the choice of goods including things like gluten-free dairy-free vegan options that are there. It could be the atmosphere. When you go in and you're like, this is a nice place, it is a bit fancy. There's a nice atmosphere, it could be the fit out. The fit-out may be things like, is there enough room for a pram? Is there enough or a stroller? Is there enough room for wheelchairs, and walkers? Again, this is where if you're looking at say a suburb where there is a higher percentage of new young families or there is a higher percentage of elderly people that need a walker, you need to be looking at that because that is an element that your audience is expecting from you. Pretty much everyone should be looking at that stuff. I remember a side note, I was working on a retail store fit-out years and years ago with a client and they were not aware and nobody had told them, which I thought would be just mandatory in that line of work with builders.
But you are supposed to be able to at least have the width of a wheelchair and pram between pillars, like between say counters within a retail shop. They were like, I did not know that. I'm like, that is a requirement. Look into that. If you are in the retail space and you're doing some fit-outs because they were like? And I get it. Because every centimetre in those places matters. Back to what I'm talking about. The fit-out could be one, seating is another one. Some bakeries will require seats. That's what your audience wants, particularly if you're like, let's say right out in the burbs and people go and they're going to have a cup of tea or a cup of coffee and a piece of baked goods, they want to sit down and enjoy it versus, I don't know, if you're in the inner city and people are just like flying through and grabbing it and going on with their day or grabbing something quickly to get back to work or before work or whatever it is.
Another one that may be very much of interest to these people, particularly here in Melbourne, is your coffee options or just let's say hot beverage options. Do you have a range of teas and coffees available or hot chocolate or matcha or all the other things? Or do you just literally have one or two options there? And then parking could be another thing. I'm using massive generalisations here, but let's say you have an inner city bakery or an inner city suburb bakery, maybe you don't need as much parking because maybe there are people on bicycles, people are catching public transport, there are people just walking. you're going to get that foot traffic versus if you are in a country town or you are in certain suburbs where people need to drive or some vehicle needs to be able to park to utilise the bakery, then that might be important to your audience.
It depends on where you're opening up this bakery. But those things firstly are the attributes that your audience cares about. Again, it's service, choice of goods, the atmosphere, the fit-out, the seating, the coffee and tea options, and then parking. You've got these 7 attributes that people want to think about or will be thinking about when it comes to which bakery they are going to go and buy their baked goods from. That is the first thing you want to think about. This is what people are seeking, these are the attributes, these are the features and the things that they are looking for when they are going to become loyal to a particular bakery. Let's say in this imaginary location, there are three other bakeries, two of whom are brands that have communities that know them and one which isn't very well known and would be considered as a business, a business only, not a brand.
What you're going to do is compare your bakery with these other three bakery brands, using the metrics that you have deemed important to your audience. They're the seven metrics I just went through. Service, choice of goods, atmosphere, fit-out, seating, coffee, tea options, and parking. To do this though, you first need to list those seven items down. Now you can have five, you can have eight, you can have 10. I'd probably not go past eight or nine to be real. And you need at least four. You can't be comparing yourself to everyone on just like three metrics and that's it. You need to go into the details here. Let's say you have seven or eight, you first then want to look at those seven or eight items. The best way to do this I've found is to put it into an Excel Sheet.
In column one, you put each of those items on a line and then you know the next line. On the first line, you'd perhaps service on the second line choice of goods on the third atmosphere on. When you have done that, then in the second column you are going to assign a weight to each metric or a percentage of importance to each metric. When all of those seven percentages are added up, it equals a hundred percent or one if it's like decimal points. Let's say you had four metrics or four attributes, you might say all of them are equal. They're all worth 25% or 0.25. I know this can get tricky to get your head around, especially if you're just reading this podcast. you have the first column that has the attributes, and the second column is the weight assigned to each.
In some cases, you might decide that parking is important. Let's say you are in a regional town and people are not walking past there, they are only driving their trucks and driving their utes and doing all of the things. You need to have some parking spots in front of your bakery or on the side or around the back or whatever. You might decide parking is worth 0.3 or it's worth 30% and then you might decide that the seating options are worth 10%. Seating is less important to people in your particular area than parking. Because you've assigned parking the weight of 30% and seating 10%. You want to have your attributes listed. Then you want to assign a weight for each. When you add up all of the different weights, so 0.3 or 30% plus 10% plus plus plus, they have to equal a hundred percent account equal more or less.
They have to all add up. You may have to change some things. I was just doing this with a client the other day and we were moving around some parts to be like, well that then that can be 5% and that one can be 10% and that other one can remain as 15%. You'll be moving things around. This is when you're getting clear on like what is the most important. If you had only a small percentage to give to one, what is the least important? And then if you've got a bigger percentage, what is the most important thing that people are looking for? For example, let's say you're a business coach like myself and you put down the things that people are interested in. In some cases, you might have experience that they have, not just with building their own business but building loads of different businesses or working in lots of different types of companies.
That experience might be worth 50%. You might be like that is the number one thing that people care about. Do I have a level of experience in particular elements of business that they are looking for? That is you might say 0.5, whereas you may decide that when you're looking at a business coach, let's say you're looking at a business coach that has nothing to do with marketing and nothing to do with social media, you might decide that them having a social media presence is not that important to me. You might put that at 5%. I'm just mucking around here, these aren't in concrete or anything, but just to give you a bit of an idea, if you're a service base versus, you know me talking about a bakery, bakery still in service, but they're selling products.
In column one, you've got your attributes in column two, you've got to wait to assign to each attribute. Then what you're going to do is map out your competitors however many competitors you want to have. Let's say in this example where I've talked about the bakery, in the third column you'll have bakery one. In that third column, you are going to rate that bakery on each of the attributes and you're going to rate them from one to five where one is crap and five is killing it. You might go okay with service, how good is the service at the bakery one? This is where you're going to have to go and do some stalking or a bit of undercover work.
If you are competing against another online business, this is where you may be downloading their freebies. doing a little bit of research and looking at what is good about them. Because even, I mean you can stand back sometimes and look at your competitors and be like, either like, they're killing it or they're crap or whatever. And not go in and have a look at like, what are they doing and are they doing it better and are they doing it? How are they doing it? And just not in a, you have to be in a bit of a good strong head space to do this, but not in, I'm going to feel bad about myself way, but just in a, let me go in and see what's happening. We used to do this all the time when I worked at different companies, we would all sign up for the competitors' emails, we would see them come out, we would see their social media posts and it was not like we were spending heaps and heaps of time on it because I think that is also down.
You can go down a rabbit hole and it's just not helpful. But to look at it and be like, they're doing that, or they've started their spring racing promotions early, or they've started their they're doing Chinese New Year early, or they're doing this or and, and having that sense of what's going on in the marketplace is important. In that first sense, you've got bakery one and you are comp, you are looking between, you're rating them between one and five as to how good their service is. Let's say you rate them four out of five, then you rate bakery two and you rate them three out of five, then you rate bakery three and you might rate them two out of five. And then you rate yourself and let's say your bakery, you already know that you're going to have incredible service.
You rate yourself four out of five. You and Bakery One are in competition because the service is not as good as the other two bakeries. Then you're going to do the same for all of those attributes. For the choice of goods, when we go in, do they have any gluten-free options, do they have any dairy-free options? Do they have as much range as we are going to have? Again, you're going to rate bakeries one, two, and three and then yourself according to what you think their range of goods is from one to five where one is crap and five is good. What you're going to end up with is a bit of a table where bakery 1, 2, 3 and yourself have got a column where you've got ratings between one and five, but then you have to multiply their ratings by the weight that you gave that attribute.
You've got your attributes in column one, you've got your weight in column two, and then you've got your scores in column three. What you're going to do is go, I gave the bakery one four out of five for service and service. Let's say you've decided that service is important, you've given it a 20% rating, you then multiply the four by the 20% or 0.2 and you'll get 0.8. The bakery for service scored 0.8. And then you'll go through all the other attributes against the rating. I know this is quite confusing. you'll be like, for let's say the seating, the seating options for bakery one, you gave them five out of five because they've got amazing seating. And let's say again you gave that rating of seating 20%, so five times 20% is one. You're going to add up the scores for all of the bakeries, you'd do the same thing for the other three and you'd add up the scores and you might decide, bakery one is like killing it in terms of seating, they are also killing it in terms of their range of goods and also their service.
You'd be comparing yours and you'd be looking at the gaps or where you are doing not a great job in comparison to others. Also important that you are doing a good job. If you think, we have amazing seating options and the other bakeries don't have as good seating options, then that might be something that you talk about more in your marketing and you show, that people are sitting down and comfortably enjoying themselves here and you can kick back for the afternoon or bring your laptop in and do a bit of work over a slice of cake and a coffee because we have a beautiful setup here and it's comfortable and we have great seating options. Or hey get together with your friends after you do the school drop off and you can all sit around our beautiful oak table or whatever it is because you know that that seating is part of what makes you not just different but better for your particular audience than the other bakeries on offer.
I hope that makes sense. I'll just repeat how the table might look. You've got your attributes in column one. In column two, you've got a waiting for each of those. Let's say 0.2, 0.3, 0.1. That rating or weight has to add up to one at the bottom. You can't have 20%, 20%, 80%, or 3%, it has to add up all the percentages, the weight that you're giving each attribute combined needs to add up to one or 100%. Then in the next column, you've got whatever your com competition is. For this example, I had bakery one and you've got all of their ratings from one to five, and then the score overall. You're multiplying the rating by the weight and then you're coming up with a number at the end. This could work for the overall business and comparing your business to others that are out there, but it can also just be something that you do for marketing.
You might decide, I am going to look at my competition and I'm going to look at the different marketing channels that my audience, or maybe your combined audience is keen. You might decide, let's say you are a software platform, chances are the majority of software platforms are doing tutorials of some like how to best use this software. Let's say in particular, you are a project management software platform. You've got Trello, Notion, Clickup, Monday, and Asana, I mean they're just never-ending. I feel like there's always a new one coming out. Milanote, there's so many and you might decide that, one of the places that my audience would expect us to be on and market to them is YouTube because they expect to go and have a look at tutorials on how to use this platform.
If you have ever signed up to one of these platforms, chances are you have Googled how to do this or you've watched some of their tutorials on their platform, and that's great if they've got tutorials on their platform. But a lot of people will use YouTube. YouTube is the second biggest search engine outside of Google. That is where the majority of people will still go to try and watch a video tutorial on how to use a product. They're not going to necessarily just watch them all on your particular platform. You put down YouTube as one of your attributes and then you'd be like, what weight are we going to give to YouTube versus, let's say you've got YouTube, LinkedIn, Instagram, TikTok, email, website, you might decide YouTube is the most important. LinkedIn is the least important.
I'm just making this up. It depends on what your platform is. Don't tell me that LinkedIn is not important. It's very important. you might then go, where are we going to focus our marketing spend? We're going to focus on YouTube because we are going to build that up. use the right SEO, and do a whole bunch of things because that is what our audience expects. If we look at our competitors, all of them have a strong YouTube presence. Or you might have another attribute in there, which is ambassador program. you might be like, here's a bunch of like influencers in that productivity space or content creator space that are partnering with our competitors. What are we doing? Again, this is not to look at your competitors and go, I'm going to copy everything they're doing.
On the flip side you have to do what they're doing, not at all, but it's to show you where the gaps may lie. But also on the flip side, maybe you have an incredible YouTube presence and the others don't. You're like, this is something that we are doing well. We're going to talk about that more when it comes to the onboarding of people onto our platform. We're going to talk about it, maybe we've got some super users and we are going to interview them on YouTube and interview them as a video and then repurpose it across different platforms, including YouTube. you might just use it in that instance. You could use it for any number of things. I have just gone through this with the people who are going through the first round of my How to Get Your Book Published course in the coaching program.
When you look at comparing your book to other books that are out there, when you are pulling your proposal together and pitching to a publisher, part of that is your competitive analysis of your book, how you imagine your book will be in comparison to others that are in the marketplace at the moment. we were looking at doing that from a book perspective. You can do it for any number of things. If you wanted to, I don't date, I've been married for a long time, but I guess you could let's say you were, I'm thinking about multiple different people and which one's going to be better in the long run. You could do a competitive analysis matrix, so it can be used for any number of things, but in business, it can be such a useful tool to go through and have a look at like, firstly, what does our audience care about?
Secondly, how well are we doing that in comparison to others in the market? That is it for today's coaching episode, looking at your competitive matrix. This is something that I talked about in my new book that is going to come out on the 4th of September in Australia and New Zealand and the 4th of December in the UK and US, we will be having pre-orders available in the next few months. I'm just looking at the date. Have an eye out for that and if you want to be first to hear about any of that, then please make sure you're subscribed to my Sunday email. The people on the Sunday email are always the first to hear about anything that I'm launching or doing. We are going to have a launch party for this We are so excited. That is happening in Melbourne and if you live in Melbourne and you want to be part of that, again, make sure that you're on the Sunday email because those people will get the invitation first.
You can just subscribe to the Sunday email at mydailybusiness.com/subscribe. I also offer a whole bunch of insights and tips and personal stories on that email that has been going now for years and years, I think seven years, I've been sending that email and thousands of small business owners on it, which is fantastic. Again, if you want to subscribe and you're not already, just go to mydailybusiness.com/subscribe. And if you want to go through any of this today in text format, and I understand you may well, because it might be hard to get your head around it when you are just listening to it, you can find the show notes for today, which includes a full transcript of this episode at mydailybusiness.com/podcast/414. Thank you so much for reading and I'll see you next time.
