All businesses have competition, which is just a fact of life for business owners. Identifying who those competitors are however, is much more difficult. While attempting to identify the direct and indirect competitors is the common approach, there is a less well known form of competition referred to as “phantom competitors”.
Phantom competitors are the substitute goods and services that fulfill the same role as your own. Or they can even represent the probability that the customer decides not to buy anything, and simply keeps their money. An example of this would be two competing restaurants who are also competing against the choice of staying home to eat. Finding these competitors is harder than finding the other two varieties. Here are 5 ways of trying to find your phantom competitors that go a little outside of the box:
1: Social Media Feeds:
These days there is social media discussion about practically everything. Most likely your business’s products or services are no exception. Listen to the comments, complaints, compliments, and reviews of your customers. Hidden within all of this data, are the true shortcomings of your service or product when it comes to meeting the needs of customers. This social media information might also tip you off to how a phantom competitor is currently better fulfilling the unmet needs of consumers.
2: Analyze your direct and indirect competitors:
Look to your direct and indirect competitors for ideas on how to address the problems posed by phantom competitors. Especially in the case of direct competitors, your business is probably experiencing the same kind of phantom competitors as they are. So keeping an eye and an ear open for their methods of dealing with phantom competitors is not a bad idea.
3: Get the advice of your suppliers:
This advice is straight from the horse’s mouth. Many retailers and businesses dealing in physical goods have many different suppliers. These are the people whose job it is to make the product. So they are generally a good place to go for information on the positive and negative attributes of those products. For example if Best Buy wanted to know how IPads help consumers fulfill some need, then going to Apple for that information is the logical route.
4: Always be innovating:
While looking to other companies in the industry can be helpful, you do not want to get stuck in the habit of imitating others. The easiest way to deal with phantom competitors is to eliminate them by evolving your good or service to meet additional needs. For example cell phones began with just being able to send and receive calls. Since then, phones evolved to incorporate a multitude of other devices in order to make customers more likely to buy a cellphone, as opposed to for instance, a calculator, stopwatch, or alarm clock.
5: Can the customer just do nothing?
Businesses should continually ask this question about their products. Many companies falsely believe they have cornered their consumers into choosing one brand or another. However, a customer could still simply not to buy anything in a certain situation. Suppose a customer goes to a hardware store because they want to paint their house. They may decide that none of the brands will work, go home, and put off the project for another summer. Businesses continually need to assess what they can do to motivate customers to actually purchase their products.
For more information on business law and strategy, contact the Goosmann Law Firm online or call (855) 909-4442.