Sales funnels are the most important part of your business. Get an early glimpse into how they can help your business by reading this early draft excerpted from my Sales Funnel Bible book.
It’s a jungle out there. Your target market is wandering in search of a solution to whatever problem or need they have. If you don’t get your target into your sales funnel and then move them through it to the point of sale quickly, your competitors will snatch them away.
Lost marketshare not only makes you weaker (by robbing you of revenue and profit), it makes your competitors stronger. And although a little competition is good for business and keeps you honest, competitors that are too strong can outpace you, innovate faster, and strip the target market bare of all potential customers, leaving your business as a distant memory.
How can you pay attention to your competitors and ensure that you keep up with them so you can have a fighting chance to survive?
Competitive analysis is what smart businesses use to make sure that they aren’t at risk of losing significant marketshare to their competitor.
When I say “competitive analysis” I don’t just mean finding out what your competitor is and charging the same amount. I’ve worked for companies that called the competition pretending to be potential buyers in order to find out what their rates were. In high school, I worked at a gas station and the owner would drive up and down the street to see what other gas stations were charging so he’d know what to charge. I think: If you’re just spying on your competition to see what they are charging, you’re only doing part of the job. It’s not only about price.
And when I say “competitive analysis” I don’t mean corporate espionage. I’m not advocating that you illegally gather proprietary information or go “Dumpster-diving” to find out who your competitor’s customers are.
Smart competitive analysis should try to discover why customers buy from your competitors instead of you. Remember: You’re selling into an environment where your target market is looking for a solution – any solution! – to their problem. And unless they have a very strong reason to buy from you, they are looking at you and at all of your competitors as potential solution-providers.
So competitive analysis should seek to understand the competition so that you can keep more people moving forward in your sales funnel.
The sales funnel is an effective tool to help you do competitive analysis.
If you want to truly understand your competitor and why some of your target market buys from them instead, build your competitors’ sales funnels. Take a piece of paper and create a sales funnel for each of your competitors in the same way you created a sales funnel for yourself earlier in this book.
Identify the target market at the top. Identify the products or services at the bottom. Then, run through your competitor’s sales funnel (as much as you are comfortable doing so – perhaps you don’t want to actually buy from them). Along the way, record what mindsets, messages, activities, and channels they are using. Reverse engineer as many steps as you can. (Chances are, you can build a pretty good sales funnel at least describing their marketing efforts, if not also a lot of their sales efforts).
You will need to do research for this project. I say that because the target market you serve and the mindsets you connect with at each step of your sales funnel will be different than your competitors’ target markets and mindsets. There may be some overlap (there may be a LOT of overlap) but there will definitely be some differences that you should try to dissect.
Once you have created an at-a-glance Sales Funnel Strategy Matrix for each of your main competitors, you will have a very deep understanding of how their businesses operate and how they are similar to you and different from you.
With that information, you can do the following:
- Do a better job of identifying your own target market to potentially reduce the overlap and increase how well you connect with that smaller sub-set of your once larger target market.
- Adjust the mindsets you are reaching to better connect with your refined target market. Specifically, you want to show your newly refined target market why your solution is the best one out there. (The combination of speaking to a smaller group of people with a clearer message can be a powerful way to draw more people into your sales funnel).
- Adjust the messages and activities and channels you are using to better connect with your refined target market.
- Adjust the marketing and sales messages you are using to do a better job of differentiating you from your competitors.
- Adjust your products or services so that they seem very different from your competitors. This might be done with some branding changes or by packaging your products and services together or in how you describe them; it might mean developing new products and services to meet the needs of your newly refined target market.
- You might even get in touch with your competitor and work out a deal to trade names back and forth if someone from their target market lands in your sales funnel. As long as each member of this arrangement plays nice, it works out well. (Note: In my experience, some industries are going to be much more open to this idea than others!)
Schedule time regularly to do competitive analysis on each of your competitors regularly. The first competitive analysis on each competitor will be a lot of work but future analyses will be much easier because they might only be small adjustments when you learn more about them.
This chapter is excerpted from an early draft of my book. Comments and constructive criticisms are welcome. Please be aware that the chapter content and chapter order may change by publication.