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55Chapter 4: Sizing Up Competitors and Staking Out Market Share

ߜ Where does your business rank among your competitors?

Avis knew where it fit in the rental car competitive hierarchy back when
it began advertising that Avis was #2 and trying harder. The company
built a successful strategy and marketing plan around an honest assess-
ment of how it ranked competitively. What about your business?

• Evaluate your sales revenues in comparison to those of your com-
petitors to get a feel for how you rank based on size alone.

• Estimate your market share compared to that of your competitors.
(See the following section for market share calculation advice.)

• Evaluate your top of mind ranking — sometimes called your mind
share. When prospects are asked to name three to five businesses
in your field, does your name consistently pop up as one of their
answers? If so, you can be pretty sure that you rank in the top-tier
competitive level for your business arena. Keep listening and you’ll
gain a great indication of what other dominant businesses your
prospects think you’re up against. And if you don’t hear your busi-
ness name, listen anyway, because once you know which busi-
nesses are in the top-of-mind category, you can begin to analyze
what they’re doing differently to achieve the prominence you seek.

Moving up the competitive ladder

Most businesses misdirect their time and energy by tackling the wrong
competitors. They shoot too high — taking on the biggest names in their
market area rather than the biggest threats to their business. As you
develop your competitive plan of attack, follow these steps:

1. Start by winning market share from the businesses you’re actually
losing customers to today. Do this even if it involves facing the harsh
reality that your customers consider your business among a less presti-
gious group than you wish they did.

2. Make a list of the companies you wish you were running with.
Evaluate why you’re not in that group. Is it because of the physical look
or location of your business? Or might the nature of your clientele mark
you as a lower-level player? Or do your product line and pricing hold
you back from your desire to compete with the biggest names in your
business arena?

3. Consider whether changing competitive levels would be advanta-
geous. Assess whether your business is more apt to be successful at its
current competitive level (think of the big-fish-in-a-small-pond concept)
or at the next competitive level (where perhaps you can compete for
bigger and more lucrative business).