Whether
you’re in a small market or a large market – whether you’re the dominant
company or the challenger – you probably have in mind the company most likely
to be vying for your piece of the market share. So you might be thinking of
specific names. That’s certainly one type of competitor. But there are also
three other types who could be peeling off your potential.
Direct
Competitors
If you were thinking names, your direct competitors were probably the
names that came to mind. A direct competitor is someone who offers the same
products and services to the same market. They earn money from the same thing
you do, from the same type of people. When providing quotes and estimates, who
do you go head-to-head against? Who do you lose out to? Who do you win against?
Indirect
Competitors
Indirect competitors are a variation of direct competitors. They offer
some of the same stuff but have a different goal; they drive revenue
differently. For service contractors in a residential market, the large home
improvement retailers that provide products for do-it-yourselfers could be in
this category. They don’t come up against you directly, but they make it
possible for someone to circumvent you. Their marketing can compete with yours.
Replacement
Competitors
This type
of competitor is harder to pinpoint, but has the same effect: you don’t get the
job. This “loss” happens when customers choose to spend somewhere else the
resources they could have spent on your service/product. They could be thinking
about a bathroom upgrade but decide instead to replace a garage door. Or they
install a fence and opt out of security lighting. In other words, the same
resources they could have committed to you went somewhere else – and so did
their business with your company.
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