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Learn from Your Competitors: Secrets from a Successful Company President

A successful company president explains how a small business can use its competitors to learn more about its market and better serve customers.

Three years ago, TriniTech was little more than an idea in Max Martin's head. Aided by one assistant, Max began selling a computer diagnostic tool that he developed from a tiny office in Clearwater, Florida.

Today the company is an emerging leader in the niche market for computer diagnostic products. Its flagship item--the OmniPost Analyzer--won recent praise from PC Magazine for its ability to help technicians figure out what's wrong with about 95 percent of the personal computers available on the market. IBM and Hewlett-Packard are among the company's customers. And it generated an impressive $360,000 in revenues last year.

Max agreed to speak with us about how he achieved his phenomenal growth and about how, oddly enough, his competitors helped make TriniTech what it is today.

Your principal advice to Toolkit readers is, never fear competition. Can you explain?

I'm convinced that if you're afraid of your competition, you might just as well be out of business. To survive you must recognize what competition can do for you, your company and your workforce.

And that is. . .

Motivate you to be better. Look at the Olympics. The guy who takes the gold in pole vaulting doesn't say to himself, "18 feet, 3 inches would be a good vault for me." He says, "only an inch higher than everybody else will do." When all the other pole vaulters push themselves, they push him too. The only reason he jumps 18 feet, 3 inches is because somebody else jumped 18-2.

It's exactly the same in business. Of course, the key is making sure you go a little bit higher, farther or longer than your competitors. Do that often enough and eventually you'll have no competitors.

You don't honestly expect to drive everyone else out of the market, do you?

That's a bit ambitious. But I always say that I have no "competitors," just people who sell some of the same products that I do. I figure, as long as I offer customers a tool that does everything that the other guy's product does and something more, I'm his competitor, but he's not really a competitor to me.

Take my best-selling kit for example. You'd have to buy at least three separate products from anyone else to do everything that it does. Plus I package my stuff in a genuine leather case that makes a technician look professional when he or she carries it. At trade shows, I tell prospects exactly where they can find the other booths that are selling stuff that's similar to mine. I say, please go visit those booths and see if you can get this three-in-one feature, the nice case, everything else at a price like this. It's funny. I've had people from those booths complain to me about the "employees" I've sent to lure customers away from them.

You ask customers to visit competitors before they buy?

Sure. The way I see it, one of two things can happen. Usually the customer comes back saying that my product is the best thing on the market for the money. If the customer happens to buy someone else's stuff, I still don't necessarily lose. Customers are extremely educated and value-conscious these days. If the customer had bought from me and were to find out that something else could do a particular diagnostic test better, or was cheaper, I'd probably have to deal with a returned product anyway.

On the other hand, if I've helped a customer find something they like better than my stuff, they'll often pay me the courtesy of telling me why they went elsewhere. So, even if we lose an occasional sale, at least we increase our chances of learning something we can use to improve TriniTech's products. It doesn't happen too often. Besides, I owe it to my competitors. They've done a lot for me and my company.

Such as. . .

For one thing, they taught me where to advertise. When I was first starting out, I did something foolish. I spent about $2,000--a fortune to me--on an ad in a computer magazine that I thought would bring me lots of sales. My competitors didn't advertise there so I thought I was getting a leg up on them. All I got was $2,000 poorer. So I started watching and learning from my competitors instead.

Now I look to see where the big players place their ads. They have huge advertising budgets and they can float lots of trial balloons trying to find something that works. I can't. But if a competitor's ads are still running in a publication after six to eight months, I give it a shot. I subscribe to about 50 trade publications like this one. (He pulls a computer circular from his briefcase and points to a competitor's ad.)

The strategy works remarkably. Of course, you still have to go that one inch better. . .(Grinning, he points to his own full page ad on the back of the circular. "A lot of people open these things up from the back and work forwards," he says.)

You mentioned the big players' budgets. Don't you ever feel intimidated by powerful competitors?

Here's a trick I picked up from a business seminar to use whenever you're feeling outgunned: Remind yourself that you have all the departments, and employees, at your disposal that the big players have--you're just smart enough to "outsource" for their services. I used to work up my own help manuals on a word processor and bring them to Office Depot to get them copied and bound. Even then I told myself, "the person running this copier works for me. If people like me didn't bring in jobs like this, the copy person would have no job. They depend on me." Thus, in my eyes the company always had a printing operation--it was just outsourced.

You said earlier that you can use competition to help motivate your workforce. Now that TriniTech has a full-time workforce, do you have any thoughts to share on how to do this?

Our "full-time workforce" is probably smaller than you think. I have anywhere from 15 to 20 telemarketers each month selling TriniTech's products on the phone. They're not employees, however; they are independent sales contractors.

Using independent contractors is useful in many ways. I don't have to pay payroll taxes or mess with much of the paperwork associated with having genuine employees. The problem is that the IRS, and other government agencies, have strict rules about how you treat these people. You can't deal with them as you would employees.

I don't tell independent contractors that they must be in at a certain time. I don't tell them when they can leave. I don't require, or necessarily even expect, them to show up at the office everyday. It's their choice. It has to be to keep things legal.

What I can do, however, is use competition to motivate them to sell my stuff. In the front of our phone sales room we've placed a huge board. On the board we list each independent contractor's name and their sales volume for the week. Sometimes we also write a little reminder about the percentage or "cut" sales persons receive on that volume. When people are reminded that other people are making sales--and that they're being paid handsomely for it--miraculous things can happen. And we all see a little more "gold" then.

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