What do you REALLY know about your competition?

By Gregg Schoppman, FMI

“Those no-good, filthy animals down the street.” And that is what is said when they are NOT bidding against you and your firm. Early on, there is a cellular response to the competition and it probably starts as a twitch when their logo is seen for the first time.  Their colors evoke hatred and in some cases nausea. For every hero, there is a villain.  However, it isn’t like they have superpowers and in fact, the most we even know about our competition is in their name and those colors.  

Consider some of the great rivalries in business – McDonalds vs. Burger King, Coke vs. Pepsi, Nike vs. Reebok. While most of the public sees these conflicts from the sidelines, there are countless business strategists and tacticians working feverishly behind the scenes to find the secret sauce. For such an integral aspect of the construction world, it is not as common to have deep knowledge on the competition.  

First, this is not about corporate espionage but rather knowledge or what makes your competition tick.  Put another way, what makes them fundamentally different than you?  For instance, can you answer these questions with a realistic and fact based response:

• What does your main competition get invited to bid against you?
• Why do they get selected by the same customers as you?
• Why do people choose to work for them, instead of us?
• What have they got that we don’t?

The operative words are “realistic and fact-based”.  It is easy to say “There is NO WAY, they can do it for that cost…”  Yet project after project, they are still around and, in many cases, thriving.  Look, there are plenty of businesses making less than stellar business decisions but it is also misguided to discount everything as “stupidity.”   Put another way, there are some businesses that are just better than you and you have to find what that secret ingredient is.

Reconnaissance

“I thought you said this wasn’t about espionage!”  Reconnaissance does not have to be cloak and dagger spy games.  One of the first recon points is simply asking your customers what they think.  In the court of public opinion, you might go to the main courthouse for the answer.  However, you might not always like the answer you get.  

First, the question should be handled with grace and not have the air of a petulant five-year-old asking “Why do they get to play all of the time?!?”  Rather, it would be important to ask such questions as this:

• What are the most important things our competition does that we should integrate in our work stream?
• What is your greatest frustration with us? What could we improve upon?
• What types of projects do you associate with our firm?
• Short of price, what are the most important things a contractor can do for your business?

There are plenty of end-users and decision makers that don’t want it to appear as if price is the most important thing to them.  And while many businesses do have fiscal responsibilities there are probably other things that are important but they struggle to articulate those items to you. For instance, their perception may be that every contractor is simply mediocre, thus making “low price” the ultimate equalizer. Additionally, your firm may have a perception of what that customer holds in high value but have you ever really asked them?  In the end, you might be so singularly focused on price that other drivers like schedule and safety might be triggers the competition is picking up on. However, they are not hitting on the price segment, because they aren’t asking those questions.  

Reconnaissance can also be characterized as observing jobsites (from a distance, of course). For instance, consider a large site project. While no one should trespass, it is easy to drive by and make the following observations:

• Methods and Means – So, THAT’S how they bid it! Think about three estimators in your own firm – would they bid something identical? Exactly, when you see a project getting built you start to realize that the “cheap seats” provide interesting insight on other ways of doing things.
• Subcontractors – It doesn’t take James Bond to see what subcontractors and suppliers a project is utilizing. That same drive-by can provide insight on who is being used. There may be new construction partners that you were not aware of.

Subcontractors are also an interesting source of information. Once again, this should not look like the Spanish Inquisition, done in the confines of a small room with a single light bulb and uncomfortable desk chairs.  First it is important to respect that these trade partners work across the spectrum of the competition and it is misguided to think they would tell you confidential information that could be used against them later. However, much like the question to the customer, asking “What could we do better to help you perform? Does Brand X do something in the execution of their work that we could add to help you?”  

Lastly, there is no shortage of public information that can be gleaned from a distance, whether it is social media, press releases, or even their website.  Undoubtedly, all of these will provide an overtly positive perspective, but it does provide insight into what other potential customers or job candidates might see.   

The competitive landscape is as dynamic as ever and it morphs more frequently than we think.  Just when we learn those secret ingredients, a good competitor develops a new recipe.  Additionally, it can become consuming to worry too much about “keeping up with the Joneses.” In the end, a firm will not be successful by simply learning what makes their competition great or trying to assign those elements of that competitor’s strategy into their own.  Knowing how the competition operates is simply one quarter of the contextual element along with the company’s own machinations, the customer’s needs and desires and the climatic or environmental themes in play. This knowledge may not be the Colonel’s secret recipe but it does provide insight on why those “animals” do what they do.

About the Author

As a principal with FMI, Gregg specializes in the areas of productivity and project management. He also leads FMI’s project management consulting practice. He has completed complex and sophisticated construction projects in the several different niches
and geographic markets. He has also worked as a construction manager and managed direct labor. FMI is a unique and fast-growing firm of professionals passionate about creating a better future for engineering and construction, infrastructure and the built environment throughout North America and around the world. For more information on FMI, please visit www.fmicorp.com or contact Schoppman by email at gschoppman@fmicorp.com.