Gain an Edge By Regularly Conducting a Competitor Analysis

Even if your work is superior to a competitor’s, consumers will view you as equals if you don’t put effort into differentiating yourself with your branding. Be sure you’re putting some time into studying the competition, so that you know where you can stand out.

Gain an Edge By Regularly Conducting a Competitor Analysis

Anthony Pacilla

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All plumbers should consider doing an annual report on their competitors. Completing a competitor analysis report will reveal possible course corrections for your marketing strategy. 

Rivalry Drives Price

If you were the only plumbing company in a 100-mile radius, you could get away with charging top dollar (on the high end of what your market could bear) and have exponential growth. You would have so much purchasing power from suppliers that you could demand lower pricing, in-stock minimums, and manufacturers be held accountable for failing products. You would get it because you would be the sole buyer.

But competition changes all of that. When there are a hundred companies like yours, you have no real buying power, you have limited demands, and your pricing is limited to the lower end of what your market can bear because of your direct competition. Many times business owners join associations and better practice groups because they are running totally blind on what it is exactly that their competition is doing both in their market and around the world. It’s great to join these organizations to see how things are done around the world, but you should also be doing your own competition analysis on an annual basis just like regular corporations do.

Competitor Analysis

The first step in a competitor analysis is to determine who your “close” competition is. These would be the companies that are very similar to yours, offering a similar array of products and services as well as the resources available to them and the suppliers they buy from. If you appear to your market to be equal to them, then a customer will initiate a call based off perceived price alone. This is called market commonality. 

Market commonality can be disastrous to a plumbing firm that is more expensive, with little or no branding. In essence, you have higher overhead, higher operational costs, and higher wages/levels of technical experience, but the perception of the consumer is that you are equal to your substandard competition. If you have less than or equal branding and community impressions compared to your competition, then you are acquiring calls by luck and response time alone, which should not be your strategy.

Start doing research on what your close competitors are doing and make a spreadsheet, even if it is a handwritten one. What do you similarly offer? What do you offer that they don’t and vice versa? Do they offer free camera inspections? Do they offer sewer lining, jetter services, total line replacements, routine maintenance plans, commercial services, 24/7 service, or waive service fees? How much do they charge for water heater replacements? What water heater, furnace, and air conditioning systems do they install? What are their good, better, and best options, and do they let the technician make the sale or do they have dedicated salespeople? Do they use automatic invoices or paper invoices? How and where do they market and advertise? Billboards, television, newspaper, radio, social media, local restaurant mats, trade shows? Do they hire a professional company to do their online SEO and PPC work? You can easily find most of this information out just by browsing or making a few phone calls, and the information is invaluable to building a competition analysis.

The point of the analysis is to find opportunities to increase your perceived value to potential customers.

Think — if you only run ads in the newspaper, rely on word-of-mouth, and have a basic brand, then anyone else who does those things in your market will be perceived by the community as your equal. They naturally assume that you must be the same type and size of company and therefore do mostly the same quality of work for the same price. Your competition possibly even includes hack plumbers who run the same kind of branding work. When people find out you're more expensive, they won’t see the value. 

Differentiate yourself from your competition in the eyes of the public where you can. Get a recognizable brand, a mascot, a logo, and a consistent color scheme, and advertise where you found holes in your analysis. Place advertisements where others aren’t. Compete harder in the markets where you need to. 

It is an uphill battle when you are running a business blind, and it is difficult to run a wide operation on pure instinctive “feel.” Maybe there is an entire untapped market waiting to be your next cash cow. Don’t always assume other businesses aren’t doing things because it doesn’t make good business sense. Maybe you will bust an entire market wide open and make chunks of money.

But you’ll never have information to make a decision on until you gather the data.

About the Author

Anthony Pacilla is a registered master plumber for McVehil Plumbing in Washington, Pennsylvania. He has 23 years' experience in the plumbing and HVAC trades, and has a bachelor’s in business and economics from Thiel College. 



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