There are many areas in which your competition probably excels. Are you dismissive of great features you should ultimately be rolling into your own brand?

Appreciating and analyzing your competition is like looking into a mirror. We can all find blemishes in a heartbeat… But can you see the redeeming qualities?

Working with a number of brands in highly competitive markets like consumer, coffee, or hospitality, I’ve always noticed there are teams that poke fun at competition on a regular basis. I’ve even worked with some leadership teams that poke fun at competitors that are much larger and more successful than they are… strange…

Maybe they feel like they have to, or maybe they’re just insecure. Either way, there is a mentality of “Oh, they don’t do things correctly.” or “Oh, their products aren’t high quality.”

If the competitors you downplay are double or triple your size, you probably have something to learn… they’ve probably figured out something you haven’t.

A few years ago, I was working with a brand that went to a number of large trade shows throughout the year. At one particular show, I was walking the floor with them and I kept hearing “Look at ‘x’ brand, they won’t be here next year” or “their branding is terrible” as they pointed to random competitor tables here and there. This was a multi-day trade show, and the whole time, instead of focusing on courting buyers walking up to their own table or taking notes on why buyers were attracted to their competitor’s table, they just kept talking about other brands’ negatives.

What these folks didn’t acknowledge was that the competitor brands they were making fun of might have had less-than-optimal branding, but their customer service and customer loyalty were off the charts (they had a crazy loyal following), something the brand I was there to support did not have. This was a key differentiator for the buyers that were walking up to their competition.

Logos and color schemes can be fixed quickly.

Large, loyal customer bases take years to build.

Buyers at trade shows want the latter, and they can tell you how to fix the former. They want to sell shelf space to products that turn. They are not looking for products to sit there and collect dust. Nor do they really care about dissecting ingredient labels (they’re sales reps, after all, not food scientists). Loyal customers move products. Fun and edgy art and layout might help, but ultimately do not on their own. Distributors will drop your brand if they can’t turn inventory.

Unfortunately, the brand I was there to support went out of business two years later. They made no inroads with buyers from trade shows, nor did they focus on building a strong base of repeat customers. For some reason, they thought that they were immune from the struggles competition had. They thought they were successful just because of some cool branding and product quality.

Don’t get me wrong—supply chain strength, quality of ingredients, and cohesive branding are all very important. But they’re not the only things that will make you successful. In this business’s case, they did not appreciate the primary reason for their competitor’s success. They found a lot of blemishes but ignored the features that made them popular in the marketplace.

If you are directing portfolio company operations or leading a PE/VC fund: encouraging self-awareness and honesty within your portco management teams is key.

The leaders within each of your portcos must understand that the answer to your portco’s growth or profitability issues might have already been solved by your competition.

If you are planning an acquisition and during diligence notice that the target’s management team has good instincts, has created a lasting brand and customer base, but is lacking formality and institutionalization of key processes, you might have just found a big risk area for scalability.

What happens if those key founders or leaders leave post-deal? Do internal processes for maintaining customer loyalty stick without them?

The next time you are doing an analysis of a competitor that’s slightly bigger or just a little bit more successful than you, try to figure out whether they’ve unlocked the “institutionalization of core processes.” They might have mastered the “rinse, wash, and repeat” methodology. Their whole team is bought in. They might be able to maintain quality, customer service, branding, and operational efficiency with each new growth milestone they achieve.

Maybe you can’t yet.

So before you decide to go on a roast-the-competition spree, pause and take notice of their redeeming qualities — you might learn something.