Whether you are conducting a strategic planning session, developing your marketing plan or creating your brand, knowing your competitors is a key to success. As Sun Tzu said in The Art of War, “If you know the enemy and know yourself, you need not fear the result of a hundred battles.”

But exactly which competitors should you study and compare? You don’t want to dive deeply into every peer group and crunch numbers on your entire market. As with all things involved in strategy you should focus.

In a recent pre-strategic planning session I was conducting with a client one of their board members had a fantastic recommendation. He noted there were some competitors you want to study for growth purposes, some for similarity purposes and some for financial purposes.

Here are four key competitors to compare and analyze:

  • Fastest Growing—In your market who has outrageously fast growth? This could apply to assets, loans, new consumers or other key ratios you study. Speed matters, especially in today’s quickly paced financial services environment. Blink and a competitor can pass you. Do they have some secret sauce they are using? Examine whether or not they are employing different tactics than you. Are they buying business through special rate deals or is their growth more organic in nature?
  • Biggest Growing—In your market who is experiencing the largest growth or had double-digit growth? Note this is different than the fastest. Has anyone had a big jump recently in their numbers? If so, why? With this type of study you may want to exclude those institutions growing through mergers (unless that is a core strategy you are going to use). Perhaps their organic growth is tied to facilities, digital channels, a new brand or a more engaged staff.
  • Most Like You—Not everyone in your market looks like you. So stop comparing yourself to everyone. Instead, study those financial institutions that are most similar to how you look. This could include similar size, similar field of membership (if you are a credit union) or similar niches. With this type of analysis you are not just examining growth (because these competitors may not be growing). Rather you are studying their numbers for trends. You analyze their performance with yours since they are most like you.
  • Most Profitable—Who in your area isn’t just growing but is making money? All the trends and comparisons in the world don’t matter at all if you are not profitable. In other words, growth for the sake of growth really isn’t strategic. With this comparison it’s especially important to understand the why. Are they increasing non-interest revenue, offering new products, reducing expenses, eliminating branches or employing some other tactic to hit those numbers?

Numbers matter. And so does your competition. And a healthy study of both is just right the mix when it comes to your strategic approach.