Every established small business thinks they know who their competitors are – until you ask them to tell you! At this point they’ll decide that they have maybe two main competitors and the rest are the also-rans. This is rarely true. If they looked carefully enough they’d see that they probably have at least three or four times this amount of main competitors. Many businesses underestimate their competition because they generally only look at the market when they start up and in the early stages.
Once they’re fairly well established they stop looking and stop seriously researching anyone, comfortable in the knowledge that they’ve cornered the market. But no one can afford to stop looking at new competition and seeing how the old competition has changed. A business starting today could be taking your market share in three months’ time and an old competitor could have revamped their entire brand while you weren’t looking.
What do you need to look out for?
It’s important to keep up to date on what your competition is selling. If they’re a service business, have they changed their offering, have they created a new combined service, gone into partnership with a related company to diversify their offering or created a new innovation? If you’re a retail business, have your competitors slashed prices, sourced new types of product, rebranded, changed ownership or started to market themselves in a different way? All these things are important and will have an impact on how you run your own business.
How does knowing your competition help you?
When your competitors change an aspect of the way they do business it means they think there is a change in the market or a change in customer behaviour. No established business makes a change without analysing their profits and looking at the trends within their own business. You can bet that if they’re making a change – especially if it’s a big one – then they’ve done their research first.
If your competition is changing then it gives you a free insight into what’s happening with their customers, your customers and within the industry as a whole. The changes they make are also important because they can show you different ways of doing things – give you new ideas on how to run your own business.
10 Tips on How to Research Your Competition
1. Go beyond a google search. There’s no doubt that any research project these days should begin with a simple Google search or visiting your competitor’s web page. But there are also a variety of tools either supplied by Google or that relate to Google’s search results and AdWords campaigns that might give you interesting insights into your competition. Have a look at Google Trends and Google Alerts.
2. Do some reporting. There are great and inexpensive resources for checking up on your competitors online and offline. I recommend routinely tracking what the industry analyst firms like Gartner are reporting about your industry, as well as trade associations and advocacy groups. These organizations are doing research and studies that evaluate the people who are and should be your competitors. What are they telling you about where the industry is trending? Where are the unmet market needs that you can fill?”
3. Tap the social network. Of course, given how companies are increasingly using social networking sites like Facebook, LinkedIn, and Twitter as marketing outlets these days, you might be able to pick up interesting facts about your competition—and maybe even your own company—just by tuning in. Monitoring tweets, Facebook posts, blogs, and other new media mentions of your competition is an easy, cost-effective way to stay in tune with and in the know about the public’s sentiment about our competitors. Even if your competition isn’t social media savvy, it’s a good bet that they produce newsletters—either e-mail or print varieties—that you can sign up for to get the latest and greatest news and updates on things like new products or services they are introducing and what events they might be attending.
4. Ask your customers. When it comes to identifying sources of information about your competition, don’t skip over the obvious ones—like your customers. Speaking to customers is one of the best (and cheapest) ways of gathering real information on competitors. Whenever you win a new customer, find out who they used before, and why they switched to you (i.e. The reason they were dissatisfied with their previous supplier). Do the same when you lose a customer—identify what they preferred about your competitor. If you gather enough of these stories you’ll get a very clear idea on what competitors are offering that customers view as preferable. You can then adjust your own offering to beat that of the competitor.
5. Attend a conference. Attending industry trade shows and conferences—as well as joining industry associations—can be a great way to learn about who your competitors are and what they’re offering. Attend these shows and make sure to visit competitors’ stands while we are there and observe their interactions with customers, pick up literature, and check out the quality of their products.
6. Check in with your suppliers. If you work in an industry where you share the same suppliers as your competitors, it could pay to ask them some simple questions. Talk to your suppliers and spend time getting to know them. While they may not tell you what your competition ordered or their volume, ask better questions. For example, if you ask them how many units of a certain product have been pre-ordered for the next month, you might find out not only what your competition might have ordered, but what other products your supplier might be bringing in as a result.
7. Hire your competition… Another strategy is to hire employees from competing firms—especially sales people—and team up with competitors’ partners. No one knows more about the inside of those organizations than the employees. Find out all that you can about how these companies operate, and more importantly, what’s on the horizon for them? Where are they taking their business? What markets are they venturing into? How are they leveraging innovation to cut costs and advance productivity? Where is the highest level of dissatisfaction with their products or services? No one has more and better intelligence when it comes to sales than disgruntled sales people.
8. …And watch who they’re hiring. You can also learn something by studying the kinds of jobs your competitors are looking to fill. For example, if a company is hiring a programmer, they will include information about exactly what technologies the candidates need to know, which tells you what they use. If they’re hiring for several HR people, they may be preparing to expand overall.
9. Call ’em up! Once you have done enough research to identify who your competitors are, you might want to try an old school tactic to take it from there: Just call them up and ask away. You’d be surprised how often companies will tell you everything you’d like to learn over the phone, especially if the question is phrased in a context that makes sense.
Finally, and most importantly, if you know your competition, you know what choices your customers or clients have elsewhere; if you understand what they offer, you can be ready when customers start to compare the choices on offer and you’ll know how to answer the difficult questions before they’re asked by your clients. You can sell-in your services or products much more successfully if you’re confident you offer the best value and quality. Only with this knowledge can you offer a better, more cost-effective service or product range. Knowledge really is the key to beating your competition!
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