How Well Do You Know Your Competitors?
You work like crazy to come up with a new product or service, rent a bricks-and-mortar store, design a spiffy website for marketing purposes, and hire talented go-getters to meet customer demand. Yet there are still other businesses waiting to eat your lunch.
As much as you might like to ignore your competitors, the truth is you really can’t run your small business well without a good sense of what they’re up to. The knowledge you’ll gain by doing some research can help you plot strategies for keeping your existing customers and luring a few clients away from the other guys.
To that end, here are six effective ways to learn more about your competition.
1. Do a competitive analysis. This study can be as concise (or as detailed) as you’d like, as long as you answer certain basic questions:
- Who competes for your prospective customers?
- Do their products or services compete directly or are they potential substitutes?
- Do they operate traditional storefronts, or are they strictly web-based?
- What would make customers choose them over you (price, service, reputation, etc.)?
- Do they target the same audience as you do? If not, is their audience worth pursuing?
- Do they have a successful social media strategy?
Your objective here is to understand what makes customers choose one business over another.
2. Check out what your competitors say. Visit your competitors’ websites. Can you quickly determine what they’re all about? How well do they frame their value propositions? What do they say about the features and benefits of their products and/or services? Do their sites seem more successful than yours in enticing prospective customers to learn more?
Another source of information about the competition: their company newsletters. Sign up for their email or print missives, which offer clues about their sales strategies (discount offers, loyalty programs, etc.), service updates, product launches, etc. Keep in mind that wise competitors already subscribe to your newsletter.
3. Conduct a thorough online search. Start with Google, of course. Do a local search for the types of products or services you offer. Focus on the top five or 10 businesses that come up in Google’s search results, along with related results — blogs, videos, and online advertisements. You want to know the extent of each competitor’s online presence (see #4).
Once you’ve identified your biggest competitors, you can keep track of their activities through tools such as Google Trends and Google Alerts. That way, you’ll know when a competitor pops up in the news.
4. Read online reviews and social media commentary. Customers frequently share their experiences on sites like Yelp and Citysearch. Consumer reviews can be enormously revealing about competitors’ strengths and weaknesses — and can alert you to areas of service you might be overlooking.
Meanwhile, investigate competitors’ social media presence: Twitter feeds, Facebook postings, Google+ pages, YouTube offerings, and so on. What kind of content are they putting out there? How many followers do they have and what are they doing to draw more? Do they demonstrate a clearly aggressive social media strategy or is it not a priority?
5. Attend trade shows and conferences. Is active participation at trade shows or professional conferences may be a key component of your competitors’ marketing plans? If so, visit their booths, pick up copies of their handouts, and study them. See what you can learn by engaging their representatives in chats about the business, too.
6. Talk with your customers. Who better to give you insightful intel about your competitors — not to mention your own operation — than your customers? Your clients can tell you why they prefer you over the other guys and why they sometimes take their business elsewhere. Talk to enough people and you’ll get a clear idea of how your business stacks up against the competition.