Your small business can gain an important competitive advantage in the marketplace by doing competitive analysis to gain insights into how to position your business to draw customers away from your competitors. If you do competitive analysis while you’re developing a business plan for your company, you can benefit immensely by setting your company up to succeed in a competitive marketplace. You can use competitive intelligence obtained to design your staffing, pricing, marketing, and other key elements of your company to emphasize your strengths and exploit your competition’s weaknesses.
Identify your Competition
The first step in getting competitive intelligence is identifying your competition. If your business is local retail store, if you don’t already know your competitors, you can easily find them using resources such as Google Local Guides, Yelp, or a local business directory. If your business extends to selling online, a simple online keyword search can help you identify your main competition. If you want to go a bit further, you can check the auction insights tool at Google AdWords to find out the names of online businesses that are bidding for keywords related to your business.
Investigate Your Competition
Once you’ve identified your competitors, investigate them in terms of how they’ve positioned themselves in the marketplace. If your competition is other local retailers, go to their stores and learn about the aspects of their businesses. Pay attention to how their stores are laid out, how their employees and how they interact with customers, what items they prominently display or feature, their pricing, and what kind of sales offerings they make. Size up their products and do an honest assessment of how their products stack up against your own in terms of price, quality, and appearance. If your competitors are online, visit their websites to get information on the general appearance of their websites, how their sites are laid out, how they display products, and their shipping and return policies. Consider making some actual purchases from your competitors. With online competition, you can learn if they use special packaging. Contact their customer service department and see how well it’s run. Find whether they customarily offer some freebie, discount, or other perk to shoppers who contact customer service.
Investigate Marketing Strategies
Examine your competition’s marketing strategies, both online and real-world. See what brand image they’ve established for themselves and how they go about communicating it in their advertising. Check them out on social media sites to learn what type of content they publish. Imagine that if your competitors only post product advertisements or sale alerts, you might be able to gain a competitive advantage for your business by publishing more informational or entertainment material.
Using Competitive Intelligence
Once you’ve thoroughly researched the competition, you should examine all the information you’ve collected to learn what you can do to stand out from them and successfully attract customers. For example, if your competitive analysis shows that the bulk of your competition is focused solely on offering low prices rather than superior quality, you may want to design and market your products to go in the opposite direction, emphasizing in your marketing the high quality of the items you sell. As another example, if visits to local retail competitors found them to be short-staffed, leaving customers waiting for assistance, you may want to structure your staffing to have more employees on the floor. What you do with your competitive analysis will depend on the nature of your business, your company vision, and the resources you have. The main thing is to identify what you can do better than your competitors are doing and what steps you can take to minimize their strengths.