The adage ‘Keep your friends close, and your enemies closer,’ could very well have been written for business. A thorough understanding of your competition is crucial for the success of your marketing plan, and therefore of your business.
Your competitors have a lot to teach you: understand their market profile, promotional strategies, pricing, and customer management, to understand your own strategies better. It doesn’t matter if you are a start-up or an established small business; you need to keep an eye on your competitors on a regular basis. Track and maintain this competitive intelligence on old and new competitors in a systematic way. Some starting areas:
Get your foundation right Using your small business software, build a database of information about your competitors. Ask yourself the following questions:
Who: List your top five competitors, both direct and indirect. Research the size of the business, experience, estimated revenue, possible new product introductions, etc.
How: Are your competitors doing well? How well? Are they growing, expanding, maintaining or facing loss? What are the possible causes of the growth or decline?
What: How do your competitors price their products or services? What is their production/operations process like? What is their marketing and advertising strategy like? Do they have a website?
Where: List the similarities or differences between your product or service and that of your competitors. Are they doing something you can learn from? Can you use your small business software to leverage this information?
Build on it: Now that you have the basic information about your competitors, what’s next? Find out more about your competitors to discover how you can improve your business.
Connect to customer: Customers are a great resource for keeping tabs on what competitors are doing. The same rule applies to your staff. Sending out a newsletter or feedback form? Put in a short survey that also includes questions about your competitors or their products/services.
Check the office grapevine: Ask peers about your competitors. Talk to consultants such as accountants or lawyers who work with similar businesses as yours about your competitors, their plans, new products, etc.
Log on to the internet: Most businesses have a Web presence these days, so there’s no place like the Internet to begin your ‘digging’. Begin by visiting websites, reading up on press releases, new product information, pricing data, financial reports, and customer testimonials. Industry chat groups or online business communities are also a good source of information.
Make a personal visit: Why not visit your competitor’s store or business? Can you learn something from their display or customer service? How do customers react to their products? You can also visit your competitor’s booths at industry fairs or trade shows. What are they offering and who are they trying to sell it to? What kind of sales pitch do they use?
Stay informed: If you want to keep tabs on others, read up on trade publications and industry newsletters. Stay ahead of your competition by understanding new trends. Pay attention to surveys that reveal what customers may be thinking. For further reading try interacting with members of your local business development centre or industry association.
Watch the ads: Advertisements can tell you a lot about your competition, their products, prices, customer base, market standing, and marketing plan. Watch out for ads in newspapers, magazines,and other media.
Get on their database: Sign up to receive newsletter or email alerts from your competition. This way you’ll be able to keep tab on new sales, products, strategies, etc.
Seal it with the right intention: Although it may seem like it, collecting competitive intelligence is neither complicated nor expensive. Whether you’ve just launched your businesses or are at a critical growth point, make your competition your best teacher.