Big businesses place a high priority on collecting information about their competitors. They recognize that knowledge about the competition — their target audiences, products and services, employee make-up, and more — directly impacts their own financial well-being. Large companies understand that what they don’t know can hurt them.
The same principle applies to small businesses. Without up-to-date competitive information, you run the risk of losing market share or being blindsided by an upstart company’s dramatic upgrade of the same type of product or service you offer your customers.
“One of the biggest mistakes a small business makes is not having an active competitive analysis program in place,” says business consultant Jeff Still. “The business owner and leaders get caught up in the internal day-to-day happenings and take their eye off the competition. By the time they realize their market space is changing or has changed, it’s too late.”
The good news is there are plenty of ways to address the issue. Here are five steps every small business can take to get a clear picture of what their competitors are up to.
1. Start with Social Media
Your competition is cultivating an active presence on social media sites like Twitter, Facebook, LinkedIn, and others. Just as you are, these businesses are making a concerted effort to attract followers, convert them into paying customers, and build awareness of their brand. You are wise to keep track of what competitors are doing on these platforms.
In addition, you should subscribe to and monitor your competitors’ blog(s). This way you’ll learn about new hires, forthcoming product upgrades, happy customers, and so on. A small business blog is also a great way to understand the culture of your competition — and how adopting its more successful components can make your own business stronger.
If people are talking about your competition on Twitter — and it’s likely they are — you should be aware of what’s going on. With tools like TweetDeck and Hootsuite, you can track specific comments, good and bad, to find out if they’re generating buzz and attracting more followers.
And don’t neglect the intelligence-gathering potential of sites like Pinterest, Facebook, and Flickr, where competitors share images of their business.
“You wouldn’t believe how much you can learn from really looking at these pictures,” says Derek Johnson, founder and CEO of Tatango. “I’ve figured out how many employees our competitors have, what they are planning for the future, what computers they are using, even what their culture is like within their office.”
2. Track your competitors’ workforce
You can use LinkedIn as a professional networking tool and to gain a thorough understanding of a competitor’s workforce, including:
- Number of employees (indicating the business’s relative prosperity)
- Tenure of those employees (suggesting its success or failure at hiring and retention)
- Professional background of the business owner and his or her employees (average age, experience and education)
This information can prove useful for tweaking your own recruitment and retention efforts.
3. Monitor the competition’s media presence
Numerous online resources enable businesses to monitor how often competitors are named on social media and in press releases and other news stories. Structured similarly to Google Alerts, Talkwalker Alerts allows users to keep track of their competitors, as well as mentions of their own name and brand. With the social media search engine Social Mention, you can track content posted to blogs, news stories, and even videos. And for more advanced PR searches, sites like Meltwater News provide industry-level media monitoring for information on your competitors.
“News stories may give a sense of a company’s strength — if a new product has a lot of buzz, if it has the ability to rapidly transform itself in response to market feedback,” says Michael Fertik, founder of Reputation.com. “Listening to the spokesperson gives you insight into how they’re positioning. What are the talking points they use? What seems to be the primary focus?”
4. Try their products for yourself
Simply taking your competitor’s product out for a test run can tell you a lot about what it offers that yours may not, and about the company’s commitment to quality (or lack thereof). What you learn may influence your strategies for introducing a new feature or upgrade of your own or for positioning your product’s strengths against their’s.
5. Talk to your customers
Who better to consult than the people who choose between your offerings and those of your competitors? Talking to your customers is an effective and inexpensive way to collect competitive intelligence. Ask them why they selected your business over the other guys. Or — if they purchased from you once and didn’t come back — try to find out what the competition did to lure them away.
“Figure out why your competition is receiving the press they are,” says Tatango’s Johnson, “why their customers are reacting the way they are, and most importantly, what you can do differently to get a leg up on your competition.”