By Denis Jakuc
There are tons of benefits to knowing who your competitors are—what they’re offering, their strengths and weaknesses. That knowledge can help you make your products and services stand out, keep your prices competitive, and respond to competitive marketing programs with better offerings. In addition, you’ll be able to take advantage of competitors’ weaknesses to grow your business. Watching for competition also lets you pick up on threats from new entrants in the market. Finally, studying your competitors helps you realistically assess the success level you can ultimately achieve. Here’s how to determine who your competitors are, how to find out what they’re doing, and what to do with the information you get.
Who are your competitors?
All businesses have competition. Even if you’re the only business of its kind in your area, you’re still competing with all the businesses where customers could spend their money instead of with you. Restaurants, for example, are actually in competition with movie theaters and bars. Plus, thanks to the internet, many businesses have competitors outside their immediate area—possibly from all over the world. In addition, competition need not be another business. It could be a new product or service being developed that you should sell or license before your competitor does. You can find competitors from:
- Your Chamber of Commerce
- Local business directories
- Advertising and articles
- Trade or professional associations
- Business conferences and trade shows
- Internet searches
- Customer questionnaires
- Competitors’ marketing materials
- Looking up patented products similar to yours at us.pto/gov
- Checking town records for new commercial building permits
What are your competitors doing?
You want to learn as much as possible about competitors’ products and services and how they market them. Scope out their prices and delivery systems. See if they have programs to promote customer loyalty, and what kind of customer service and support they offer. Check out their brand design. Determine how innovative they are—in their business methods, as well as with their products and services.
Look into the size and quality of their staff. Scope out their digital presence—website, email programs, apps, social media—as well as their traditional media exposure—newspapers, radio, television, outdoor advertising. Find out about the owners. If they’re a public company, check out their annual report. If they’re an online business, check for a free trial. See if they’re getting publicity from sponsorships or networking. If they attend trade shows, check out their booth, promotions, and traffic.
Compare their websites to yours. Do the interactive parts work well? Is the information easy to find? Check the About page for company history and staff biographies. Look at sites offering similar products and services no matter where they’re located. Even if your business is locally-based, you can get valuable ideas from other sites.
Look into their customers. Who are they? Do different customers buy different products or services? What do their customers see as the competitor’s strengths and weaknesses. Do they have long-standing customers? Have they had a surge of new customers? Try to figure out their plans—the customers they’re targeting, new products and services they’re developing, their business strategy, their financial resources.
Ask a friend to shop your competitors. Get a price list, volume discount information, literature. Meet your competitors at social and business events. Be friendly—remember, they’re not enemies, they’re competitors. This will give you a better idea of who they are, plus you may need to partner with them someday. Ask customers and suppliers how they think you stack up against the competition. Just be wary of comments about price—customers may be looking for a better deal, suppliers may be trying to upsell you!
What should you do with this information?
There are three areas to look at. First, use what you’ve learned to improve what you’re doing. This covers all areas of your business—products, services, pricing, marketing, customer support, hiring, distribution, planning. Don’t just copy what your competitors are doing. Use what you’ve learned to innovate, bettering your competitors’ offerings and adding value.
Next, take the things they’re doing that are not as good as what you do and look at ways to exploit the gaps. Don’t be complacent about areas where you’re ahead. Improve what you’re offering in every way you can. Finally, look at the things they’re doing that are the same as you, and decide if these are areas where you could make a leap ahead. See if there are gaps in the market your competitors aren’t addressing—or areas that have become too crowded with competitors. Ultimately, the more you know about your competition, the better you can position yourself against them to prospects and customers.