No matter the size your business, you should be keeping a close eye on competitors to boost the chances of your continued success. It’s important to understand what’s going on around you to get a complete picture of the current trading climate.
Researching your competitors is an important part of strategic planning. It helps you to understand competitive drivers in your industry and important factors in the business environment. Many businesses aim to understand what their competitors are doing in some detail.
Some think they are too small to worry about competitors, or feel they have so little time, it’s an extra demand they can’t cope with. Yet this simple process can help your business – and dispel the myth that it’s okay to get on with your own plans and ignore everything going on around you.
Keeping an eye on the competition will help you to understand your own advantages and disadvantages in the market as a whole. It will improve your understanding of competitors’ future plans, enabling you to develop your own strategies to give you an advantage in the longer term. It can also help you when it comes to forecasting the reaction to a new pricing strategy or product.
What questions should you be asking?
When trying to find out more about competitors, there are some obvious questions you need to ask. First, identify who your competitors are. Find out if there are any new businesses in your sector that you should be aware of. Determine if they pose any threats to you.
Find out the size of your competitors in terms of the number of employees, how many sites they have and the scale of their portfolio of products or services. Check the websites to discover their objectives, and to better understand the strategies they are pursuing and how successful they have been.
Determine their strengths and weaknesses and how they have responded to new initiatives and innovations in the way they do business.
Where can you find competitor information?
It isn’t too hard to find information on your competitors, as plenty is published online. This includes the company website, social media feeds, blogs, press releases, newspaper and magazine articles, annual reports and accounts, analysts’ reports, speeches and presentations.
Other material needs to be deliberately sought and then pieced together. It can include prices, details of advertising campaigns, tenders, promotions, White Papers and patent applications. You can even do some “mystery shopping” in their brick-and-mortar premises. Either pop in yourself, or if you’re too well-known, send a friend.
There is a third category of information that’s more difficult to get hold of. Getting your hands on it can require a lot of planning and organisation. It can be verbal rather than written and can come from informal discussions with mutual customers, suppliers and maybe previous employees or managers of your competitors.
This type of data can be protected by contractual obligations, so should be approached sensitively. Having contact with suppliers can be a good source, as you may stumble on something interesting purely through luck. Trade shows, conferences, sales meetings and seminars can also be useful.
It can be like a jigsaw puzzle trying to fit each individual piece of data together. The idea is to collect as much information as possible to provide an overall picture.
What do you need to know about competitors?
Look out for anything that helps paint a rounded picture of how the competition is faring. This should include sales figures, profits, market share data, key personnel, promotional budget and activities, marketing channels and customer profiles.
Check customer satisfaction levels on review sites such as Trust Pilot and Google, or on social media by checking comments on company pages. See what the main levels of satisfaction and dissatisfaction are. Compare the kind of reviews you receive and determine whether you should be looking to up your game. Looking for specific customer issues is always a good idea.
Check out new products and advertising strategies: are your competitors ahead of you in the innovation stakes? Are their advertising campaigns more vibrant? It would also be useful to know their future investment plans. If they have issued a press release about investment, this can be easy. However, if it’s an investment that isn’t public knowledge at present, it can be more challenging, unless you have a trusted contact who is involved with a competitor in some way.
While this may seem like a lot of work to keep tabs on your competitors, the key is deciding how much time to invest in obtaining the information. Consider your own resources, such as whether you’re a small business or a single entrepreneur.
Don’t get carried away trying to dig out the nitty-gritty if you’re encroaching on time when you should be developing your own business. If you’re a small business owner or sole trader working in flexible working space, you can divide your time more easily into specific tasks, as and when needed.
For example, if you have a quiet couple of hours in terms of your own business, use the time wisely to check out your competitors. As with everything, knowledge is power, especially when it comes to keeping an eye on the competition. If you want to stay ahead of the game, you can’t really afford to take your eye off the ball!