Do you know how to learn about your business competitors?

 business competition tips and pitfalls

Before looking at new markets, think about how you can get the most out of your existing customer base - it's usually more economical and quicker than finding new customers.

Consider whether you can sell more to your existing customers or look at ways of improving the retention of key customers.

Focus on the market

  • • Analyze the different needs of different groups of customers.
  • • Focus on a market niche where you can be the best.
  • • Aim to put most of your efforts into the 20 per cent of customers who provide 80 per cent of profits.

Don't forget the follow-up

  • • Approach a third party for feedback about your strategy - they may be able to spot any gaps or weaknesses that you can't see.
  • • Put your marketing strategy into effect with a marketing plan that sets
  • out  the  aims,  actions,  dates,  costs,  resources,  and  effective  selling programs.
  • • Measure the effectiveness of what you do. Be prepared to change things
  • that aren't working.

Pitfalls to avoid

  • • Making assumptions about what customers want.
  • • Ignoring the competition.
  • • Trying to compete on price alone.
  • • Relying on too few customers.
  • • Trying to grow too quickly.
  • • Becoming complacent about what you offer and failing to innovate.

Who is your competition?
All businesses face competition. Even if you're the only restaurant in town you must  compete  with cinemas,  bars  and  other  businesses  where  your customers could spend their money instead of with you. With more and more goods, services and leisure options being bought or researched on the Internet, you are no longer just competing with local businesses. In fact, you could find that you are competing with businesses from other countries.

Or your competitor could be a new business offering a substitute or similar product that makes your own redundant. Competition is not just another business that might take money away from you. It can be another product or service that's being developed and which you ought to be selling or looking to license before somebody else takes it up.

And don't just research what's already out there. You also need to be constantly on the lookout for possible new competition.

You can get clues to the existence of competitors from:

  • • Local business directories.
  • • Your local Chamber of Commerce.
  • • Advertising.
  • • Press reports.
  • • Exhibitions and trade fairs.
  • • Questionnaires.
  • • Searching on the Internet for similar products or services.
  • • Information provided by customers.
  • • Flyers  and  marketing  literature  that  have  been  sent  to  you  -  quite Common if you're on a bought-in marketing list.
  • • Searching for existing patented products that are similar to yours.
  • • Planning applications and building work in progress.

What you need to know about your competitors

Look at the way your competitors do business:

  1. The products or services they provide and their marketing methods.
  2. The prices they charge under all situations.
  3. How and where they distribute and deliver.
  4. The devices they employ to enhance customer loyalty and what back up service they offer.
  5. Their brand and design values.
  6. Whether they innovate - business methods as well as products.
  7. Their staff numbers and the caliber of staff that they attract.
  8. How they use IT - for example, if they're technology-aware and offer a website and email.
  9. Who owns the business and what sort of person they are.
  10. Their accounts at Companies House if they're a limited company.
  11. Their annual report - if they're a public company.
  12. Their media activities - check their website as well as local newspapers, radio, television and any outdoor advertising.

How they treat their customers

Find out as much as possible about your competitors' customers, such as:

  • • Who they are.
  • • What products or services they buy.
  • • What customers see as your competitors' strengths and weaknesses?
  • • Whether there are any long-standing customers.
  • • If they've had an influx of customers recently.

What they're planning to do

Try to go beyond what's happening now by investigating your competitors' business strategy, for example:
  • •What types of customer they're targeting.
  • • What new products they're developing.
  • • What financial resources they have.

Learning about your competitors
Try to find out as much as you can about your competitors. Look for articles or adverts in the trade press or mainstream publications. Read their marketing  literature.  Check  their  entries  in directories and  phone books. If they are an online business, ask for a trial of their service.

Are they getting more publicity than you, perhaps through networking or sponsoring events?

At exhibitions  and  trade  fairs  check  which  of  your  competitors  are  also exhibiting. Look at their stands and promotional activities. Note how busy they are and who visits them.

Go online
Look at competitors' websites. Find out how they compare to yours. Check any interactive parts of the site to see if you could improve on it for your own website. Is the information free of charge? Is it easy to find?

Business websites often give much information that businesses haven't traditionally revealed - from the history of the company to biographies of the staff.

Use a search engine to track down similar products. Find out who else offers them and how they go about it. Websites can give you good tips on what businesses around the globe are doing in your industry sector.

Getting to know your competitors
Speak to your competitors. Phone them to ask for a copy of their brochure
or get one of your staff or a friend to pick up their marketing literature.

You could ask for a price list or enquire what an off-the-shelf item might cost and if there's a discount for volume. This will give you an idea at which point a competitor will discount and at what volume.

Phone and face-to-face contacts will also give you an idea of the style of the company, the quality of their literature and the initial impressions they make on customers.

It's also likely you'll meet competitors at social and business events. Talk to them. Be friendly - they're competitors not enemies. You'll probably share common problems. You'll get a better idea of them - and you might need each other one day, for example in collaborating to grow a new market for a new product.

Listen to your customers and suppliers
Make the most of contacts with your customers. Ask which of your competitors they buy from and how you compare. Use your judgment with any information they volunteer. For instance, when customers say your prices are higher than the competition they may just be trying to negotiate a better deal.

Use meetings with your suppliers to ask what their other customers are doing. They may not tell you everything you want to know, but they may have something useful to say.

How to act on the competitor information you get
Evaluate the information you find about your competitors. It may help you spot whether there are gaps in the market you can exploit or indicate whether there is an oversupply in certain areas of your market, which might lead you to focus on less competitive areas.

Draw up a list of everything that you have found out about your competitors, however small.

Put the information into three categories:
• Are they doing a better job that you, could learn from.
• What they're doing worse than you are.
• What they're doing the same as you are.

What they're doing better than you are, that you could learn from
If you're sure your competitors are doing something better than you, you need to respond and make some changes. It could be anything from improving customer service, reassessing your prices and updating your products, to changing  the  way  you  market  yourself,  redesigning  your  literature  and website and changing your suppliers.

Try to innovate not imitate. Now you have got the idea, can you do it even better, add more value? Your competitors might not have rights over their actual ideas, but remember the rules on patents, copyright and design rights.

What they're doing worse than you are
Exploit the gaps you have identified. These may be in their product range or service, marketing or distribution, even the way they recruit and retain employees.

Customer service reputation can often provide the difference between businesses that operate in a very competitive market. Renew your efforts in these   areas   to   exploit any   deficiencies   you   have   discovered   in   your competitors.

But, don't be complacent about your current strengths. Your current offerings may still need improving and your competitors may also be assessing you. They may adopt and enhance your good ideas.

What they're doing the same as you.
Why are they doing the same as you, particularly if you're not impressed by other things they do?
Perhaps you both need to make some changes.

Analyze these common areas and see whether you think you have got it right. And even if you have, your competitor may be planning an improvement.
Be innovative and different, but not at the expense of your overall business plan.

Remember don’t spend too much time looking over your shoulder at the competition and neglecting your own business.

Did this article help you? I would love to get your feedback.

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