Unless you’re doing something that no one’s ever done before, your business will face competition. And even if you’re doing something completely unique, you’ll have indirect competitors that sell different products but address the same customer needs.
The best way to succeed over your competitors is by getting to know them. Identifying what they offer and what their strengths and weaknesses are is crucial for your business. And not only when you’re starting! Analysing your competition regularly helps you stay up to date with current trends and any changes in the industry, and helps you learn what you need to improve to make your business stand out.
According to Crayon, a research firm based in Boston, 41% of business professionals strongly agree that competitive research is critical to their company’s success.
But what exactly do you need to know about your competitors?
How big your competition is
Start small. Don’t try to find out everything at once. The first thing you need to know is how many competitors you have and who they are. This will give you a better understanding of how crowded the market is and how hard you’ll have to ‘fight’ for the customers. Knowing what exactly your competitors do will help you get an idea of how your products or services compare to theirs. Once you’ve got that idea, you can start thinking about how you’re going to shout about things that make you different.
Who your competitors’ customers are
Research your competitors’ customers. Do they have a lot of one-time buyers? Or do they have many happy customers that regularly come back to them?
The best way to find out these things is by reading reviews. Not only the ones on their official website but other platforms as well – because who wants to put negative reviews on their website? This will give you a better understanding of what people like and dislike about your competitors and will let you know what your potential customers expect from you and how you can provide it.
How their prices compare to yours
Understanding your competitors’ prices doesn’t mean you have to match them. This is a great indicator for you to know where you fall in line with the greater market.
You need to keep your prices competitive but neither too low, nor too high. Very low prices can not only lower your profits but also put off potential customers from buying from you, as they might question the quality of your products or services. Setting your prices too high can make them turn to your competitors for a bargain instead.
Also, make sure you check if they have any special offers or discounts and how long they last. This will let you know when your competitors have fewer customers and how they deal with it.
What your competitors do to attract customers
Loyalty cards? Vouchers for regular customers? Any add-on features such as free upgrades? You need to find out all the ways your competitors make their products or services more appealing.
If they have all sorts of discounts, offers and loyalty schemes in place, it might be a sign that the business is struggling to make sales. So don’t copy – find your own and better ways to engage with your customers!
What their marketing strategy is
Spend a great deal of time researching their online presence, social media channels and any offline marketing. Find out what keywords they use, where and how often they advertise and what works well. Once you know that, you can adapt the best practices and avoid their mistakes when creating a marketing plan for your business. And if you need more information on how to structure an effective marketing plan, read our blog post about it.