When you are running a small business, you may be so focused on building and growing your profits that you aren’t even aware that you have competitors, much less who they are and what they are up to.
If you feel that looking in on your competition is unethical, or that it may somehow lead to you plagiarizing their ideas, you shouldn’t worry about that. Researching the competition is a time-honored tradition, and it’s the responsibility of every successful business to carry it out.
Why You Want to Research Your Competition
There are good reasons for conducting a little friendly research. The most important one being that you can learn from any mistakes your competitors have made. It makes good business sense to avoid common mistakes and even better sense to avoid the mistakes that can sink a business.
Another sound reason to check out the competition is so you can see what they’re doing that is working. If what they’re doing makes sense for your business, you can model their success.
How to Research Your Competition
It’s not always obvious who your competition is. For example, not every business is a Coca-Cola with a Pepsi next to them on the grocery store shelf. If you don’t already know who your competitors are, the first order of business is to find out. You can accomplish this in a variety of ways:
- Internet websites and newsgroups are a rich mine of information. Conduct a smart search using one of the main search engines and a careful selection of keywords that are appropriate to your industry.
- Reach out to your network of contacts to see if they are aware of any other businesses sharing your space. Here is where being a member of your local council or Chamber of Commerce can come in handy.
- An old-fashioned library search should not be discounted. Most libraries stock directories and journals of various industries and even have sections devoted to specialized business services.
- Don’t forget the phone book. Whether online or offline, the Yellow Pages still list more businesses than you can ever hope to locate on your own.
What to Look for When You Locate Your Competition
Once you’ve identified your competitors, you are going to need to know which information could possibly be of benefit to you. You definitely want to know what their customers are saying about them, and how they feel about your competition’s products and services. You can find this sort of information by searching social networks, blogs, and forums. You can even set up a Google Alert to let you know anytime someone mentions your competition.
If you competitors sell products online, it can be helpful to read through the reviews that people leave. They can often provide valuable clues regarding customer service and the quality of a product.
You will also want to examine their marketing strategy in great detail. Find out where they are concentrating their efforts and see if it might make sense for your business and your products to market in the same areas. Look at the way they brand themselves and figure out if what they’re doing is harming or enhancing their image.
Take a look at their prices. Are they charging double what you are for a similar product? That may prompt you to reexamine whether you need to adjust your price point.
Finally, find out where they get their supplies. Who distributes their goods? Are your competitor’s costs much lower than yours?
You can use the information you find to fuel your creativity. Generate fresh new avenues for marketing and branding; and even get clues on how to improve your products and your customer service so you can beat the competition.