If you’re starting a new business, you want to make sure your service or product isn’t too unique forthe public. It helps to align yourself with your competition. Once you have identified your competitors, you can carve out your niche, finding the gaping hole in the industry.
"By monitoring competitors on an on-going basis you get to know their behavior and so can start to anticipate what they will be likely to do next," says Arthur Weiss, managing director of UK-based , a company specializing in helping businesses gain competitive intelligence. "You can then plan your own strategies so that you keep your customers and win (not steal) customers away from competitors."
There are a number of effective ways to research your competition:
Explore the internet
The internet makes research very easy these days. Search for keywords, trying different combinations. As you grow your business, you will need to continue to do this on a regular basis, so that you stay current and fresh.
Notice how the other companies promote their product or service. What does their website look like? Is their marketing strategy working? (Do you like it?) If so, maybe you can find away to use something from it for your marketing plan.
Alexa.com is a free tool to find out how popular a website is. It will detail the web traffic data for any site. There are other similar sites out there, some of which cost money.
Spend some time browsing their site. Check out their testimonial pages. Find out what their customers have to say. Chances are these are hot buttons for people, something you might use.
Use your eyeballs
It is always good to visit and talk with your competitors in person if possible. If you’re opening a used book store, check out others in your area. Chances are you’ll spot things you like and don’t like in the way they run their business. How do they organize their books? Where is the cashier located in the store? What incentives do they employ to encourage you to purchase today?
It has been my experience that most competitors are willing to talk to a newbie coming into the field.Some aren’t, some are. It’s worth asking. Find people in your chosen industry and ask tor their advice. I’m sure they did the same when they were starting out!
Here are some questions you might ask:
- How long have you been in business?
- How is the company doing?
- Do they have any advice for someone just starting out?
- What was one of the biggest mistakes they made in their first year?
- What strategy has worked the best for them to date?
If you work with a supplier,try talking to him or her about your competition. Of course you need to be sensitive in your questioning, as the supplier is unlikely to reveal anything too specific, but you could get an overall feel for the products they order as well as quantity.
Investigate the current word of mouth
You can get a lot of good research information by asking customers for their preferences. Start with your friends, asking them which stores in your industry they frequent.
For instance, if you’re opening a pastry shop, ask people where they go when they buy a birthday cake for their child. Why? Which is the best in town? That’s a good store to visit.
You can use social media for this research as well. After all, you can gain knowledge from competitors outside your neighborhood (and they might be more likely to help you, as your pastry shop will never compete with theirs for Johnny’s Batman cake). Visit their website and give them a call.
Make sure to ask which stores they have tried and disliked as well, making sure to find out why they were dissatisfied.
Keep up with the latest trends
It’s important to keep up with the latest trends in your chosen field. Fortunately, in this modern era,it is very easy to do so. Here are some tips:
- Read, read, read: It’s a good idea to read blogs and trade magazines in order to find out what your competitors are doing, if the regulations are changing and what the latest tricks of the trade might be.
- Industry conferences: Whenever possible, attend a trade show or conference for your industry, talk to your competitors face to face and listen to the latest seminars. Find out what others in your industry are offering and how they’re presenting themselves. Collect their marketing tools and study them.
- Search Engines: You can set up a Google Alert to let you know when new content hits from news, websites, etc. matching a particular search term. This can help you keep abreast of changes in the industry. It’s a free service, which will deliver a daily report to your email inbox.
- Internet tools: SpyFu.com is a paid service that helps you determine the keywords and Adwords purchased by your competitors. This can be a very helpful tool for your internet marketing campaign. Even if you don’t use a paid ad service, you’ll know the hot buttons your competitors use. Create blog articles around them.
- Social Media: Since many companies use social media to promote, it’s not a bad idea to monitor your competitors’ tweets, Facebook posts, etc. In addition, review sites like Yelp can help you keep track of the public sentiment about your rivals. Look at the bad reviews (and try not to gloat), as well as the good.
Form strategic alliances
As you work out your competitors it is also a good idea to reach out to businesses that are in your general field, but not specifically doing what you’re doing.
Build relationships with other complementary businesses. For instance, if you’re opening a game shop, it might work to partner up with a children’s book store for events. Or you could connect with a local chess coach to come in and run tournaments or lectures. Anything to bring business into the store.
Or if you’re a plumber, consider finding a few talented electricians, AC people, etc. You can work out a referral system, where you each refer the other business. Watch out though, as this can backfire if they aren’t reliable.
Part six of a series – The Yahoo Smart and Simple Guide to Starting a Business.
- Part one: Is it time to start up that startup business? and Part 1- Goals, Values and Ideas and Resources for Goals, Values and Ideas
- Part two: Build a winning business right from the start and Part 2: Defining your business concept and Resources for defining your business concept.
- Part three: Funding, Fraternity and Family and Part 3: Ownership, Funding and Family and Resources for funding and ownership
- Part four: The Name Game and Part 4: Naming Your Business and Resources for naming
- Part five: How to Brand your Business on a Budget and Branding: First Impressions Matter and Resources for Branding.