What You Don’t Know Can Hurt You
Most business owners agree that competition is a good thing. Sure, it’s tough when the competition underprices your products or outperforms you during your leaner quarters. But people start businesses because they feel they have what it takes to compete and win. Clever small and medium business owners know that if they do their jobs right, they can leverage the research, development, marketing and advertising discoveries of others. They can learn from them, then change course, ride the crest of trends and avoid the rocky waters of bad business decisions.
Keeping tabs on competition is a great way to strengthen your business. Monitor competitors on an ongoing basis and get to know their behavior and can even anticipate what they’re likely to do next. You can learn from their mistakes, note connections between decisions and market gains or losses, and adjust your strategies and offerings based on their experiences. With the right data and the proper insights, you’ll find ways to play fair yet give your company a powerful edge.
Let the Competition Make the Mistakes (So You Don’t Have To)
Your competition will test the waters for you, showing which marketing plans work and which don’t. They’ll draw customers’ attention to your shared market segment and build audience desire for their products and yours. Meanwhile, you, the savvy entrepreneur, will take advantage of their research, marketing and advertising efforts by noting their successes and failures. By seeing how other companies market their products, you’ll see what works. You’ll find out what customers are hungry for—and then you’ll give it to them.
Step Right Up, Everyone’s a Winner
The word “competition” sounds, well, competitive. It brings to mind athletes, fighters, tough folks who don’t back down. Those might be winners, but is that how you want your customers to see you? Sometimes, maybe—the hard sell CAN work. Carnival barkers bark because shouting gets attention. But you can compete in quieter ways that feel welcoming and enjoyable to your customers, and most of the time you should.
Low prices bring smiles, but so do more convenient or appealing locations, personal attention, customization of products and services, and additional features others don’t offer. Brick-and-mortar businesses shine when they offer unique variations. Luxurious, curated or otherwise unusual options stand out in a cookie-cutter market landscape. Small businesses are uniquely able to follow (or start!) trends by changing direction quickly, coming up with fresher offerings or newer version of products faster than big businesses can. Brick-and-mortar SMBs know their local markets especially well and should apply their specific knowledge to their offerings, making sure that regional favorites and their local customers’ special needs are catered to in ways that the big guys just can’t match.
A Bit of Competition Is Good for You
Perhaps you compete with someone whose offerings are barely different from yours. Even direct competition can benefit both parties if you differentiate how you sell, focus on different segments or locate yourselves conveniently for different groups of customers. Your competition’s ads may help your business if potential customers see and like what they offer, but find that you provide it more conveniently, cheaply, or with better service, delivery or customization.
If the competition is indirect—you serve the same market segment with similar but differentiated products—being near each other can help you both. If consumers know a particular neighborhood is full of great restaurants, say, the increased number of people who frequent that area may mean your mid-market tapas restaurant fares better there (near other tapas places) than it would on the other side of town, which offers no tapas but appeals more to customers who want fast food, not sit-down meals.
Seeing other businesses eat into your market is scary, but their presence spurs you to think harder about your customer’s actual needs, not just theoretical ones. Try new offerings, or improve your customer service. Before you do, start digging around to find out about your customers. Spatially can help. Using our location intelligence tools, you’ll see where your customers come from, who they are, and whether hidden segments are waiting to be discovered. Uncover spending patterns, see which people already spend time in your area and where they tend to shop.
Understand Your Market, Then Compare It to Others
Once you’ve examined your market, determined its size and reviewed customers’ demographics, Spatially will help you learn about competitors’ customers, their market size and their business area’s traffic patterns. Determine your company’s Product/Market/Location Fit (PML Fit) score, which lets you see how well your location matches your business. Compare it to competitors’ scores, noting the variables that give you (or them) an edge. You’ll uncover challenges to take into account when determining where to move, or when considering what business improvements to make.
Spatially gives an overview of each business area, so you can mark which businesses are competitors and which are complementary businesses whose presence might benefit you. You may want to engage in shared marketing, advertising, events or promotions with them. We can help you and your strategic partners see how your markets overlap and compare your shared market areas with those of your competition. Our tools let you find and reach those most likely to become your customers. This is the idea behind our latest product, Spatially Ads, an advertising software platform that identifies customers who spend time near your business, then serves your Google AdWords or Facebook ads directly to them.
Online Resources for Competitive Analysis
The first places people go to understand their competition are to a search engine and to competitors’ web pages. See how they present themselves, how they describe their companies and products, and how frequently they update information. Check their blogs and newsletters to see what topics they think matter most. Look at their About Us page to see what sorts of employees they hire. Check their job listings to see what new directions they’re moving in. Look up the LinkedIn pages for each company’s major players, and see whether their speeches, interviews or tutorials appear on YouTube.
Many businesses go to Google Trends to follow the latest activity in their industries, compare their company to others and see where people who visit their sites also go. Following competitors’ social media accounts provides insights about their focus and interests. Set up GoogleAlerts for each company, industry or product you want to follow, and set alerts for your own company, so you know what other people are saying about you.
A number of websites offer traffic tracking for your own and competitor websites. Check stats on competitors’ search rankings, backlinks, traffic, keywords—data that help you uncover strategies and plan your own tests of keywords and niches. Competitive analysis sites can show which strategies work for other companies, determine which ad copy is most effective, and measure engagement and response rates. Some sites are free, many charge a fee.
When you consider fee-based analytical tools, see whether they offer free trials; make sure their features meet your needs. If a promising site doesn’t offer a free trial, contact the company directly and ask for one. Many will do this upon request, and some will extend your trial period if you need more time. A few sites and tools make some functionality available for free but charge for more sophisticated analysis. Spatially offers a wealth of analytics free to all users upon registration.
Find Reliable Sources of Industry News
Trade associations, advocacy groups and industry analysts do research and publish the results. By reviewing their insights into practices, strategies and investments of competing companies, you can learn a great deal. Many companies will divulge plans and expectations or share enough data to allow you to read between the lines. Consider whether these actions might benefit your company, then determine how to differentiate your offerings.
Read Online Reviews (Both Your Own and Others’)
Online review sites like Yelp and Citysearch provide a wealth of free information about the competition’s (and your own) pain points. Bad reviews (and company responses) show you where the weak links are; good ones emphasize areas you might want to improve or emphasize. Respond politely to online reviews of your own company whether comments are positive or not. You can turn a bad review into a positive customer experience if you handle it with grace and a sincere effort to improve the situation. Customers will note your efforts and will often give you the benefit of the doubt when they see that you don’t shy away from problems.
Check Out the Competition in Person
Attend industry trade shows and conferences and join industry associations to hear how competitors describe themselves and their offerings. Visit competitors' booths, observe interactions with customers, pick up literature, and evaluate their products. Nothing beats first-hand experience when you’re gauging your competitors’ products, style, marketing effectiveness, strengths and weaknesses.
Go to Your Customers for Free Market Research
Your customers are a valuable source of competitor information. Each new customer has useful info about experiences with other companies. Don’t be afraid to ask who they’ve bought from, and why they’re buying from you now. Following up with customers who stopped buying your goods or using your services can also be valuable. If you show care and concern when they stop doing business with you, you can identify what they preferred about your competitor. Your concern may even lure them back for one more try.
Sometimes It’s the Little Things that Matter
It’s fine to enter a market with strong competitors if you emphasize your uniqueness and add value that others don’t. But small businesses can spread themselves thin trying to deal with too many aspects of a competitive business—focusing on a smaller niche might serve them better. Consider how an ongoing relationship might be more valuable to your customers—differentiating through customization, personal attention, in-home or in-business service, delivery or pick-up sometimes gives a smaller business the edge over a big brand.
Focusing on service alone is risky. Large businesses offer service, too, and selection and consistency. If you make service your differentiator, make sure it’s highly valued and make it something that local competitors don’t do as well as you.
Make Your Size Work for You
If your competition is larger, they’ll have a lot of advantages because of their scale and size. So don't compete on those levels. Small and medium businesses have a lot of potential to be better in ways bigger businesses can't—SMBs are more nimble and adaptable to trends and customer requests, and they connect on a more personal level with customers.
Well-run small businesses can and often do outperform larger counterparts in leveraging trends and providing specialized, localized customer service and offerings. If you’re watching your industry and your competitors carefully, you can respond quickly to both troubles and opportunities. Use your local expertise (and the expert insights of others) to benefit your business and your customers.