Unless your business operates entirely alone as the only supplier in its field with an unquestioning, blindly loyal customer base, then it has competition. While this may seem like the ideal trading conditions, a lack of competition in any field leads to stagnation and indignation in a company — and no one wants that.
How to Understand Your Competitors — And Use Them to Your Advantage
In order to better your business and develop it in a way that will prove profitable and beneficial to both company and consumer, you need to understand and monitor those competing with you. How? Let us explain.
Who Qualifies As Your ‘Competitors’?
A direct competitor is any business operating in the same market as you, selling a similar product, service, or experience. For example, Pepsi and Coca-Cola are direct competitors — both selling similar products in similar outlets to similar customers, and indeed often so similar that they’re interchanged.
An indirect competitor is any business that a consumer may choose to spend their money with other than yours, but which doesn’t necessarily operate in the same industry.
For example, Odeon cinemas are in indirect competition with Hollywood Bowl, Gravity Trampoline Parks, and local arcades, as these are places where people may choose to go and spend their money rather than visiting Odeon and watching a film.
Although it’s a good idea to hold basic comprehension of all your competitors, direct competition is the most important.
How to Get Info on the Competition… without Approaching the Competition
While it doesn’t hurt to use competitors occasionally to experience their products and services first-hand, there are lots of sources of competitor information that don’t involve approaching them directly. These include:
- Basic online research – keeping an eye on Google Alerts and other updates on the internet.
- Social media – following the competition on social media channels can give an indication of their marketing communication strategies as well as their reception.
- Satisfaction surveys – asking your own customers (or relevant suppliers) if, how, and why they use competitor’s products and services over yours – or if not, why not.
- Press coverage – the monitoring of press coverage can be done easily online and helps demonstrate what’s being focused on (or not) by competitors.
- Patent and property applications – keep an eye out for any moves made by the competition in your field. A new patent could indicate a new product development!
What to Understand: Strategies Being Pursued by Competitors
One of the key things to understand about your business’ competition at any given time is the strategies they’re pursuing. Are they moving into a new market? Are they converting to new technology? Are they hiring a new specialist director?
Anything that can give an indication of the competition’s moves can help you better understand what direction their business development is moving in — and allow for you to respond accordingly.
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Of course, not all strategies are born equal, and not all will work for you just because you’re in the same market or industry. But knowledge is power.
Having an idea of what may be coming up will lessen the risk of you being blindsided later on by something that has the potential to surprise and delight the very customers you don’t want moving to or working with them!
What to Understand: The Perception of the Competition
The way a business sees and thinks about its competitors is not the same as the way a customer will. Customer perception is critical for businesses to understand — in both how consumers think of them and their competition. The only way to do this is to approach customers directly, through satisfaction surveys or other means.
Understanding perception allows businesses to shift their communications, branding, products, and services to meet customer needs and wants rather than expecting them to shift to fit. This gives the opportunity to differentiate their brand, exceed expectations, and gain a competitive advantage.
What to Understand: What the Competition Is Getting Right — And Getting Wrong
No business is perfect, so, however many frustrations a competitor may be throwing your way, they won’t be getting everything right.
Knowing what customers like and dislike about other firms gives businesses the chance to mold their strategies to best meet their own needs. Both successes and missteps can be lessons without having to invest the time or effort into replicating them directly.
Customers will usually be more than willing to tell you what other businesses do better or worse than you, but this can also be judged through press coverage, social media ‘buzz’, and customer reviews.
There’s no need to fear competition in your market — if understood and reacted to properly, it can open doors and opportunities for your business to grow and flourish. Don’t consider others in your industry as a source of despair, but rather of development, pushing and prompting your business further through its journey.
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