Watching the Competition

You can learn a lot from your competition. By analyzing your competitors, you can
anticipate new opportunities and developments in your market, make better operations
decisions and more effectively evaluate your own strengths and weaknesses.

by Kelle Campbell NFIB

The first step in your competitor analysis is to identify the current and potential competition.
Who are your top competitors? What about your potential or indirect rivals? Next, you gather
relevant information and analyze the data in order to find the answers to specific questions.
Below are examples of what you may wish to find out about rivals:

What are my competitors’ strengths and weaknesses?

How many clients/customers do they have? What type?

Are my fees/revenues in line with similar businesses in my area?

Are there groups of buyers that are not being targeted by any of us?

Are my competitors using new technology to increase their advantage?

Which of my competitors could I approach for possible partnerships?

What kinds of investments are my competitors making? Are they in debt?

Can I make my products/service better, faster or cheaper than the competitions’?

Although many people think monitoring the competition must involve illegal espionage
practices, you can get the information you need to stay current in your market legally and
ethically. You have several publicly available sources at your fingertips:

Web Sites

Web sites supply a great deal of information about the way that people do business.
Depending on the site, you can find client/customer lists, price guides and testimonials that
can clue you in on what’s valued most about your rival’s offerings. You may also find
biographies on key personnel and the skills and experience they offer.

In addition, you can investigate the types of products and services offered, plus any
information that they post as news releases or announcements. This is also an opportunity
to analyze how your rivals increase site traffic. You can do this by using Web searches to
find individual rankings in search engines and to see how many outside pages mention them
or link to them. You should also determine what aspects of their sites encourage return
visits.

Media

You can find out a lot about businesses through the journals, newsletters, wire services and
newspapers that use specific businesses as spokespeople or examples in their stories.
They also provide case studies of how organizations solved situations or enhanced their
operations. If possible, scan trade journals regularly for mention of rivals.

In addition, you should try to get your hands on competitors’ "house organs" or internal
publications. Many organizations produce newsletters in which they report additions to their
staff, job openings, current activities, achievements and so forth. Brochures, information kits
and other promotional materials are also useful resources.

Online Forums and Email Lists

Another venue for gathering information is through online forums and mailing lists. Join a
forum or list in order to contact people in your field. Most list and forum members are very
willing to reveal resources, rates and techniques.

Trade and Professional Associations

You can also question associates in the flesh through professional societies and
associations. Additionally, associations gather a great deal of information about member
businesses through directories, surveys and reports on market trends, all of which will be
available to you if you join.

Competitors’ Locations

If you can, inspect competitors’ businesses personally. Drive by their work sites and make a
note of how their location affects customer traffic. Visit them in order to observe their
customer service and store traffic. While you’re there, purchase samples of their products for
comparison with your own.

Databases and Public Records

You can find information from regulatory agencies such as your state’s department of
licensing and regulations or from online databases and directories. Many small businesses
list information about their services in these databases in order to attract prospects while
other databases actively gather information on businesses and make it available to the
public.

Interviews and Surveys

Ask your sales associates, customers, suppliers, industry experts and marketing staff how
they rank your prices, quality, service, location and marketing against the competition’s. Be
open to whatever they say, even if you don’t like it.

After you’ve gathered all the information, you can make informed plans for maintaining
customer loyalty or increasing market share. If you’re still feeling squeamish about checking
up on your competitors, consider this: the really successful ones are already gathering
information on you.

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