Everyone who is running a business has at least one competitor and one of your most vital assets is knowing what these competitors are doing and more importantly what they are not doing. This information is invaluable and can help you in setting a level for your prices, building a new website, and perhaps most importantly, finding any gaps in the market that have not been explored yet.
Whenever, I undertake a market research project for a client, a competitor analysis is where I always start.
BUT I DON'T HAVE ANY COMPETITORS...
Some businesses don’t think that they do have any competitors, but I beg to differ. Consider the budding entrepreneur who is looking to start a sandwich shop in a location where they are currently no other sandwich shops. They haven’t got any competitors, right? Well, people still have to eat, so where are they going at the moment?
Is there a supermarket nearby? Do local businesses have their own restaurants? Are people bringing their own lunch in? OK, these places may not be other sandwich shops, but they are competitors and will be potentially taking customers away from you.
I HAVE TOO MANY COMPETITORS...
The first thing is not too panic - even if you have come up with the best idea for a new product or service that your business can offer and find out that Joe Bloggs down the road has just started to do this too. If there are competitors, it usually means that there is demand for your product or service, and this has to be good news.
The next step though is to find out as much information as possible about your competitors so you can make yourself different and this is especially important if there are too many suppliers to count.
HOW DO I FIND OUT ABOUT MY COMPETITORS?
The quickest and easiest way to start finding out some information about your competitors is to do a search on Yell or one of the search engines for others in your industry. You can also use the Yellow Pages or the library. Look at their websites; articles about them in newspapers and magazines; and adverts they have produced.
You can also request a brochure from your competitors or prices by calling them. Posing as a potential customer is sometimes the best way to do this and will give you a chance to assess how they deal with your enquiry.
Make notes as you do this, jotting down anything that you find interesting about them. This might be the way they have arranged their website, prices that they charge, or the particular product or services that they offer. The aim of this exercise is to find out what makes them stand out – why should their customers go to them instead of someone else? And, believe me, sometimes the answer to this question is nothing.
HOW DO I MAKE MYSELF STAND OUT FROM MY COMPETITION?
Once you have had a look through most, if not all of your competitors and got some idea of what the offer and what makes them stand out, you can begin to look for how you can make yourself different from them.
Traditionally, businesses tend to make themselves stand out by saying that they offer a lower price, better qualifications, superior service and so on. However, these ‘niches’ will only last a certain amount of time. Due to the fact that everyone compete on these key issues, eventually the competition end up becoming the same. The trick is to come up with something that your competitors really are not doing at the moment.
The best way to do this is by exploring any gaps they have left. Are there any particular customers that they have not concentrated on? Do you have a new service to offer that they are not currently providing? Sometimes these gaps can be easy to identify, but sometimes you will also need to have a look at the industry as a whole and your customer requirements to come up with the ideas. If you’re struggling to come with something fresh, try sleeping on it – that’s when the best ideas will occur to you.
IS ONCE ENOUGH?
Doing this analysis is hard work and time consuming, but generally doing this once isn’t enough. New competitors are starting businesses and old ones are looking for new ways to grow their business all the time. The market continually changes. If you find a gap in the market, chances are that someone else will find it too and you will need to know about this in order to stay ahead.
I generally recommend that businesses complete this type of exercise at least once a year to see what is happening. Even if nothing has changed, wouldn’t you rather know this than be knocked sideways by the market leader?
THIS SOUNDS LIKE A LOT OF HARD WORK...
I would agree that it sounds like a lot of work and in reality it is. There are a number of suppliers out there, including Exceptional Thinking that can do this analysis for you and because competitors are looked at in conjunction with your industry as a whole and likely customers, chances are that any potential gaps in the market will be easier to identify.
Costs of these research projects vary considerably and some are more affordable than others. Then again, budgeting for this type of analysis might be very well worth your while as you can ensure that the project covers everything you need to know and the information will often be obtained quickly and easily, leaving you to concentrate on running your business.
IT SOUNDS LIKE I ONLY NEED TO DO THIS IF I'M A NEW BUSINESS THOUGH.
I personally believe that knowing what your competitors do is vital no matter how long you’ve been running your business. Most owners who have been running their business for a while do have a general feel for what others are doing. However, an in-depth analysis once a year can pay dividends.
To give an example of this, I have worked with a number of clients who have had seasonal variations in their company; that is, during summer they are very busy and during winter, they are fairly quiet. Assessment of competitors though, has revealed some interesting information that these owners have used to build up their business during quieter times and now these businesses are busy all year round.
It just goes to show that knowing what your competitors do is your most vital asset, no matter whether you are just starting out or celebrating your 20th business anniversary.
Exceptional Thinking can be contacted on 0845 644 9371 or email info@exceptionalthinking.co.uk.
To learn more about this author, visit Helen Dowling's Website.
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