Steps to Stay Ahead of Competitors in Your Business
“I’ll insist my competitor is the greatest so that when I beat him, I won’t be calling myself the greatest — I’ll be proving it through my actions.” – Jarod Kintz
Knowing your competition is an integral part of doing business. By identifying your competitors and evaluating their strengths and weaknesses as they relate to your own product or service, a competitive analysis is critical to staying ahead of your competitors.
Running a small business is usually very competitive. Small business owners have to deal with more with than just trying to meet their sales goals, so you need to understand your competitors in relation to your own business.
To learn about your competitors takes time, requiring research as well as observation. Most importantly, you need to turn the information gathered into action.
A Competitive Analysis – Where to Start
The first part of your competitive analysis only requires basic research. You’ll just be looking up and making note of easy-to-find facts about your competitor’s business. For this part, you’ll need to have some idea about who your small business competitors are, where to find their website and social media pages, and perhaps have access to their offline marketing materials such as brochures, ads, and posters.
Here are the steps you need to take to get started:
1. List Your Competitors
Start by compiling a list of at least three of your main competitors. Include those with a similar product or service, as they usually serve the same market as your service. Similar size is important too, so look for small or medium size businesses; as big chains are not often a direct competitor.
2. Write a Brief Overview
Write a brief description of the competitor’s business and why you consider them as a competitor.
3. Targeted Customers
Identify the customers that competitors tend to draw. Review their marketing materials, social media, website, blog, where they advertise, etc. This material provides information on your competitor’s targeted market. The information most likely will include a variety of demographics such as age, location, income and if a product or service is geared specifically to gender.
Also, your competition may have separate marketing messages for different segments of its demographics.
4. Competitor Pricing
Be sure to list how your competitors price their products and services. Include other information such as pricing for credit cards or installment purchases, pricing for product and service packages, and, of course, shipping fees.
In-Depth Competitive Analysis
Once you have gathered the basics about your business rivals, take time to look deeper and explore behind their scenes strategies.
5. Itemize Their Marketing Strategy
Marketing is one of the main areas where you will compete directly you’re your competition. Most small businesses to do not have the resources to engage in expensive marketing plans, but it is essential that your customers become familiar with your company and its message, as they will more likely choose you when making their purchase.
It is important to understand your competitors marketing messages as well as your own. Evaluate the following:
- Print Marketing
- Social Media
- Website
- Blog
- Advertising
- Promotions, Sales, or Events
- Partnerships
6. Identify Any Competitive Advantages
Find out what competitive advantage, if any, your business rival may have. What do they offer that others do not? How do they outperform their competition?
Look into some of these possibilities:
- targeting a highly specific market
- lower prices
- frequent discounts and promos
- location
- compelling marketing (such as memorable imagery, taglines, or jingles)
- large online audience via their website, blog, or social media accounts
- broader range of products and services
As you review these possibilities, think about your own competitive advantage can be and locate areas where you can do better than your competitors.
7. Competitors Strengths and Weaknesses
As you complete the research on your competitors, it is time for a summary and analysis. List all aspects of the competition and note both strengths and weaknesses. Under strengths, note how well you are equipped to deal with those strengths and how you could outdo them elsewhere.
Take the same approach for their weaknesses. Are their weaknesses an opportunity for you? Can your competitors overcome their weaknesses easily and if so, will that affect your business?
Know the Competition
If you have followed the steps and completed a competitive analysis, you will have an in-depth understanding of your competitors as well as your own business. Now is the time to act.
The new insights you have learned may require making necessary changes to your business plan. Will you need to adjust your pricing – do you need to redirect marketing avenues? Review the analysis – take the steps!
You will not need to contend with your competitors in all aspects of doing business – everything from marketing to product or service quality – but you should concentrate on several things to increase competitive advantage.
Without adjusting your plans in some manner, your business may be undercut by tough competition. Keep in mind, rival businesses are likely doing a competitive analysis of your business too.
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