There’s a great deal to focus on when you’re trying to grow your business and make it profitable. One area that small business owners all too often miss is researching their competitors. This is a small part of your day-to-day business operations, but it can make a significant difference in the effectiveness of your marketing. In fact, competitive research should be a critical factor in almost all your business and marketing decisions from the very start.
Do you know what your competition is up to? You should, and here’s why:
What Sets You Apart – How do you know what’s unique about your business if you don’t know what your competitors are doing? You may be offering the same or similar products to the same or similar people and in the same or similar way. This is definitely not a good thing for any business. You need to uniquely fulfill the needs of your market in a way that no one else is currently doing it.
Avoid Doing What’s Been Done – What if you have a great idea for an ad but your competitors have already run one like it? Simply knowing what your competitors are doing is a good way to make sure you don’t do something that’s already been done. A number of forehead smacking moments can be avoided. And you might even find out that what they’ve done didn’t even work!
Know Your Strengths and Weaknesses – You may have an intuitive sense of your business’s strengths and weaknesses. But you can never truly know unless you compare these strengths and weaknesses to those of others. You can truly understand what position your business occupies in the market. Through comparison with your competitors, you can understand which natural strengths you can play to for an advantage, as well as which areas need improvement.
Identify Opportunities – If you know what your competition is (and isn’t) doing, you can find gaps where they’re not meeting the needs of the market. These gaps present perfect opportunities for you to fulfill a need. For example, there may be one segment of your market that your competitors ignore. You can dominate this segment.
Steal Ideas – Okay, maybe we should say something more like, “Borrow and modify ideas” or, even better, “Learn from your competitors’ mistakes.” You can watch your competitors and take note of their successes and failures, analyzing these successes and failures for wisdom you can use for your own business. For example, if a competitor’s new product bombs, you can discover why and improve upon it. If they ran an ad for only a brief period of time and then stopped, it’s probably an indicator that the ad or the location didn’t pay off.
No business is an island. You need to know what your competition is up to so that you know what’s going on in your market. This can alert you to new trends, new developments in your industry, the market’s changing tastes, and more.
This is a somewhat harsh way to put it, but business is in some ways like war. You need to know as much as possible about your “enemy”, even if you’re on friendly, cooperative terms. That way, you can avoid conflict and even become allies.