Understand your competitors
Knowing who your competitors are, and what they are offering, can help you improve your products, services and marketing. It will enable you to set your prices competitively and help you to respond to rival marketing campaigns with your own initiatives.
You can use this knowledge to create marketing strategies that take advantage of your competitors' weaknesses, and improve your own business performance. You can also assess any threats posed by both new entrants to your market and current competitors. This knowledge will help you to be realistic about how successful you can be.
Who are your competitors?
Where to look for your competitors and how to identify them using sources such as business directories, advertising and press reports
All businesses face competition. Even if you're the only restaurant in town you must compete with cinemas, bars and other businesses where your customers could spend their money.. With consumers buying more goods, services and leisure options online, you are no longer just competing with local businesses.
Your competitor could be a new business offering a substitute or similar product that makes your own redundant. Competition is not just another business that might take money away from you. It can be another product or service in development. You should start selling or license it before somebody else takes it up.
Identify your competitors
It's important to stay aware of what your current competitors are doing. You should also be on the lookout for possible new competition.
You can learn who your customers are from:
- local business directories
- the Northern Ireland companies directory
- your local Chamber of Commerce
- press reports
- exhibitions and trade fairs
- searching online for similar products or services
- information provided by customers
- flyers and marketing literature that have been sent to you - quite common if you're on a bought-in marketing list
- searching for existing patented products that are similar to yours
- planning applications and building work in progress
What you need to know about your competitors
Examine how your competitors do business, what they offer and how they treat their customers
Monitor the way your competitors do business. Look at:
- the products or services they provide and how they market them to customers
- the prices they charge
- how they distribute and deliver
- the devices they employ to enhance customer loyalty and what back-up service they offer
- their brand and design values
- whether they innovate - business methods as well as products
- their staff numbers and the calibre of staff that they attract
- how they use IT - for example, if they're technology-aware and offer a website and email
- who owns the business and what sort of person they are
- their media activities - check local newspapers, radio, television and any outdoor advertising
- their online presence - check online networking sites as well as their website
Find out as much as possible about your competitors' customers, such as:
- who they are
- what products or services they buy
- what customers see as your competitors' strengths and weaknesses
- whether there are any long-standing customers
- if they've had an influx of customers recently
How to do competitor research
How to research your competitors using the press, exhibitions, the internet and trade associations
Try to find out as much as you can about your competitors. Look for articles or adverts in the trade press or mainstream publications. Read their marketing literature. Check their entries in directories and phone books. If they are an online business, ask for a trial of their service.
If your competitor is a public company, read a copy of their annual report. Limited companies have to lodge their accounts with Companies House.
Go to exhibitions
At exhibitions and trade fairs check which of your competitors are also exhibiting. Look at their stands and promotional activities. Note how busy they are and who visits them.
Look at competitors' websites. Find out how they compare to yours. Check the site to see if you could improve on it for your own website. Is the information easy to find?
Business websites often give much information that businesses haven't traditionally revealed - from the history of the company to biographies of the staff. They may provide case studieson customer success stories.
Sign up to your competitors email newsletters to keep track of their business news like new customers or product launches.
Use a search engine to track down similar products. Find out who else offers them and how they go about it.
Organisations and reference sources
Find information on competitors using:
- your trade or professional association, if applicable
- the Northern Ireland Chamber of Commerce
- directories and survey reports in any business reference library
- market research and market reports
- Northern Ireland companies directory
What they're planning to do
Try to go beyond what's happening now by investigating your competitors' business strategies, for example:
- what types of customer they're targeting
- what new products they're developing
- what financial resources they have
Talk to your competitors
You can learn about your competitors by getting to know them. Phone them to ask for a copy of their brochure or get one of your staff or a friend to pick up their marketing literature.
You could ask for a price list or enquire what an off-the-shelf item might cost and if there's a discount for volume. This will give you an idea at which point a competitor will discount and at what volume.
Phone and face-to-face contacts will also give you an idea of the style of the company, the quality of their literature and the initial impressions they make on customers.
It's also likely you'll meet competitors at social and business events. Talk to them. Be friendly - they're competitors not enemies. You'll probably share common problems. You'll get a better idea of them - and you might need each other one day, for example in collaborating to grow a new market for a new product.
At the same time, make sure that you are competing fairly and do not behave in an anti-competitive fashion. Fixing prices or agreeing not to compete is illegal. This includes activities with a price-fixing effect, such as discussing your pricing plans with competitors.
Listen to your customers and suppliers
Make the most of contacts with your customers. Ask which of your competitors they buy from and how you compare. Use your judgement with any information they volunteer. For instance, when customers say your prices are higher than the competition they may just be trying to negotiate a better deal.
Use meetings with your suppliers to ask what their other customers are doing. They may not tell you everything you want to know, but they may have something useful to say.
Use competitor research to improve your business
The ways you can improve your business using knowledge about your competitors
Evaluate the information you find about your competitors. It may help you spot gaps in the market you can exploit or indicate an oversupply in certain areas. This can lead you to focus on less competitive niches.
Draw up a list of everything that you have found out about your competitors, however small.
What they're doing better than you are
If your competitors are doing something better than you, you need to respond and make some changes. This could involve:
- improving customer service
- reassessing your prices
- updating your products
- changing the way you market yourself
- redesigning your literature and website
- changing your suppliers
Try to innovate not imitate. Now you have got the idea, can you do it even better, add more value?
Your competitors might not have rights over their actual ideas, but remember the rules on patents, copyright and design rights. See protecting intellectual property.
What they're doing worse than you are
Exploit the gaps you have identified. These may be in their product range or service, marketing or distribution, even the way they recruit and retain employees.
Customer service can be the difference between businesses that operate in a very competitive market, it's important to understand your customers' needs. Renew your efforts to exploit any deficiencies you have discovered in your competitors.
Don't be complacent about your strengths, or areas where you and your competitors take the same approach. Your current offerings may still need improving and your competitors may also be assessing you. They may adopt and enhance your good ideas or be planning their own improvements.