The Advantage of Knowing Your Competition

Many businesses operate in complete ignorance of the market and in particular who their competition is. But using rivals as a benchmark for your business can be an enormous help in making your products and services stand out. It will enable you to focus your marketing efforts so that they really stand out and develop a strategy that avoids price competition.

As you construct your marketing strategy, you can use your knowledge of competing businesses, such as their strengths and weaknesses, to really focus on how you can improve your business performance in these areas. You can also assess any threats posed by them.

“If ignorant both of your enemy and yourself, you are certain to be in peril”- Sun Tzu

Who are your competitors?

All businesses face competition even if it is from an indirect source. However, it is not easy to get a complete insight into their full nature as they are going to be as protective about themselves as you might be!

But by doing some easy research, you can gain clues from such things as:

Advertising
Look for adverts placed in Trade Directories, local publications etc. Examine flyers and marketing literature that have been sent to you.
Press reports
Who is actively working on their PR? Keep a watch out in the local or national press, listen to the radio and TV.
Exhibitions and trade fairs
Well worth walking around and many are free to attend. Check which of your competitors are also exhibiting. Look at their stands and promotional activities. Note how busy the competition is and who visits them.
Questionnaires and information provided by customers
Don’t be scared, ask your customers and show that you want to actively improve your CRM. Don't just ask how well you're performing,make sure you ask which of your rivals they buy from and how you compare.

Use meetings with your suppliers to ask what their other customers are doing. They may not tell you everything you want to know, but it's a useful start.

...And beware - 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.
Searching on the web for similar products or services
This is a brilliant source of information. Start with a search on your area of business and look at competitor’s websites. Find out how they compare to yours. If there is an interactive part to the site, explore this discretely and discover if the information free of charge and how easy it is to find.
Use a search engine to track down similar products. Find out who else offers them and how they go about it. Websites can give you good tips on what businesses around the globe are doing in your business area.
Talk to your competitors
Why not phone them to ask for a copy of their brochure or get one of your staff or a friend to drop by and 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 rivals at social and business events. Talk to them. Be friendly - they're competitors not enemies. 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.
What you must never do is to deliberately exchange details with competitors which are commercially sensitive as this could be in breach of the Competition Act 1998.
The penalties for doing this have been highlighted by the dealings between Virgin Airways and British Airways in 2007 regarding fuel charges, with BA fined multi Łmillion as a result.

What you need to know about your competitors:

It will be of great value to you if you understand what competitive advantage exists for the products or services that your competition is offering. BoxingGloves

To do this, you need to examine:

the range of products or services offered and how they market them to customers

what their pricing policy is

how they distribute and deliver

the devices they employ to enhance customer loyalty and what back-up service they offer

how they have constructed Customer “tie-ins”
whether they innovate – look at their 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

a copy of their accounts posted at Companies House or their annual report - if they're a public company

their media activities - often displayed on the business website

You can access UK company information using the WebCheck service at the Companies House website

Discover How Your Competitors Treat Their Customers

It can be real eye opener to find out how your competition treats their customers. Those competitors that are customer focussed will be a great source of learning and provide development opportunities for you. After all, the best form of flattery is to copy something! Many businesses I come across don’t treat their customers at all well, so the market advantage for you to exploit will be obvious.

Try to find out as much as possible about your competitors' customers, such as:

who they are
what products or services different customers buy from them
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

Find Out What They're Planning

Try to go beyond what's happening now by investigating the business strategy of your competition, for example:
what types of customer they're targeting
what new products they're developing
what financial resources they have

How to act on the competitor information you get

Well, by now you must have a large volume of information about your competitors. You now need to work through this systematically to create a picture that you can then act upon. To do this, think about the following:

Athletics 1. What you can learn from and do better

If you're sure your competition is doing something better than you, you need to make some changes. It could be anything from improving customer service, assessing your prices and updating your products to changing the way you market yourself, redesigning your literature and website and changing your suppliers.

Try to innovate not imitate. Now you've got the idea, can you do it even better and add more value?

Your competitors might not have rights over their actual ideas, but remember the rules on patents, copyright and design rights.

2. What they're doing worse than you

Exploit the gaps you've identified. These may be in their product range or service, marketing or distribution, even the way they recruit and retain employees. Renew your efforts in these areas to exploit the deficiencies you've discovered in your competitors. But don't be complacent about your current strengths. Your current offerings may still need improving and your competitors may also be assessing you. They may adopt and enhance your good ideas so don’t forget to continuously review your own activities as well!

3. What they're doing the same as you

Why are they doing the same as you, particularly if you're not impressed by other things they do? Perhaps you both need to make some changes. Analyse these common areas and see whether you've got it right. And even if you have, your competitor may be planning an improvement.

Over time you will build up a fairly accurate picture to help you focus your marketing activity and wider business strategy

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