You may start to feel tense when discussing how competing businesses are outshining yours – and that’s ok. A healthy level of competition can actually yield positive results for your own business. In fact, assessing your competition can help your business stay up to speed while finding new ways to innovate for future growth. For instance, you may come up with:
- New business solutions
As you assess your competitors, it’s important to remember that change isn’t a bad thing. The more you embrace change, new beginnings and new ideas, the greater your competitive edge in your industry will be. Businesses that are good at evolving usually stick around for a long time.
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How assessing your competitors helps your business grow
You never want to run a business without understanding what others in your industry are doing. Often, changes in your industry are led by customer expectations. This means you’ll want to regularly assess your competition to find ways you can improve.
Assessing competition can help your business grow by:
1. Avoiding complacency. Taking note of how your competitors are evolving and changing up their business approach can help you spark new ideas. You never want to stop innovating just because your business is already successful. When assessing your competition you should look at your competitors’ products and branding, especially. For example, if you’re seeing new products popping up on competitor websites, you may want to start innovating. Expanding the products or services that you offer will help keep you competitive in your industry.
Encouraging innovation at your workplace can also help your business by:
- Challenging your employees. Pushing your employees to try new things and think about solutions differently, helps them grow as individuals. Supporting your employees’ growth can help your business keep talent. It can also help you attract new talent. This will strengthen your operation.
- Reaching short and long term goals. If you’ve set financial goals as well as other business goals, innovating new solutions can help you reach them quicker. In fact, innovating new solutions may help you reach your goals sooner than expected.
- Improving your industry knowledge and skills. Assessing your competition and finding ways to improve may require you to learn a new skill set. This can come in handy in unexpected ways down the road. Learning a new skill or gaining new knowledge can only help your business.
2. Creating self-awareness for your business. Even if your operation is running smoothly, there may be business practices that you’re missing. Analyzing the way your competitors do business can allow you to gain insight into the business practices that you’re not currently doing. For example, are the majority of your competitors setting up a blog? Are they engaging and interacting with customers on this blog regularly? If so, you may want to look into setting one up.
As you facilitate self-awareness, you may also find ways to stand out from your competition. You may start to notice an area that no one in your industry has gone after. Use this to fuel your competitive advantage. Always be sure to share new ideas and insights with your employees. They can add to your idea and expand it in ways you may not expect.
3. Finding new niche markets. As you research, you may notice competitors marketing to a target audience that you do not currently go after. There may be opportunities to go after niche markets you haven’t gone after yet or thought of before.
Benefits of niche markets include:
- Better customer relationships. Niche markets appeal specifically to small groups of customers. This allows you to build more personal relationships with them.
- Reduced competition. You may be able to establish yourself as the leading source for a product or source in the niche.
- Increased visibility. Going after niche markets in addition to your current market, increases your total customer base.
4. Setting your business’s future direction and goals. Researching competitors can help you identify trends in your industry. It can also help you identify areas you need to improve. This can help you plan and set long term goals for success.
As you set your plans for the future, be sure to save some of your budget for the right insurance coverage. For instance, you’ll need workers’ compensation insurance for every employee you hire. You’ll also want business insurance to protect the business you’ve worked so hard to build.
5. Motivating you to continuously improve your customer service. Improving customer service is one way to gain a competitive edge. For example, say you offer the same quality product as a competitor. Customer service may be what sets your business apart from others. This is because customers that have positive experiences with your business may choose you over a competitor. Creating positive customer experiences can also help your business get more referrals. Happy customers spread the word.
Ways to improve your business’s customer service include:
- Using active listening skills with your customers. You want to make sure your customers feel like their questions and concerns have been heard.
- Admitting to mistakes and working hard to fix them. When you have a customer who has complained, you want to admit your shortcomings. From there, you want to turn their negative experience into a positive one. If you don’t, you may lose the customer. One way to flip the experience from negative to positive is to offer a discount on the product or service in question.
- Improving your team’s customer service skills. Go over the key traits and skills you’re expecting from your team when they interact with customers. These traits can include:
- Communicating clearly
- Being adaptable
6. Forcing you to take a deeper look at the market you go after. As you look at your competitors strategies, products, and promotions, you should also look at your target market. You want to see why your competitors are offering these to customers. Diving into the motives of your competitors can help you learn more about your target market. For example, many new innovations are centered on making products more convenient for customers.
How to Assess Your Business’s Competition
Assessing your competition doesn’t have to be expensive. To start, all you have to do is conduct a google search. As you search you should:
1. Identify and categorize your top 10 competitors. To identify these competitors you’ll want to look at three competitor categories. These categories are:
- Primary competitors. This includes businesses that offer the same products as you.
- Secondary competitors. This includes businesses that offer similar products as you. Their products may have slight differences.
- Tertiary competitors. This includes businesses that target the same market as you. They may offer different products or services, but their market is the same. For example, maybe you both appeal to senior citizens.
2. Outline key information about your competitors. Key information to look for includes:
- All the products and services your competitors offer
- What your competitors’ branding and marketing strategies are
- The size of your competitors’ operation
- The media outlets your competitors use to advertise and engage with their customer base
- What your competitors’ profitability has been in recent years
- What your competitors’ growth patterns have been in recent years
3. Look at your competitor’s strengths and weaknesses. To evaluate strengths you can look at what makes your competitor popular. For instance, are they popular because of their:
- Low prices
- High quality
- Strong search engine optimization (SEO) usage
- Strong social media presence
To evaluate weaknesses some areas to look at include:
- Overall reputation
- Financial stability
- Brand image and messaging consistency
4. Look at new technology advances and how they may impact your brand. For many businesses, technology can be the biggest competitive threat to their brand. For instance, CDs have become obsolete due to iPods and smartphones that both carry music digitally. Researching and anticipating these threats early is a key to keeping your business relevant. You’ll want to evolve your business and products accordingly. For example, Amazon evolved from an online bookstore and now is one of the largest online retailers of thousands of products. Netflix also evolved from mailing subscribers DVDs to offering a digital video streaming service. Evolving with technology often means making your products more convenient to users. Some technology trends to be mindful of include:
- Artificial intelligence (AI)
5. Look for conferences that your competitors attend. Going to conferences can help you learn more about:
- Your target audience.
- Vendors or suppliers your competitors use.
- What your competitor’s goals and plans are for the future.
Gain the best competitive insight from your own customers
Assessing your competition doesn’t stop with research online. Consider asking your own customers for feedback. Questions to consider asking them include:
- Why did you choose our product? This question is important for finding out why they may have been dissatisfied with a previous competitor’s product.
- What key features are you looking for?
- Are there any ways our product has been falling short or could improve?
Comparing customer feedback to information you’ve gathered can give you an idea of how competitors are fulfilling customer expectations. It can also tell you where competitors are falling short. In turn, you’ll likely be able to gain a competitive advantage.