Who is your most influential direct competitor?
What are their current marketing techniques?
Are their staff happy and motivated?
Why do customers choose them and not you?
This article aims to encourage you to ask, and answer, these questions, gain an advantage over your competitors and thereby increase your own business potential.
Once you understand the marketplace, and your competitors, you can target your own products and services and respond in all areas of your business, including pricing, marketing, recruitment and overall strategy.
Your business is likely to have two groups of competitors: indirect and direct. Indirect competitors will offer products or services that can substitute the benefits that your products and services provide. For instance, a slimming club may be an indirect competitor of a health club. The consumer may choose to join a slimming club to maintain a healthier lifestyle as apposed to joining a health club. It is important to review your indirect competitors to assess diversification opportunities. For example, the health club could launch a slimming group or provide slimming drinks in order to take advantage of diversification opportunities and appeal on a wider level to the consumer.
Direct competitors will offer the same or similar products or services and will therefore pose a larger threat to your business. For instance, two hairdressers in the same locality may have separate customer groups, but will ultimately provide the same service. The customer's loyalty depends upon their satisfaction with their favoured hairdresser. However, if one business develops a new haircutting technique, receives positive PR or renovates the premises, that hairdresser may acquire customers from the other. It is important to be aware of what your competitors are doing, stay one step ahead of them and find innovative ways for your own business to flourish.
Who are your competitors?
Firstly, search the Internet for competitors through general search engines and directory listings. You can also look at the relevant trade association or industry body to ascertain competitors in your area. Look at market research reports, directories and survey reports available free in most business reference libraries. Once you have identified a general list, identify who your major competitors are, based on location, reputation, customer base and so on.
What products and services do they provide?
Once you have identified your major competitors, view their websites to gain an insight into their products and services. Business websites often reveal much more information than they did in the past, from company history to staff biographies.
The most effective way to gain insight into your competitors' products and services is to experience them as a customer. Visit their place of business or call to ask for copies of their marketing literature. How were you treated and did you feel like you received an adequate level of service?
You could also undertake a questionnaire on your current and potential customers. Ask if they have used competitor products and services and ask for their feedback.
How do they market their businesses?
Search for information about competitors in local press, trade publications and journals. If they have a presence in these publications it is likely they have a PR campaign as part of their strategy to raise their profile.
What other marketing methods do they use?
Monitor where they advertise, their marketing literature and their website.
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.
What prices do they charge?
It can be difficult to gain information about a competitor's pricing policy, and if a price list is not publicly available you may need to experience their service as a customer. If your prices are higher, assess what additional value your customers are receiving from you. If you cannot justify your prices, you may need to lower them; however, keep in mind that your prices may be set at the right level and the competitor may be under-pricing.
How many staff do they employ and what are the calibre and motivational levels of the staff?
You could ascertain their staffing levels from their website or by visiting their premises. Try to gauge how contented the staff seem in their roles. Also, review recruitment websites and local press, which may provide information on current roles in the business and detail salary costs.
Competitor revenue and profit levels
If any of your competitors are registered limited companies their financial information will be available through the WebCHeck service on the Companies House website www.companieshouse.co.uk.
Acting on the results
It is important to act on your findings and make changes to enhance your standing in the marketplace. Draw up a list of your findings, however small.
If you're sure your competitors are 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 or changing your suppliers.
Exploit the gaps you've identified. These may be in your competitors' product ranges or services, marketing or distribution, even the way they recruit and retain employees.
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.
Finally, ensure that you analyse the market on a regular basis to monitor changes in customer views and to identify new market entrants.
Kate Beever is a business consultant dealing with all areas of strategy, operations, market analysis, marketing and sales, and human resources advice. Trade Solutions not only offer advice, but also innovate and implement strategies if required.
kate@tradesolutions.org.uk
0161 2863001 or 0771 9803569
www.tradesolutions.org.uk
MarApr07