By Christie Kerner, Assistant Director
Center for Entrepreneurship
Let’s admit it; most of you consider your competitors as an inconvenience that you have to manage. And you’re right, competition can be pretty difficult to handle at times. However, the truth is that you will always have competition, and as entrepreneurs you have to live with this reality. So, why not change your mindset and look at the brighter side of the picture? Competitors can be good for your business and you can actually benefit and learn a great deal from them. By keeping a close tab on your competitors, you can plan your strategies in a way that helps you retain your existing customers and attract new ones. And if nothing else, having competitors tells you you’re in the right business and that there’s a market for your product.
Here are a few practical tips on how to get the most out of your competition and learn from them:
Categorize your competition
You can start by categorizing your competition. Whose business is comparable to yours? Who offers a similar products, service offerings, quality of service and price? Identify the top five or 10, as these are your direct competitors. Don’t forget businesses that offer an alternative method instead of a comparable product or service.
Research your competition
You might get some of the best business ideas from your competitors. It’s a good strategy to identify the best practices your competition uses and adopt those that make sense for your business. But, also watch for ways you can differentiate and show your unique value. This research will take some effort, but it’ll certainly pay off.
Google trends and alerts
Google Ad words, Google Alerts and Google Trends are some of the interesting tools that provide insight into your competitors’ activities. As a business owner, you can create a number of alerts to keep you informed about potential strategies that work well in your industry.
Consumer rating and feedback
To learn more about the strengths and the weaknesses of your competitors, look at the consumer rating and feedback on review sites like Yelp!, Yahoo Local, Insider Pages and Bing Local. These sites act like local directories where people share their experiences about businesses. While you’re at it, make a profile on these sites for your business, if you do not already have one. It will show you what your customers think of your business.
Use social networks to tap into the wealth of information about the activities of your competitors. Tune in to Facebook, Twitter and LinkedIn and you’ll probably come across some valuable facts. You’ll learn about the types of promotions they’re running, public sentiment about their business and events they’re attending or hosting. Social media will also tip you to their new product launches.
If your business has a physical presence, it’s likely that your competitor has a physical presence as well. Try visiting your competitor’s store. Buy things from them, get involved in their customer services, pick up their marketing material and subscribe to their newsletter. Keep an eye out for their business tactics. You might learn something you can use, or something you should completely avoid. The idea is to gather as much information as you can.
The same goes for online businesses. Nothing stops you from trying out your competitor’s product. Depending on the product or service, this might be difficult, but more often than not you can become a customer for a day and learn.
Competitive analysis is an essential aspect of running a successful business. You can learn how your competitors work and painlessly learn from their mistakes. So keep a close eye on your competition and you’ll soon see how you can stand out in the crowd.
— Christie Kerner is the assistant director of the Center for Entrepreneurship at the W. P. Carey School of Business at Arizona State University. The center fosters and empowers entrepreneurs in the classroom and across the wider ASU community.