How is your competitive intelligence? 29th May 2012
Generally speaking, market research is the weakest area in any business plan, and researching competitor activities is an important part of this. Failure to know enough about your competitors, and to be able to compete effectively in your chosen market sector, is ultimately going to contribute to the failure of your new business.
So why does this happen? Why do so many new business owners not bother to keep tabs on their competitors’ prices, products, USPs, marketing tactics, special promotions, staff capability and so on? Well, it’s probably not that they don’t want to do this, it’s just that they don’t know how to, think they can’t afford to, or think they haven’t got the time to do it.
The problem with carrying out competitive intelligence for a new start up or existing small business is that it’s time consuming and doesn’t appear to deliver any immediate results, or any information quickly enough for you to act upon.
But the reality is that this is a really important part of your business activity. It is a rare enterprise that has the luxury of no competitors, and even then this will be short-lived. Every small business will have competition either locally or further afield, or internationally in the case of many online traders.
For a locally operating enterprise, you must keep a close eye on direct and indirect competition in your area, continually looking for ways to differentiate yourself. This might be in terms of opening hours, customer service levels, more frequent advertising, or finding a competitive edge through special offers, promotions and bonuses. Although competing on price is important, and often essential, it is usually a far more profitable strategy to try and find ways to compete on service, quality and the real or perceived value you can offer your customers that your rivals can’t match.
Can you describe what your competitive advantage is at the moment? Probably not, we’ll guess, although you are certainly not alone in this.
Local competitive intelligence should be easy enough for the majority of smaller enterprises to do. However, nationwide competitive research will, at first, appear to be a little bit more daunting.
But the fact is that every small business can do this effectively and on a shoestring budget as well. And as a result they can ensure that they not only compete with but also get a real edge over their rivals no matter where they are located or how big they are.
A great way to start doing this is through some online research and networking in the right places. You might also want to try mystery shopping with your competitors, but be wary of the legal situation and ensure you don’t lie about who you are.
Attending trade exhibitions, particularly the biggest national events in your sector, is another effective way of gathering competitive intelligence for your industry.
Your online research into competitor activity could start by using Google or any of the other major search engines. As well as just searching on your competitors’ business names, it’s also extremely worthwhile typing link: www.nameofyourcompetitor.com or .co.uk into the search box. This will give you a list of all the websites that link to your competitors’ sites, and is an excellent way of finding out which firms are interested in them or doing business with them already.
You could also broaden your research by looking at something like www.marketresearch.com, which links you to over 400,000 publications from hundreds of leading research firms. They also provide a free e-mail alert service covering new research, developments and trends in your industry.
You can also analyse how your competitors’ websites compare against your own and those of other firms in your sector, and see where else visitors to your site go to for similar information or a similar service, by using the excellent research tools available on www.alexa.com. This is a must-visit site for any competitive research.
Apart from using the Internet to find out what your competitors are up to and what is going on in your industry, the other main way to do this type of research is by talking to people. This involves asking other people about what they know or can find out about your competitors. You should include your friends, family and employees in this – they can help you by becoming the eyes and ears of your business.
The other obvious place to research your industry is by joining a relevant trade or professional association, which will have a list of other members who are suppliers in your sector. Go to www.taforum.org or www.britishservices.co.uk/associations.htm to find the website of the trade association for your sector.
Leave no stone unturned when you hunt for information about your competitors, as your objective should be to try and keep yourself at least one step ahead of everyone else.
And why not talk to your competitors directly on a totally up front basis, as there may be mutual opportunities for collaboration and joint marketing. You’ll probably be pleasantly surprised at how many people will not see you as a threat and are quite willing to talk about opportunities. There’s no better way than this to find out what the key players in your sector are up to.