I’m sure you know the old saying, “keep your friends close and your enemies closer”. It’s meant to describe the advantage of knowing the next move of your enemies in your personal relationships, but it can also give you an advantage in the professional world. Every business, large or small, should be carefully studying their competitors. Be a regular visitor on their websites and social media platforms, visit their establishments, carefully study their marketing campaigns (both traditional and online) and keep a close eye on new product releases to evaluate their strengths and weaknesses relative to those of your own business.
What items should you be reviewing when completing an evaluation?
- How do they receive distributions and deliver products?
- What is their hiring strategy to attract top talent?
- How do they research and innovate?
- How do they utilize IT to increase efficiencies?
- What is their financial health?
- Who are their customers?
- How do they increase customer loyalty and satisfaction?
- Do their customers seem happy with the service and products they receive?
- Have they had an influx of new customers recently?
- How do their customers feel about their brand?
- How effective is their current advertising campaign?
- What is their pricing strategy?
- How do they utilize online marketing, including social media?
- Do they have consistent messaging?
- What is their unique selling point?
Once you have evaluated these aspects of your competitors’ businesses, create a SWOT analysis of your own business that clearly defines strengths, weaknesses, opportunities, and threats for each category. According to Info Entrepreneurs, “If you’re sure your competitors are doing something better than you, you need to respond and 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, add more value” (December, 2009).
Similarly, if you identify gaps in the competitions’ operations, customer service, or marketing, you can create a strategy to uniquely position yourself to provide what they lack. These unique offerings will set you apart and provide the competitive advantage necessary to secure a bigger slice of the market share. Keeping your competitors close and continually evaluating their businesses will provide you with the information necessary to be proactive vs. reactive. It’s always easier to stay ahead than to have to get ahead once you have fallen behind.