In today’s online world, roughly 9 out of every 10 new businesses will fail. Part of this is due to not having researched what really matters ahead of time.
There’s a great deal to focus on when you’re trying to grow your business and make it profitable. One area that new business owners all too often miss is researching their competitors. This is a small part of the research that our Million Dollar Marketer program teaches before starting a business, but it can make a significant difference in the effectiveness of your marketing. In fact, competitive research should be a critical factor in almost all your business and marketing decisions from the very start. Do you know what your competition is up to? You should, and here’s why:
– How do you know what’s unique about your business if you don’t know what your competitors are doing? You may be offering the same or similar products to the same or similar people and in the same or similar way. This is definitely not a good thing for any business. You need to uniquely fulfill the needs of your market in a way that no one else is currently doing it.
What if you have a great idea for an ad but your competitors have already run one like it? Simply knowing what your competitors are doing is a good way to make sure you don’t do something that’s already been done. A number of forehead smacking moments can be avoided. And you might even find out that what they’ve done didn’t even work!
You may have an intuitive sense of your business’s strengths and weaknesses. But you can never truly know unless you compare these strengths and weaknesses to those of others. You can truly understand what position your business occupies in the market. Through comparison with your competitors, you can understand which natural strengths you can play to for an advantage, as well as which areas need improvement.
If you know what your competition is (and isn’t) doing, you can find gaps where they’re not meeting the needs of the market. These gaps present perfect opportunities for you to fulfill a need. For example, there may be one segment of your market that your competitors ignore. You can dominate this segment.
This means to learn from your competitors’ mistakes and borrow what works. You can watch your competitors and take note of their successes and failures, analyzing these successes and failures for wisdom you can use for your own business. For example, if a competitor’s new product bombs, you can discover why and perhaps improve upon it. If they ran an ad for only a brief period of time and then stopped, it’s probably an indicator that the ad or the location didn’t pay off.
All marketers know there is more than just one way to keep an eye on the competition. Here’s a four-step process that Million Dollar Marketer teaches for gathering as much information as possible on your competition, analyzing this data and then comparing it to your own business so that you can make the appropriate changes.
Below, we’ll take a look at each of these steps briefly:
The first step is to identify your competitors and gather as much information about each one as possible. Start with other businesses that are currently offering the same or similar products or services as you. These are the organizations you’re most likely to be in direct competition with, since customers must choose between them and you for the same or similar product.
Now, add organizations that could offer the same or similar products or services in the future. If you have a studio that offers piano lessons and there’s a new musical instrument store in the neighborhood, this is a potential future competitor because they may begin offering lessons as well. It’s important to always keep your eyes open and plan ahead for businesses that could turn into direct competition for you.
Start by doing an internet search using keywords related to your business using the free and paid tools we’ll discuss in a moment. You can use the main product or service that you offer, or the name of your industry or type of business. If you’re chiefly a local business, look for business located near you by adding geographic terms like “Maryland,” “North Carolina coast” or perhaps even the name of your city. Social media is also a great research tool for finding competitors. You can conduct keyword searches on social media just as you would with a search engine. You can also look at your customers’ and connections’ profiles to see what other similar businesses they like or interact with.
Once you’ve identified who your competitors are, you need to start gathering information about them. A good place to start is the company’s own website. You’ll find a wealth of information there on what they offer, their vision, how they position themselves and so on.
The best way to learn about your competition is to become their customer. Visit their physical location if they have one. Actually buy their product or service and use it. While using it, try to understand what’s good and what’s not so good about it.
The same goes for their service. For example, if they immediately try to upsell you on a higher ticket item and you find it annoying, this is the kind of information that’s good to know. You can gain a competitive advantage by easing up on the sales talk. Or you may find that you’re missing a great income booster that would benefit your customers.
In addition to the company’s website, try to gather whatever marketing materials you can from them. I always recommend signing up for their newsletters or other freebies for purposes of analysis. Sometimes by doing this, I may learn something that I didn’t know before, while other times, I may find that I dislike their approach on something. Either way, I learn something useful.
One of the best and easiest points of contact is social media. Follow your competition on social media and pay attention particularly to how they interact with their followers. For example, if someone has a comment or question, how quickly do they respond? Do they respond the way you would have, and if not, why?
You can never know too much about your competitors. Nearly anything you can learn about them can prove valuable. But here are some specific things to start with:
So far, we’ve talked about researching your competitors. In addition, it’s really important to get to know your competitors’ customers. This is where you’ll learn a wealth of information you can use to position yourself in the market.
As best you can, make a customer profile or persona for your competitor’s target customer. Try to include as much demographic data as possible, such as age, gender, economic status, location, and other applicable information. Include in your profile where the customer hangs out online. In other words, what websites do they frequent, what social media do they use, what blogs do they read, and so on.
Pay especially close attention to information on how your competitor’s customer feels about them. What does the customer like or dislike about the business? See if there are any complaints that keep popping up from customers, or areas where customers would like to see improvements. These are excellent opportunities for you to offer that improvement.
If you’re following your competition on social media, you’ll learn a great deal about their customers (along with reading review sites). Pay particular attention to your competitors’ most vocal supporters on social media. These are the individuals who engage and interact the most with the business. You should identify these individuals and follow them as well, as there is a great deal you can learn from them.
Another way to keep tabs on popular opinion about your competition is to sign up for alerts using your competitors’ names. Google Alerts is one way to do this. With Google Alerts, you sign up to receive alerts for certain keywords that you choose. Whenever someone posts new content using the keyword, you get an email alerting you. You can use your competitor’s name or product name with Google Alerts and get notified in real-time whenever someone says something about it. There is also other software that will scour social media sites as well.
Now, it’s time to take all of the information you’ve gathered about your competition and its customers and analyze it. You’ll be focusing mostly on the strengths and weaknesses of your competition.
For each of your competitors, create a detailed profile. Take all of the information you’ve gathered, then organize and summarize it so that you can understand your competitor’s strengths, weaknesses, market position, and other qualities at a glance.
Your competitor’s profile should include as much as possible of the following:
Try to find that one thing that gives your competitor a unique place in the market. This is the company’s unique value proposition. It explains how a company meets its customer’s needs differently from others.
A business summary describes concisely what your competitor does or their main business. It should include the length of time they’ve been around, and key company or corporate data.
While the business summary includes hard facts, this area of information is more psychological. It describes your competitor’s goal or company vision. This includes its brand image and the culture it conveys. For example, a moving company that caters to young people moving after graduating college. That company’s vision is that with all you have to do upon graduating college, moving should be easy.
You may choose to make a list of features and benefits for your competitor’s main product or a few of their signature products. These short profiles would include things like features, problems the product solves, price or price range, where and how products are sold, sales volume, target customer, and so on.
Your competitor’s marketing profile includes information on how they market their products or services. This should include external factors like the number of players in the market or competitors they face, trends in their market, and market size. It should also include internal data, such as percentage of market share and what kinds of marketing strategies they employ.
Your profile should include online marketing factors such as website traffic, website ranking, on-page SEO, SEO keywords, and SEO strategy in terms of things like backlinking, and social media activity. It’s not always possible to obtain this data, but you can use tools like Alexa or ComScore to get a good idea. You can also obtain very broad data by doing things like seeing how many social media followers they have or searching for their product or service on Google and seeing where they appear on search result pages.
Now it’s time to take the data you’ve gathered about your competitor and their place in the market and compare it to your own company. Make an objective analysis of your company using the above techniques. It’s important to be as honest as possible with yourself and to list every factor completely.
Once you’re done with your analysis, review all your answers. You should start to see some trends and some obvious places where you can stand out and compete.
Although you should continually watch your competitors and analyze their activities, don’t become too engrossed in what they’re doing. Remember that the overall goal of this activity is to identify your natural strengths so that you can play to them and uniquely meet the market’s needs where your competitor isn’t. This is just a way to discover valuable data that, like other types of data, you can use to improve your marketing.
Knowing your competitors helps you know your own business better. You can better understand why your customers choose you over the competitors and how you can further appeal to those customers whose needs your products meet.
These are just a few ideas we have for researching your competition. If you want to learn more about market research, product idea research, and competitive research, consider our Million Dollar Marketer program linked below.
Margery Hinman, Ph.D., is founder of Million Dollar Marketer, a membership program combining a collection of online tutorial, resources, and strategies for the rising online entrepreneur. Our Market Research course is just one of 20 different digital marketing courses that can help you achieve your online goals for 2017 and help you on your way to a great income in your own online business. Visit us today! https://www.MillionDollarMarketer.org
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