Amongst the key steps that you must take when starting a business, one of the most crucial, and yet so often overlooked, is researching your competitors.
It is quite strange that entrepreneurs often neglect this activity, because not only does it have the potential to enlighten them and fill them with inspiration, but it can be darn right fun as well.
Before beginning to research your potential competitors, it is wise to draw up a plan of action, and top of the list is identifying the purpose of the research that you will carry out and the kinds of information that you will hope to gather.
What information should you be gathering?
During the formative stages of your enterprise, it is wise to acknowledge your own ignorance of the industry in which you are hoping to work. Your research can be used as a way of gaining a better understanding of not only your competitors but the marketplace as a whole.
The main piece of advice to bear in mind at this stage is that your competitor research must not be restricted to only the most superficial of concerns ‘money’.
Yes, ascertaining the pricing structure of your competitors is an essential part of your research, but you must always remember that this does not live in isolation, it is informed by a very wide range of factors, and in order to get a good understanding of a competitor's business model, you must consider all of these aspects as a single entity.
As a rule, some of the things that you should be looking out for at this stage in the game include;
The range of goods / services that they provide
The spaces in which they operate; physical store, website, e-store, social media etc
The level of interaction that they have with their customers
The ecommerce software / solutions that they use
The level of staffing that they have
The timeframes in which they operate
Their reaction time to customer / client queries
Special deals and promotions that they have
Who their main demographic is
Who their target market is, or which demographic they would like to encourage more business from
Where they advertise
Any sources of revenue which are not immediately obvious
What, if anything, their customers want from them that they do not provide.
Think of these points as the objectives of your research; to find out as much about your competitor's business operation as you possibly can. Only once you have achieved this will you be able to press forward with the development of your own enterprise, in full possession of the facts about those you are hoping to take on!
But the burning question still remains; how can you find out all of this information?
Of course the tactics that you employ will vary greatly depending on the industry that your competitors operate within, but generally speaking there are a few ways and means that will come in useful regardless of this.
Here are a few basic ways to research and investigate your business competitors:
Begin with a Google search -You will be quite amazed just how much information you can reveal about your competitors with nothing more a well worded search query. For one, you will be quite easily able to ascertain the state of their digital marketing, and identify the extent of their search engine optimization. A little more digging will quickly reveal the extent of their online presence and help you to answer many of the above questions.
As well as all of this, in a far more private investigator-style move you will also be able to dig a little deeper into the financial status of the business by using a company director search platform. These are websites that give you immediate access to some of the publicly available information about the company that you are researching, but will also reveal the structure of the business including who the directors are, and their past enterprises. Some of the key facts that you will have instant access to include; total assets, cash holdings, net worth, and liabilities. Most of the information you will want will be free to access so think carefully before agreeing to any premium service.
Whether any of this publicly available information is of any real value to you remains to be seen, but knowing such intimate details about the competition, must surely be a good thing.
The covert customer - One of the best ways to get a feel for a competitor is to play a little game called ‘The Covert Customer’...see I told you this would be fun!
As you have probably guessed this involves masquerading as a perfectly regular, everyday customer, and using this covert position to ascertain as much information about the business as possible. The list of details that you might be able to gather really is endless, but as with most things a little planning can really help you to make the most of the experience. You need to think about the kinds of things that becoming a ‘covert customer’ will allow you to find out, and devise ways that you can deliver on this potential. As a general rule, the more contact that you can encourage between yourself and the business the better, as this will open up opportunities for key details to be revealed.
The key things that you should be aiming to uncover are;
The ease of purchase / the particular processes that they use, and the benefits / limitations of these
The style and manner of the customer service
The promptness of goods / services delivery
Social Media- So many businesses use social media as a major tool for marketing and engaging with customers that you can quite often learn a great deal about the culture of your competitors though a little snooping on their social media accounts. Be sure to check as many platforms as you can, not just the most obvious ones. Facebook, Twitter, Instagram, and Pinterest are a good place to start.
You should think about trying to answer questions like;
Which social media platforms do they use and why?
Are there any platforms which they do not use? Might there be a logical reason for this, or are they missing a trick?
Can you utilise social media more effectively than they are?
What is the makeup of their following, and what does this say about their business?
What do people say about them on social media? This can be revealed through using the basic search function available on most platforms.
To give yourself a constant source of updates from your competitors, sign up for their newsletter if they have one.
Just Ask! - Sometimes the simplest solutions are the best and this certainly falls into that category. Most people don't overlook the value of simply asking for other people's opinion on a business, and thanks to the internet, achieving this has never been more likely.
If you are already trading, your current customers could prove a very valuable source of information on your competitors, particularly if they are former customers of theirs. Try to discover what they did and didn't like about them, as well as what you can do to improve.
Just be careful when approaching anyone for this purpose, you need to avoid coming across as glib or opportunistic. As always, tact and consideration will serve you well.
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