Is your business one-of-a-kind? Do you offer products or services that no one else does? Unfortunately, most business owners have to answer those questions with a “no.” While your products and services may not stand out on their own, your business can! The first step to gaining a competitive advantage in the business world is identifying and understanding your competitors.
Why do I need to know my competition?
Knowing your competition will help you:
- Show how your business is different.
- Understand your specific market.
- Cater better to your target audiences.
- Avoid blending in.
- Maximize your advantages.
How do I find my competition?
Every business faces competition whether you think so or not. Finding your competition can be done easily through:
- Local business directories
- Talking with your customers
- Searching the internet for similar products or services
- Press reports
- Social Media
What do I need to know about my competition?
Knowing the way your competitors do business, whether effective or not, can help you determine strategies you can use (or shouldn’t use) with your own business. When scoping out your competition look for:
- Their strengths and weaknesses.
- Effectiveness of their marketing/ advertising strategy if available (engagement on social media).
- How much they charge for their product/service.
- The strategies they use to keep loyal customers (customer service).
- What audiences they target.
- Whether they incorporate innovative products, services, or methods to enhance their business opportunities.
- The results of their annual reports (public businesses only).
Types of Competitors
Businesses that offer the same or similar products or services are direct competitors. When customers are deciding which company to do business with, they’ll consider a number of things such as: price, location, customer service, or their own loyalty. 91% of consumers also read online reviews before making a purchase. Striving to do better than your direct competitors is challenging but so important to the success of your business.
Businesses offering slightly different products or services, but targeting the same audiences are indirect competitors, or substitutes. An example of indirect competitors are restaurants. When you’re hungry, you might choose between the options of pizza, burgers, salads, or Mexican food. While these options are very different, they would all satisfy your hunger and are, therefore, in competition with each other at that time.
To win against indirect competition, consider all the ways you can satisfy your customers’ needs and implement a strategy to do so as best you can. Merging Taco Bell and KFC was one great example of overcoming indirect competition.
New entrants are new competitors in your industry that could be direct or indirect. New entrants pose a threat to current businesses because of consumers’ cravings for innovation. New entrants are likely to gain customers with no loyalty elsewhere, and they tend to rapidly populate industries where low initial investment is required.
Create barriers against new entrants by creating brand loyalty, owning exclusive rights to distribution of some products, and regularly innovating to keep up with new products, services, and marketing strategies.
How do I act on this information?
Once you’ve gained insight into what and how your competitors are doing, act on it! If they’re doing something better than you, make adjustments to your current practices by changing marketing strategies, pricing, or another aspect of your business. However, the goal here is to innovate, not imitate. You want to be better than them, not the same.
If your competition is not doing something well, learn from their mistakes. Provide unbeatable customer service, fill in the gaps in their strategies, and improve your own strengths where they haven’t. All information you get from your competitors is valuable.
To implement a successful marketing strategy against your competitors, contact Lawrence Media Group. Upon our initial conversations, we always gain insight on your competitors, gain all information listed above, and implement a strategy to put your business at the top.
If you’re interested in our creative marketing services, contact us today at 678-428-7777 or email us at email@example.com. Our professional staff will be happy to answer any questions you have and develop a plan to help your business grow!
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