While it’s important for you to be on top of everything that’s going on inside your company, you should also realize that what’s going on outside is just as important, if not more so.
Knowing the external factors that can affect your business is part of forming a sound strategic plan. This includes knowing your competitors.
As a small business owner, you may think that this is not something you can do at the moment. After all, going after the competition usually involves huge and expensive marketing campaigns. It can even include major rebranding. In other words, it’s something you just don’t think you have the resources for.
Keeping up with your competitors, however, doesn’t always mean you have to resort to big spending. You can keep tabs on your business rivals without using up cash by being resourceful and innovative.
To help you out, here are some simple but effective ways to keep your competition on their toes:
Know your offering inside out.
The first step towards keeping up with your competitors starts from within your own company. It may sound contrary to what was discussed in the introduction, but before you can study the competition, you have to know your business first.
After all, how can you compare them to your own company if you don’t know yours like the back of your hand?
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Start with your offerings and ask yourself:
- What are the needs or wants they meet?
- What product configurations or combinations provide your customers the best experience?
The answers to these questions will come in handy when you put them side by side with the information you find about your competitors.
You should also note the limitations of your offerings. You may find that these limitations are putting you at a disadvantage and are things you will have to address later on.
On the bright side, these limitations also give your company opportunities for improvement. Once addressed, you’ll have a better product or service.
Figure out your competitors’ value proposition.
Once you know your own business inside and out, try applying the questions you asked above to your competitors’ offerings.
Of course, you can’t expect your competitors to answer those questions for you. So, you will have to find the answers on your own.
There are a number of ways you can approach this, including:
- Checking their website–A lot of the most basic information can be found in your competitors’ website. Start here and see what kind of information is available.
- Becoming a customer–You can also become their customer and inquire about their offerings. Try to get a copy of their list of products/services including a pricelist. You can even go as far as buying or signing up for a free trial to really get to know their offering up close.
- Looking at customer feedback–Check the reputation of your competitors. Look at reviews of their company and see what customers like or dislike about them
- Researching their marketing efforts–Identify the marketing and sales efforts of your competitors. For example, find out which queries or keywords they target for their search engine optimization and pay-per-click efforts. You can also get a feel for the types of campaigns they’re running through their social media accounts. In the more traditional front, get a hold of copies of their ads in different media including print, radio, and TV.
From the information you’ve gathered, you can get a better idea of how your competitors are branding themselves, how they’re marketing and pricing their offerings, and what their unique selling points are.
You can then compare them to your own efforts to identify the differences and similarities between your companies. This way, you can properly gauge what’s working for them and see if they can be applied to your own business.
From there, you can adjust your marketing and sales efforts accordingly.
Consider new markets for your offering.
You can also look into increasing your customer base by looking into untapped markets. As discussed in a previous post, you can even look into exploring the global market.
To be clear, finding new markets is not all about expanding to new locations. It can be about considering other demographic segments like age or gender. This means that you don’t have to move or establish your business in a new city to capture a new audience.
Look into new markets that are interested in your offering and try to create marketing and sales campaigns that are targeted towards them.
There will be risks, of course, but it could be a big advantage over the competition if you are successful.
Improve and innovate both in the short and long term.
Always ask these questions:
- Based on what you know of your competitors and the industry as a whole, what small improvements and innovations would you expect to come up in the next one to three years?
- Based on what you know of your competitors and the industry as a whole, what major developments to the product or service should you and your competitors be aiming for in the long term?
Be aware of what’s going on in the industry. Know which improvements to your product actually address the immediate demands of your market.
Don’t limit yourself to addressing current limitations, though. You have to have a vision of where the industry is going in the not-so-near future. Your innovations and improvements should all be moving towards delivering that vision.
Take RingCentral for example. The company started with a cloud phone system that works as an alternative to on-premises PBX systems. While the system is effective, there were still some features customers wanted that it didn’t have at the time. RingCentral addressed these requests through continuous updates. These are the short-term improvements and innovations.
However, RingCentral is also a future-facing company. We recognized that in the long-term, customers will be looking for a single solution for all their communication needs.
So, about a decade after launch, we were able to evolve our solution from a simple alternative to on-premises PBX, to a powerful unified communications solution that meets most, if not all business communications need.
By continuously improving and being innovative in both the short and the long term, you don’t just keep up—you actually overtake your competitors.
Take care of existing customers so your competitors can’t steal them.
You don’t want your competitors getting their hands on your patrons. The best way to do this is to take care of your existing customers.
Sounds simple enough. But a lot of businesses, even some enterprises, fail at this. Why? Because a lot of businesses tend to put most of their resources into customer acquisition and not enough into customer retention.
As a business owner, you might want to check your churn metrics. You might not be noticing it, but you could be losing more customers than you are gaining.
That is why it’s important to pay attention to the whole customer experience and not focus solely on acquisition.
This includes providing great customer service, continuous product improvement, and making sure that your current customers stay engaged.
Remember, the more customers you keep, the fewer customers are out there for your competitors.
It pays to take care of all your customers, both new and old.
These are just some of the simple things you can do to keep up with your competitors. As you can see, it’s not about who can spend the most. It’s more to do with who has the right information, the right strategy, and the right execution.
If you have those, you are not only going to keep up, but actually stay ahead of the competition.