Researching your competitors is one of the most valuable things a small business can do. To succeed in business, you must be able to create products that fit market needs. This is borderline impossible to do without understanding what else your customers might be looking at. That’s why we’re going to teach you how to research your competitors.
With this in mind, we are going to talk about 15 specific ways you can research your competitors and grow your small business.
If you’ve been following along with our blog for the last few weeks, you know we’ve been talking about market research a lot lately.
- A Crash Course in Market Research for Your Small Business
- 14 Cheap Ways to Do Market Research for Your Small Business
- 23 Excellent Questions to Ask Your Customers
- 15 Ways to Use Market Research to Grow Your Small Business
You get the idea.
In all of these articles, we hinted at the importance of researching your competition. However, we stopped short of telling you how to do it. That changes today.
Why Research Your Competitors Anyway?
But first, let’s talk about why specifically it is a good idea to research your competition. We can think of five specific reasons, most of which are well-articulated in this article by Inc.
1. Before you can do anything else effectively in small business, you must understand your market, your customers, and their needs. Therefore, researching your competitors is important for two reasons. First, you can see which needs your customers are paying to have met. Second, you can find out where your competition is failing to meet the underlying needs of a certain subset of customers, therefore helping you find your niche.
2. When you understand your competition, it helps you gain a sense of which needs are being met and which needs are being unmet. This helps you estimate potential market growth and changes in demand. In short, you can make an educated guess as to the market’s potential.
3. You need to understand what your competitors are offering and what they’re charing. Enough said.
4. This gives you a chance to figure out what you can do better.
5. One of the best sources of new customers is directly from the competition. They’re already paying for a product or service that you want to sell, so you only really have to convince them to go with you.
1. Identify your competition.
Before you can perform a good competitive analysis, you need to identify your competition. This article suggests that you pick your top 10 competitors, which is a recommendation we endorse. It’s a good place to start and you can always monitor more if you need to.
At a minimum, you need to identify the ten biggest players in your industry. If available, use public profit and revenue figures to figure out company size. If all those figures are hidden, see who pops up highest in the Google search results and also see who has the most likes on Facebook. Neither of these methods is perfect, but it’s a lot better than nothing.
Make sure you also keep a separate list of new entrants to the industry. This is especially relevant if you are just entering the industry. If you are starting a small flower shop, other local upstart flower shops are going to be a much better proxy for your business model than, say, Teleflora.
If you work in a market where different products or services can be used as a substitute for what you provide, don’t forget to monitor them as well.
2. Research your competitors’ strengths and weaknesses.
Take a moment to review our SWOT analysis post. A SWOT analysis is nothing more than a simple abbreviation for Strengths, Weaknesses, Opportunities, and Threats. Take a moment to identify all four of those qualities in each of the competitors who you have chosen to research.
3. Identify key brand differentiators.
We’ve talked about the importance of finding a niche in business. Otherwise, your business will be forgotten because people don’t have anything to remember it by. This is true for your competition, too, so make sure you go out of your way to identify what each brand considers to be their differentiating quality.
Not sure where to start? Open up their website. Look for headlines, slogans, and prominent text. Oftentimes, the competitor will outright say what they believe their differentiating quality is in an attempt to gain customers of their own!
4. Analyze the failures of your competition.
When you see a company changing their marketing strategy after a short amount of time, that’s a good indicator that their previous strategy did not work. Keep an eye out for behavior like this, because it indicates that your competition has failed in some way. You should be careful to avoid repeating their mistakes. If you’re especially wise about how you market your brand, you may even be able to use their mistakes to your advantage.
5. Shop from your competitors.
Even though it means putting money in your comeptitors’ pocket, the benefits cannot be denied. You learn a lot about your competition by merit of being a customer. It’s not just us advocating this method, either. We initially found this tip in this article.
6. Read, watch, or listen to their content marketing.
What a company chooses to create for content marketing will tell you a lot. Many companies have a blog, and a lot of them also have podcasts or YouTube channels these days. That means there is a wealth of information about your competition that is readily available. Consume some of it and see what you can learn about them!
7. Review our marketing research methods and use them to research your competitors.
We shared links to our marketing research articles above, but we’ll do again here for your convenience.
- A Crash Course in Market Research for Your Small Business
- 14 Cheap Ways to Do Market Research for Your Small Business
- 23 Excellent Questions to Ask Your Customers
- 15 Ways to Use Market Research to Grow Your Small Business
Basically any kind of market research you can do to grow your own business, you can do the same to investigate your competition. After all, market research often comes down to asking good questions, so you can tweak the wording to ask about your competition.
8. Google them and see what comes up.
Google has put an enormous amount of time, money, and thought into curating the most relevant websites for any query you can imagine. Trust their intuition. Google your competitors and see what comes up. Do you see glowing testimonials or bad news? Do you content marketing or a social media presence?
9. Follow them on social media.
Most brands have social media accounts. Follow them. Not only can you see the essence of their brand distilled for channels where customers consume bite-sized bits of information. You can also their advertising campaigns. In many cases, you can also search their mentions and see if they are conducting customer service functions through social media as well.
10. Research their sales tactics.
Two of the biggest problems for brand new businesses is generating leads and getting leads to buy. You can learn a lot about how to find people to sell to and how to close sales by watching your competition.
Using Hubspot’s article as a reference, try to answer the following questions about your competition’s sales tactics:
- What does their sales process look like?
- Where are they selling?
- What are their customers reasons for buying or not buying?
- Do they regularly discount their products or services?
- What are their revenues?
11. Watch their ads.
When you stumble across one of your competitors’ advertisements on social media or TV, don’t just ignore it. Pay attention and see what the advertisement says. You may be able to learn from that and do better.
12. Check out their career sites and sites like Glassdoor and Indeed.
Nothing can spell problems for companies quite like disgruntled employees. Even though your goal is to win customers and not employees, thoughtful negative commentary by employees on Glassdoor and Indeed can often serve as the canary in the coal mine for much bigger problems. Ignore these sites at your peril!
13. Read their reviews on Trustpilot, Google Reviews, and Yelp.
At the risk of seeming too obvious, if you want to know what customers think of your competition, read the reviews! Oftentimes, you can figure out unmet needs just by seeing what customers have to say. Many companies have bad customer service, high prices, or take forever to complete their work or ship their products. Knowing this information – which often comes straight from customers – is beneficial.
What’s more, you should also read positive reviews of your competition. Oftentimes, customers love brands for different reasons than what brands think.
14. Figure out their pricing strategies.
Pricing strategies can become very complicated very quickly. However, at a minimum, you need to take the time to figure out how much your competition is charging. Don’t just pay attention to the numbers themselves so that you can position your product for a dollar cheaper. No, pay attention to whether your competition is trying to lead on price or make money by selling a better product at a higher price.
15. Set up Google Alerts to monitor your competition.
Google Alerts is a free way to receive daily or weekly digests containing a list of news headlines for relative keywords. To monitor your competition, simply set up an alert for each competitor you want to monitor. Then you will see what kind of press coverage they are receiving.
This technique could not be simpler. It’s a good way to passively monitor competition once you have identified it.
Final Thoughts
By taking the time to study your competition, you can better understand your customers’ needs and how you can serve them. You can also find a niche by figuring out what your competition is not already doing well. Taking some time to do your homework will help you to create products and services that
