If you’re planning to launch your own online business, you need to think about your competition. The fact of the matter is that it will be nearly impossible to generate enough sales to make your business profitable if you don’t have a healthy amount of customers or clients. And in order to have a lot of customers or clients, you need to be able to differentiate yourself from your competitors in some way and offer something different than what they offer. So as you can see, doing research on your competitors and trying to understand their tactics and strategies can be very useful when it comes to growing your own business.
Start With Your Competitor List
No matter what you’re selling, it’s likely that your product or service can be put in competition with a similar product. For example, if you run a bakery, you are in competition with other bakeries. The first step is figuring out who your competitors are by creating a short list of all existing businesses that may compete for customers within your business’ core focus. Here is where competitive research comes into play.
As a business owner, it’s important that you understand your competitive landscape. What are your competitors doing? How do they operate? What is their marketing strategy? Once you understand their tactics, you can implement them in your own business or develop a way to better position yourself against them. Fortunately, there are numerous tools available for free that can help you gather data about your competitors and other companies in your industry.
Create Tables and Charts from the Data
It’s easy to get overwhelmed by all of your data once you start gathering it. In fact, research has shown that businesses who analyze their competitor information experience a higher rate of success. Create tables and charts from your data so you can easily visualize what you’re looking at. This way, you can spot trends, compare companies against each other and come up with effective strategies for boosting your business.
Prioritize What Matters
Competitive analysis can help you determine where your company should focus its resources, so it’s important to take it seriously. Review your competitors’ websites for what they do well and how they can improve, and be sure to look at all elements of their online presence—blog posts, social media presence, quality of website design. If you own a brick-and-mortar business, compare yourself with local competitors in terms of pricing and service as well.
Set Up a Process for Reviewing New Information
Without a system in place, you’ll be less likely to stay on top of relevant news and business developments that could help or hurt your company. To keep yourself informed, start by following industry leaders on social media. Set up Google Alerts for important keywords related to your business (you can also set these alerts up for individual competitors). If you don’t use Twitter, check out TweetDeck for real-time monitoring and engaging with influential people in your industry.
Review, Update, Repeat
Competitive analysis involves looking at your competitors’ strategies and seeing what’s working for them, then applying their good ideas to your business model. But reviewing and repeating only part of a competitor’s strategy won’t work—you need to see it in its entirety. Try using competitive analysis for all aspects of your business, including pricing, operations, product line, distribution channels and branding.