Businesses need to spend more time watching their backs and looking at what their competitors are up to, according to market research expert Stephen Phillips
Knowing what your competitors are doing is an important part of running a successful business. But it's an area that many companies ignore. That's not a good idea in today's difficult market conditions when your rivals could well be keeping their eyes on you and planning how to steal a share of your business.
"Competitor intelligence is something few firms do well, whether big or small. People tend not to do it," says Stephen Phillips, who has the delightful title of chief happiness officer at market research agency Tonic. "But there are some very simple things you can do to find out about your competitors."
A lot of valuable intelligence can be gathered without leaving your desk. "First of all, you can visit their website and see how and where they are positioned. Order their brochure," says Phillips. "Just googling their name brings up all sorts of things, including blogs by disgruntled staff or customers as well as positive feedback."
If a company is stock market listed, you can get huge amounts of information on the company, says Phillips. "Any listed company will have an investor relations section on their website where they will present their strategy and talk about what they're planning to do in the next few years, including new products and new markets they are entering."
If you and your competitors sell goods through third-party retailers, you need to check out their distribution strategy, advises Phillips. "Look and see where they distribute. If they are in Tesco and Sainsbury but not Waitrose you can see where the opportunities are."
The best source of information about your competitors is likely to be your customers. Talk to them about their perceptions of your business and others in the same area or sector. You could even do some mystery shopping and send a friend along to your competitor's shop or give them a call to see what they offer and how they handle customers. Although you may need to make several visits to form and accurate picture.
As consumers are increasingly shopping around for a bargain, price is becoming a big issue and it's vital to know what your competitors are offering in terms of discounts. "Price is more of a justification for purchase than ever before," says Phillips. "So you have to keep an eye on your competitors at all times to see what offers and deals they are doing."
Competitor analysis can throw up some interesting findings. You may find that your competitors are not who you thought they were, says Phillips. "When you start looking at competitors, you often find who you think are your competitors are not actually your main competitors," he says.
"For example, if you have a tile shop on a local high street then you might think your main rival is the other independent tile shop up the road. But actually, you are both probably competing with big out-of-town retailers as well as with online tile suppliers. In fact, having more than one type of supplier in the same area can help to bring more business your way as consumers feel they can get enough choice locally."
In fact, your competitors could be even more varied than you think. When consumers are making difficult choices about how to tighten their belts, you may be competing with totally different products or services for their spare cash. "Take a young man who wants a new pair of trainers," says Phillips. "This young man is thinking of buying a pair of Nike trainers. Now, he won't change his mind and buy a different brand name, but he may well decide to spend the money on a night out or a pair of headphones instead."
Staying ahead of the competition is not easy but there's no point in burying your head in the sand. When it comes to your rivals, knowledge is power.
Written with expert input from Stephen Phillips of Tonic.