Keeping an eye on the competition is essential to stay ahead in business. Knowing a rival's strengths will help you identify gaps in your own offer, maintain competitive pricing and keep on top of developments in your industry. Emma Allen finds out how to monitor the competition
Gathering competitor intelligence might sound like something out of a Bond film, but no small firm should underestimate the value of monitoring their business rivals, according to Suzie Shore of marketing research consultancy Juicy Info.
"Tracking others' performance will give you a critical business edge," she stresses. "What you can learn depends on the level of detail you go into, but just by looking at your competitors it's possible to track new trends, corporate positioning and diversity of products or services, right through to customer relationship management and marketing promotions.
"It's crucial to understand your sector so you can fine-tune your strategy and stay one step ahead," advises Shore. "It's even more important if you're in a particularly aggressive or fast moving business environment."
Before you get started, you need to identify your competitors. They may not just be local to you - consider those firms based abroad, or businesses that offer a substitute or similar product that potentially meets the same customer need and threatens your offer.
Keep watch, too, on products or services currently being developed that might affect your future market share.
"Start by using the internet to check out competitor websites, brochures and company material, which can give you details such as branding and pricing," suggests Shore.
To save time, consider signing up for Google Alerts, which will deliver the latest news on your competitors to you by email. Set up an alert for any topic - such as the name of your competitor's business or a certain product - to keep up to date.
Social media is another fast and effective way to learn about other businesses. "Check to see which firms have Facebook, Twitter or LinkedIn profiles and sign up to stay informed on their movements," says Shore. "If they have a lot of followers, it's a sign they have found a successful way to attract their target audience."
You should also keep up to date with key trade websites (and publications), and monitor blog discussions to find out what people are saying about your industry.
Talk to customers
Other key ways to stay informed include attending industry networking events and talking to your customers. "Get your sales teams involved too," advises Shore. "They are customer-facing and may be hearing valuable info about your competitors."
Depending on your sector, you could even consider using "mystery shopping" to measure how your customer service compares with competitors or to learn how consumers view your products over rivals.
Act on your research
"To get the most out of the information, you need to analyse the details," emphasises Shore. "Draw up a table comparing key factors such as brand, product, pricing, service and promotions between competitors, which you can update as required.
"Then, once a month or quarter, draw out the key insights from your analysis, such as the biggest threats or opportunities, and use this to develop your own strategies," she explains. "Identifying what others do well will help strengthen your offer and highlight any weaknesses."
Make friends with your competitors
It's natural to see your competitors as the enemy. In reality, though, they're not. Each business has very few real competitors. Operating in the same market does not automatically make you rivals, because it's rare that you will 'play' in exactly the same space and target the same customers. Building relationships with your competitors can be invaluable in terms of support and knowledge sharing.
Social media channels LinkedIn and Twitter provide great ways to test the water. You can't guarantee you will get a good reception, but they allow your recipient the opportunity to politely decline without either of you losing face. Just make sure you are clear on what you're trying to achieve to avoid misunderstandings.
Industry-relevant exhibitions also provide a great way to meet competitors in an informal manner. Check delegate lists in advance, so you can scour these to get an idea of who is going. Then all you need to do is drop them a quick 'be good to meet up' line via LinkedIn.
Over the course of your business life, you'll meet a number of like-minded entrepreneurs. Make sure you keep in touch. You never know - they may become invaluable at key times. These contacts can be important sounding boards for problems, lead-generation, knowledge sharing and even mentorship over time.
Don't be afraid to ask your contacts for help - they will be flattered you value their opinion. The key is making sure you have a relationship in place before you make the call.