Growth is one of the main (if not the main one) objective of most companies or businesses. However, we should spare no effort to protect what is already ours and look very closely what our neighbours are currently doing. Regardless if the growth of our business is our highest priority, we would do well to not neglect our backs and devote some of our energies on defending what has cost us so much to achieve. The problem here is that in most cases we do not see the need to defend until it's too late. Defend yourself from an apparently nonexistent threat is complicated, many would dare to say that it is even unnecessary. But as everybody knows, "prevention is better than cure". So, let's be forewarned.
The first thing we should do is get to know our competitors. Find out what are their strengths and weaknesses, get a deeper insight of their offer and try to predict what are going to be their next moves or strategies. Knowing what our competition is doing at any time will help us to stay one step ahead of them and have controlled their movements, avoiding being vulnerable to threats that would otherwise be unpredictable. We could start studying the product of our competitors, which by itself is a wide source of information that must be analyzed in depth:
- Product: What are the advantages of their product compared to ours? What are they doing better than us? And worse?
- Price: At what price are they selling their product? Are they positioned as an economic product? Or do they have a more Premium / unique positioning?
- Promotion: How are they promoting their products? How they publicize their products? Which channels are they using? How much are they investing in advertising? What messages do they communicate?
- Place: Where do they sell their products? How do they market their products?
I still remember how at one of my first jobs in one of the most popular spanish pizza restaurants back then my boss sent one of our distributors in a street clothes to buy a pizza to one of our main competitors restaurant. When he returned, besides bringing the product of our competitors with him (which was subjected to a top analysis from almost all of our employees), provided us with valuable information about what our neighbours were doing two streets away from us: number of orders they had attended so far (order number was contained in the ticket he brought along with the pizza), promotions of the day, offer of new products and number of employees at this moment and number of distributors for saying some. Just a quick visit to our competitors store/restaurant/office can give us a vast amount of information that could take us to some quick but not less important conclusions.
There are multiple sources from where we can also obtain free useful information. Creativity plays here an important role and will help us to find new and different sources of information. I’m just going across of three of them, probably the more basics:
- Financial statements: Monitor the financial statements of our competitors, see how they are performing and calculate their profit margins and its evolution over the years.
- Job offerings: Keep under control the job offerings of your main competitors will give you an idea of what kind of people they are hiring. This would help us to get a picture of their internal movements and will help up to predict which could be their next steps.
- Web: Internet is an inexhaustible source of information that we should not overlook. If our competitors have blog or are present in social networks, it is important to analyze what are they communicating and the way they are doing it.
Another essential source of useful information is market research. Market Research is a powerful tool that can help us when taking decisions. Quantitative and qualitative research can provide us with relevant and actionable insights. A simple concept test, for example, could through some light when we are designing a new product and we do not want to take the risk of lunching it directly to the real market. Product testing is also a great way of analyzing our own products and compare them with the products of our competitors. The list of different methodologies is large and we could pick one or another technique depending in our needs.
Once the research is been done, we will have at our disposition an extensive data set with all the answers to the questions that we have previously designed. In order to get a better picture of the market situation or a better understanding of our customer behavior, we could cross all those answers by demographic variables such as age, gender or region. Or we could run segmentation through all the data base to get a deeper knowledge of the differences between different segments of the analyzed universe.
There are many and different sources of useful information to our business and some of them are free and some others no. Either if we pay for it or we do not, the way we will use that information will set the difference between our company and our competitors.