There is an entire line of professionals dedicated to tracking the competition for Fortune 500 companies and many organizations have departments dedicated to watching every move of other companies in their industries. But that doesn’t mean monitoring the competition is too expensive or time consuming for small companies. It is an essential part of a solid business plan that will improve your operations, customer service and marketing. And because of all the tools available, there is really no excuse for not monitoring your competition.
- Define your business’s goals and strategies. When you know where you stand in the marketplace and where you would like to go (e.g., we want to be the number one choice among small retailers in Elgin, Illinois for tax preparation services), the difference between you and the other players will become clearer.
- Determine who should be followed. Beyond the traditional, direct competitors, you should think broadly to avoid being surprised by new entrants or disruptive market forces. For example, there might be three other local coffee shops. But what if the supermarket down the street opens a coffee kiosk people can visit for a treat while running in for dinner ingredients after work? What if a new line of espresso makers is offered at discount prices and your $5 lattes seem cost-prohibitive? Anticipate what could change and impact your bottom line.
- Analyze important information. You should determine four things about your competitors: 1) goals (usually in terms of revenue or profits), 2) management assumptions about the market, 3) strategies and tactics in use and 4) capabilities to reach objectives.
- Focus on a reasonable number. It is not productive to watch scores of competitors or you could be distracted from enhancing your own company’s edge.
- Formalize the review. Decide who will monitor the competition, the process, the repository that will be used for information and the frequency of reviews. Quarterly or monthly reviews are advisable but if you only do this annually, you could miss critical developments.
Sources of Intelligence
1. Sign up for news alerts. Google Alerts are helpful, easy to set up and free. For smaller, local businesses, you might also want to sign up with local newspapers for notifications.
2. Review websites. Fagan Finder will tell you about other sites linking to your competitors’, which can reveal alliances, networks, suppliers and customers. WatchThatPage.com will tell you when specific pages are changed so you can hear about new products, changing messaging, new target markets, personnel changes and more. Investigate the directories in which competitors are listed make sure you also listed.
3. Check their keywords. Use the Google keyword planner. Log in, go to Tools and analysis and search your desired keywords, plug in a URL and get ad group and keyword ideas, as well as find out how much in demand various keywords are.
4. Pay for financial information. Dun & Bradstreet and InfoUSA provide detailed company information including but the services are expensive. Instead, check local libraries to find out if they provide access to such subscriptions.
5. Become a client. If you can buy a product or use a service, you will have first-hand knowledge of what you are up against with competitors. Test the experience online and in-store. Experience the buying process and evaluate how products are sourced, merchandized and priced.
6. Visit trade show booths. Pick up competitors’ materials. You can view demos or new products in person and ask their teams questions (It’s easier if your company name isn’t on your badge!).
7. Call to inquire about products. You can get in-depth information about pricing and what is popular, which can also help you determine what your customers are willing to pay.
8. Follow their blog. Chances are you’ll find out about new features, partnership launches and hires, as well as insight into company culture.
9. Browse social media. Like your competitors and follow their key personnel. Check social media for the problems and negative comments other companies have experienced and then learn from their mistakes.
o Facebook, Pinterest and Flickr photos can reveal numbers of employees, computers and other technology in use, future plans and culture.
o LinkedIn tells you who your competitors interact with (change your settings to anonymous if you want to be stealthy). To do this, take a look at full profiles and go to the “Activity” sections of the pages to see connections. Use search to determine who is hiring and recent hires. Former employees are listed on the Company statistics pages.
10. Get on competitor mailing lists. What better way to know what products or positioning the competition is pushing than to have them tell you? You can also gauge how effective their email or direct mail marketing is.
11. Ask your staff. Anyone who directly interfaces with customers probably has a perspective on the competition and should be tapped for insight. You can even offer small incentives like free lunches or movie tickets for the best information received each month.
12. Subscribe to industry magazines, newsletters and websites. You will know if the competition gets any coverage. A bonus is that you’ll learn which reporters and editors cover your space and can start building relationships by providing relevant information and perhaps becoming a trusted source that is quoted frequently.
13. Watch the stock value. If competitors are publicly-traded companies, you can set up your computer or smartphone to automatically notify you of changes.
14. Tap online reputation management services or software. I wrote about reputation management in last week’s blog post and referred you to services such as: Reviewtrackers.com, Netvibes, Reputation.com and Trackur.com.
Once you gather all of this intelligence, it’s time to create some order so you can take action.
- Develop SWOTs. Use your research to document your strengths, weaknesses, opportunities and threats. Be brutally honest about weaknesses and threats. Revisit monthly to ensure your are increasing strengths and capitalizing on opportunities. Here is a template.
- Create a strategic group map. Plot your company and competitors on a grid against two variables that are most critical to success in your industry (e.g., pricing and quality). This will illustrate the strategic space that is open. Here is an example using major retailers.
- Target three marketing improvements. Decide the most urgent priorities from a marketing perspective. Maybe one competitor has mouthwatering images on its website that entice consumers to buy their chocolate. Then work on your website to better display your candy. Another competitor holds contests that drive store traffic. Why not launch a free chocolate per month promotion? If there is a company with a great catalog, you can make it a priority to update your print materials.
You don’t necessarily have to use the same tactics, events and channels as competitors. Rather, your goal is to make sure all the marketing elements that make sense for your business are better than those of the competitors and reinforce your unique brand experience. According to Craig Fleisher, a former president of the Society of Competitive Intelligence Professionals, “Competitive intelligence is part of the day-to-day operation—part of the fabric of the enterprise.” If you make a regular process of it and take advantage of available tools, you can track your competitors easily and effectively in just a few minutes per day.
What other methods have you used to track the competition? Have you learned any information that changed your marketing strategy?