Small and micro-businesses often find it very difficult to conduct analysis and research on their competitors. This articles give you a guide to how to review what other companies in your market are doing.
Businesses naturally focus on themselves but it can often be useful to take a wider view of the industry in which your micro-business operates. Then you can see what competitors are doing and whether they are likely to be a threat or not. It can also tell you about likely changes in your market.
The first step in any form of competitor analysis is identifying who the competitors actually are.
Finding your competitors
As a first step, type the name of your market or product into Google, Bing, Yahoo! or Ask and see who comes up. This will give you an initial list of who you are competing with and you can then refine the search either geographically or to focus on particular aspects.
Offline directories such as Yellow Pages or a local directory can also help. They are particularly useful for products and services where customers don’t automatically look online first of all, or where the online aspect of your market is not well developed.
Don’t forget to look at closely matched products as well as the specific products you offer.
Subscribe to the Google Alerts feed service. You’ll then be automatically updated if anyone is talking about your micro-business, the market, or competitors within it. Google Alerts allows you to set particular keywords and then be alerted automatically whenever Google identifies anything new related to those words. So you might set up alerts for your micro-business name, for example, together with your products and the local area in which you are located.
Do you know how your customers find your product? You may be surprised by how other people view your product or who is selling it as an addition to something else. You may have to have conduct other research before you can get a truly accurate picture of how customers really view your product and how they might search for it.
Review the places where your potential customers are likely to look (both offline and online) and see which competitors are there. You’ll get a good idea of the types of marketing activities they do and how they position themselves.
This helps to provide real depth on what your competitors are doing as you find out what it’s like to be one of their customers. Devise a script covering what you would like to know and get a family member or friend not connected with your business to call or visit each competitor. See what aspects of their service or sales process are better or worse than yours.
Aspects where competitors are better than you indicate areas of your micro-business where you need to improve. Areas where they are not as good is also useful though, as they provide additional information for developing your proposition or for use in advertising material.
There may be existing information on your market and what competitors are doing. See Publicly-Available Research for more details on the sources available and how to interpret it.
Making sense of it all
It can be useful to create a ‘Competitor Analysis File’ with details of who they are, a summary of what they offer and details of all their marketing and perhaps products or anything else useful. This can then be added to and consulted on an ongoing basis.
Conduct the competitor research as often as you feel necessary, perhaps monthly or six-monthly and update your findings. Used in conjunction with secondary research, you then have a framework around which to base your analysis of the market and competitors, helping you decide what you need to do to grow your micro-business.
This article is focused on reviewing competitors and the market, but you also need to research your customers and advice on this is given in Finding Out Who Your Customers Really Are and Market Research and the Micro-business.