Knowing your competition is crucial to the health of your business.
Unless your product or service fulfills a particular niche and you are the only game in town, you likely have competition. However, the chances that your business is entirely unique and serves a vastly different function from anything or anyone else in the market are slim to none. Thus, knowing your competition, and by extension knowing how to beat them, is essential to ensuring the success of your business.
Who Are Your Competitors?
First, you need to know who you’re up against. For this post, we’ll use the classic Coke vs. Pepsi example of business competition. Coca Cola’s biggest competitor is Pepsi. That’s because the venn diagram of the services that each company provides is going to show a lot of overlap. You can determine who your competitors are by what products or services you offer, the scope of your operation and the demographics that you’re trying to appeal to, among other factors.
How Are They Doing?
In researching your competition, the biggest question you should have is how they’re performing. If they’re making more money and satisfying more customers than you, why is that? How can you learn from them? If they’re tanking and their customers are coming to you as an alternative, what did they do wrong and how can you avoid making the same mistakes? One way to measure success is clearly increased sales, but it’s not a reliable gauge unless it continues to go up consistently over time. Measure how well your competition is doing by looking at a wider range of information – online reviews of customer satisfaction, sustainability reports, amount and method of advertising, online followers and more.
What Are They Doing Differently?
Regardless of whether or not the competition is doing better or worse than you, the odds that you’re getting the exact same amount of business is very low. Either they’re making less money, and knowing what they’re doing wrong is helpful, or they’re making more, and knowing what they’re doing right is even better. Coca-Cola, as an older company, tends to focus on love, family, and tradition as themes in their marketing. Pepsi, on the other hand, is famously for “those who think young.” Analyzing the differences in marketing that you and your competitors choose is just one way in which you can learn from what they’re doing.
What Can You Do?
Look for businesses that are trying to reach the same customer base as you. Start geographically. Understand how they operate and how they operate differently. Doing research on your competition is the best way to stay ahead and keep your business strong.
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