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Using Competitive Research to Give Your Business the Edge

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Using Competitive Research to Give Your Business the Edge

By Rieva Lesonsky, Guest Blogger
Published: September 9, 2011

<p>&nbsp;</p><p>For a small business in today&rsquo;s economy, one of the most crucial keys to success is knowing what your competition is up to at all times. If you don&rsquo;t think your competitors are out to eat your lunch, you&rsquo;re not going to be around very long. And in today&rsquo;s global market, competition can come from new and unexpected places and can pop up at any moment. How do you stay on top of it all?</p><p>Start by compiling a list of your competitors. Assess all the markets where you sell (local, regional, national, global and online) and which competitors exist in each of them. You need to know what your competitors are doing and be able to answer these questions about them:</p><p>&nbsp;</p><p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <em>Where are they? </em>Local, nationwide, global? Brick-and-mortar only or ecommerce?</p><p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <em>How big are they? </em>Are your competitors small businesses, regional chains or huge multinationals?</p><p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; How do they sell? Do they sell direct, to wholesalers, through reps?</p><p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <em>Business model:</em>What do they make their money from?</p><p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <em>How do they price? </em>How much do they charge and do they offer different pricing structures, such as bundling options? Do &nbsp; &nbsp;they discount?</p><p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <em>How profitable are they?</em>How do their profit margins compare to the industry average?</p><p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <em>What&rsquo;s their branding and marketing strategy? </em>Can you define their brand in a single sentence? What avenues do they use to market?</p><p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <em>How are they staffed?</em>Do your competitors have full-time or part-time employees? Or are they virtual or outsourcers?</p><p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <em>What&rsquo;s their overhead?</em>Do they have high or low overhead costs?&nbsp;</p><p>It&rsquo;s easier than it used to be to gain this kind of information, but it still requires some time and effort. Here&rsquo;s where you can find the facts:</p><p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Your industry or trade association won&rsquo;t tell you details about specific companies, but they&rsquo;re a good place to gather benchmarks and averages for your industry.</p><p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Regularly read trade magazines, blogs and websites relevant to your industry and your competition to keep up with news about their plans.</p><p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Go online and search your competitors; set up a Google Alert on their businesses or product names to get the scoop whenever they make a move.</p><p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Get social by signing up for their email newsletters and watching their Facebook or Twitter accounts. These days, many companies announce new products or services, or survey customers about planned initiatives, using social media, so this can be a good insight into future plans.</p><p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Contacting their customers can work well for a B-to-B company. They&rsquo;ll often be quite honest with you about what they like and dislike about the company, and may give you insights into how to compete.</p><p>&middot;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If you know the competitors&rsquo; suppliers or have a relationship with them yourself, suppliers can also be a great source of information.</p><p>Once you&rsquo;ve got the information, don&rsquo;t just sit there&mdash;do something with it. Assess where your competition is weak and how you can turn their weaknesses into opportunity for your company.</p><p>&nbsp;</p><p><em>Rieva Lesonsky is CEO of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Follow Rieva at </em><a href="http://twitter.com/Rieva"><em>Twitter.com/Rieva</em></a><em>and visit her blog at </em><a href="http://www.smallbizdaily.com/"><em>SmallBizDaily.com</em></a><em>. Visit her website </em><a href="http://www.smallbiztrendcast.com/"><em>SmallBizTrendCast</em></a><em>to get the scoop on business trends and sign up for Rieva&rsquo;s free Trendcast reports.</em></p>

About the Author:

Rieva Lesonsky

Guest Blogger

Rieva Lesonsky is CEO and President of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Follow Rieva at Twitter.com/Rieva and visit SmallBizDaily.com to sign up for her free TrendCast reports. She's been covering small business and entrepreneurial issues for more than 30 years, is the author of several books about entrepreneurship and was the editorial director of Entrepreneur magazine for over two decades

Comments:

The best form of competitive research is to create an online survey or questionnaire and gather as much feedback as possible from your target audience. Successful survey research can give any business the edge over competitors.
That was an interesting article. I find that competitive research can be made much more efficient by using tools such as Google Alerts to monitor the competition.
I have always known that it was important to follow what my competitors are doing, but I hadn't thought about following their facebook and twitter pages. Thank you for that tip!
Competitive research is incredibly valuable. The old saying that information is power certainly rings true in today's tech world. It'll be interesting to see how the control of information evolves over the next few years and how research strategies adapt to these changes. In our chiropractic websites industry this is especially true. The companies who are able to efficiently research and implement chiropractic marketing strategies according to changes in search algorithms and design trends tend to emerge far ahead of the competition.
Research is one important tool that must be applied in any type of business existing nowadays. This tool can take several advantages most especially done in right manner, as this could be your arm against your competitors. Great information and its worth-reading for. Houses in the Philippines
Great article. Monitoring your competitors with Google Alerts and other tools is a key factor in conducting detailed competitive research
Great post .This post will be helpful for them who are going to start their small bussiness. I appreciate you , I also think that one can Give his/her Business the Edge Using Competitive Research.. Thanks Shajid Takeshi Yashima: Investment and Financial Education Blog This post was edited to remove a link. Please review our Community Best Practices for more information about how best to participate in our online discussions. Thank you.
Google alerts is the key factor, fantastic tool that makes market research a pleasure in my opinion. Normally a labour intensive, time consuming but neseccary task, market research that comes to your door (or desk) - a great facility that ticks nearly all the points in your post. Difficult trading landscape in construction / engineering - google alerts keeps me on top of trends and my compeditiors for my core business Conspect structural engineer
Your article is right on the money. You have to do competitive research, which is exactly how we determined that the medical tourism Costa Rica offered was the exact environment for us to begin our company. Regards, Sam
Rieva, Competitive research is essential to getting a business off the ground quickly. This is something I know quite a bit about since I teach people how to start and maintain websites online. The only way a website owner will be able to earn cash online is to figure out where the competition is and avoid it in the beginning.

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