In a free-market economy, it’s only natural that businesses should strive to offer superior goods or services, as well as outstanding customer service and after-sale support.
Continual evaluation of client satisfaction is essential to maintaining and building your revenue base.
As the conventional wisdom says, it’s easier — and cheaper — to keep the customers you have than to attract new ones. But if you fail to gain market share by acquiring new customers and revenue streams, growth slows and eventually you might go out of business.
If your customers are satisfied but you’re still feeling stymied in your attempts to grow, it can be useful to evaluate your competition. Many lessons can be learned from the other businesses in your particular market or sector.
“Competition is extremely healthy,” says Thrifty Foods’ marketing and communications director Ralf Mundel. “It elevates the game across the board. Imagine how slowly innovation would happen without it. I’m delighted that we have competition in [the grocery] business. Others can become stagnant because there’s no one driving them forward.”
When you started your business, you may have researched the competition, but over time, changes in tastes, trends, and technology can leverage dramatic effects on your industry that are difficult to spot and adapt to on a long-term, strategic basis. If you’re looking only inward, you might miss these developments — and then you’ll just be spinning your wheels.
The key to overcoming the status quo is separating your business from its competitors, and the only way to do that is to get to know them. Check out the ads they’re placing in local newspapers and magazines, as well as the online versions of those publications. Buy and use some of their products. Type keywords that should apply to you and them into Internet search engines, and see whose page rank is better.
“Studying competitors is an important course of action to take in running your business,” says Sarah White in The Complete Idiot’s Guide to Marketing. “Learn from their growth strategies, positioning, and media strategies. Take every opportunity to learn, including observing what they’re doing right — not just gloating at their failures.”
You should take a look at your competitor’s prices, but not in a reactive manner. Think of price points as part of an overall value proposition.
“If you let competitors drive your business, you become just like them and you lose sight of your goals,” says Mundel. “If you get sucked into that mindset, you don’t stay true to yourself. Everyone has fallen victim to that way of thinking, including us from time to time … you have to have your own strategy and your eyes planted firmly on it. Sometimes the hardest thing to do is to do nothing.”
{advertisement}All else being equal, then, if your rivals’ customers are willing to pay more for what is essentially an identical product, they must be deriving some other benefit from your competitors’ offerings than they are from yours. It’s essential to your financial survival that you find out what that is, especially in a mature or established market without much opportunity to leap ahead through new products or services. In this situation, says White, “winning share from competition is your best growth strategy.”
Conversely, you want to know how your competitors are falling short of their customers’ expectations. If you’re in a service industry like food, travel, grooming, or wellness, visit websites such as Yelp and TripAdvisor to get a sense of how consumers feel about the competition. You could also call up your local Better Business Bureau to find out if complaints have been made against a competitor, and, if so, whether they’ve been resolved.
“The customer is always the net beneficiary of competition,” says Mundel. “So look at what your competition does is in response to their customers.”
On one level, explains Mundel, “it’s about knowing your customers and playing your game. But think of it like this: a successful hockey team plays their game, but they also know the other team’s game.”
Useful information about the competition can also be gleaned from business contacts. You likely share a common supplier or two with your competitor; there’s nothing wrong with getting their take on goings-on in the marketplace, and if they happen to pass along some valuable intel about your rival, all the better.
Humans are social animals, after all, and “we’re all more prone to gossip than we like to admit,” says White.
Employing this strategy, you might be able to discover some insights into the other guys’ management, staff, or buying habits.
If you want nitty-gritty financial data — maybe you’re looking to take over or merge with a competitor, or move into a new market — visit SEDAR.com or Dun & Bradstreet to obtain detailed credit reports on thousands of companies across Canada, the United States, and the rest of the world.
