Learning from Your Competition

Although your customers are probably your best teachers, your competition is not far behind.

Here are a few steps to help you learn from your competitors:

• Start your analysis with an overview of the competition. Consider how customers select various suppliers or providers. In this analysis, you can include pricing issues, company history, location, exposure, branding, word-of-mouth referrals, and satisfied or loyal customer profiles.
• What differentiates one competitor from another? Now take this one step further: What differentiates you from your competitors?
• Don't rely on your memory for this activity. Create a table or chart and compare. Putting the information in writing allows you to see the holes in your thinking.
• If possible, try to quantify. Provide numbers — market size, market share, quality, and required cash flow to stay open, for example. By comparing their likeness, you will see their differences.
• Focus not only on what your competitors do well but on what they do poorly. Both are excellent learning tools. Most important, focus on what they do to correct a bad situation.
• Remember that your competitor does not simply reside down the block from you. In this global business age, your competitors may be — and probably are — half-way around the world.
• This is not a one-time-and-done activity. Competitive analysis is ongoing. Schedule regular intervals to gather the troops and digest your collection of information. Create a working collection system for the data that you gather. Finally, assign an individual, perhaps the sales manager, to oversee this competitive date collection initiative.

Where can you find this competitive information?

• Start with a general online search using Google or another broad search engine. Use keywords such as industry name, products, services, or company names.
• Continue with periodical research. Once you know your competitors' names, locate and read articles in trade publications, newspapers, business journals, and more. If your competitor is traded publicly, seek out a copy of its annual report.
• Visit your local college or university library. Many of these institutions subscribe to databases containing business information. The reference librarian will gladly assist you in locating this competitive information.
• Spend time on their web sites. View it as both a competitor and a customer.
• Search business directories, phone books, and trade association listings.
• Attend trade shows in which your competitors are exhibiting. Visit their booth as potential customers. Now, position yourself where you can observe the action in their booth. Who is visiting? Who are their potential customers? What is their marketing angle? What are the customers' reactions? Perhaps more importantly, keep your eyes and ears open after the trade show floor has closed. Some of the best information is shared over an evening beverage or at the dinner table next to you.
• Attend seminars or workshops that your competitors are hosting. Oftentimes, these occur in conjunction to trade show exhibitions.
• If possible, visit your competitors' locations. This is a bit easier to do with retail locations than with other types of businesses.
• Interview your competitors’ customers. If you have a sales team trying to penetrate the market, they probably know much of this competitive information. Create a competitive information form for reporting this information back to headquarters. Even better, schedule regular sales meetings in which competitive information can be shared. Sometimes seeing the big picture brings new insight.
• If possible, take note of the activity of your competitors' salespeople. When they log in at a potential client's location, who are they visiting? Are you reaching the same people? Are you selling to the same level?

Remember as you gather information about your competitors, they too are gathering information about you.

Carol Parenzan Smalley is an educator, innovator, and entrepreneur. She is the creator of and instructor for Creating a Successful Business Plan, an online course offered by colleges and universities around the world.