As an entrepreneur, you likely spend much of your time focused on your business. Yet as you prepare to launch (or grow) your company, it’s just as important to expand that focus to your competitors. Knowing and understanding your competitors is a key part of any company’s success. After all, odds are you’re not bringing a brand-new product or service to the market. That means you have competitors – and you need to show potential customers why they should do business with you, despite other choices in the market.
To help you get started, we’ve created a list of four questions you should answer about your competitors and your business.
1. WHO ARE MY COMPETITORS?
Before you delve into what your competitors are doing, you need to know who they are. Our recommendation: start with a competitive analysis.
By completing a competitive analysis, you’ll not only identify your top competitors; you’ll also examine what they offer, their message and how they’re connecting with their customers.
Then, you can use that information to refine your message, marketing, even your launch strategy, so that you can stand out from the rest of the pack.
Here are a few things to include in your competitive analysis:
- A list of your top 10 competitors (including company demographics, size and location)
- What products or services do they sell?
- A one-sentence summary of their value prop or message (Note: If you can’t easily figure this out from their website and social channels, that’s important to note—and another opportunity for you to stand out).
- Each competitor’s market share
- Each competitor’s retail presence — online-only? Brick and mortar? Omnichannel?
- Their social media channels
- Their content, including but not limited to blogs, e-newsletters, whitepapers, direct mail, etc.
- Each competitor’s strengths and weaknesses
- Possible threats to your business?
You should be able to get a lot of this information just by exploring a company’s website, visiting their store (if feasible/applicable) and taking a look at their social media presence.
For help building your initial list of competitors, use company directory databases like Dun & Bradstreet or ReferenceUSA, which should be available at most public libraries.
And while you’re in research mode, it’s also a good idea to do a market analysis. This is an examination of your industry so that you can take notes of trends, whether the industry is expanding or diminishing and possible disruptors.
A great starting place for industry information is a trade organization and that organization’s publications and magazines, if they have them. You can also use the Encyclopedia of Associations (available at your local library) to help point you in the right direction.
2. WHY YOUR BUSINESS OR PRODUCT?
Now that you have a solid understanding of who your competitors are and what they offer, it’s time to look at your own business. Consider these questions:
- What makes your product or service different from your competitors?
- Why should a customer choose your product or service instead of a competitor?
- What opportunities exist for you to innovate and stay ahead of the competition?
This way, you’re building on the foundation created by your competitive analysis. You not only know who your competitors are and what they’re doing, but also how you stand out. And it’s this information that will drive your messaging and marketing so that customers know who you are, what you offer and how you can help them.
3. WHAT’S YOUR VALUE PROP/MESSAGE?
Take the information you compiled in the last section — namely, what makes your product or service different from your competitors and why a customer should choose you — and solidify your company’s value prop and message.
As you articulate your value proposition, it will likely be similar to — or at least inspired by — your personal vision. After all, there’s a reason you want to start a business. There’s a reason you want to offer a particular good or service. Use that motivation to help tell customers what makes you a different — and better — choice when compared to competitors.
Conducting a competitive analysis before you create your company messaging can also help you craft a more impactful, results-driven message. Think back to the competitive research you did and which competitors stood out. Did you connect to any of the companies on a more emotional level? Did one do a better job than the others of telling you how they’re going to solve a problem?
There’s no harm in gleaning inspiration from your competitor analysis. You do, of course, want to avoid any sort of plagiarism. Instead, think of your customers and put yourself in their shoes. What do they want to know? What sort of message will inspire them to act? And how will your product or service help make their lives better?
4. HOW/WHERE CAN YOU SHARE THAT MESSAGE?
Once you’ve crafted your company’s messaging, think about how, where and to whom you can share that message.
Again, take a cue from your competitive analysis and look at what your competitors are doing. How are their websites? Do they blog? Are they active on social media? What social media channels are they using?
This isn’t necessarily the time to plan your full marketing strategy, but it is an ideal moment in which to start thinking about how you can connect with prospective customers to generate interest pre-launch and help drive sales and awareness once your business is up and running.
Remember: you don’t have to do everything your competitors are doing. And, honestly, you shouldn’t. After all, you’re presenting a better option than what your competitors are currently offering, and you need to share that message accordingly. Look for opportunities to be ahead of the curve, whether with a particular type of content, a new channel or platform, or another way that you can not only reach customers, but also connect with them. Successful businesses are those that help build and nurture relationships, and effectively communicating why you’re a better option is an optimal way to make a lasting — and positive — first impression.
TWO EASY WAYS TO KEEP TABS ON COMPETITORS
Once you’ve launched your business, you’ll want to keep tabs on your competitors. After all, they’re going to be modifying and refining their products and services to keep up with consumer demand, changing market conditions and industry trends — and you need to be proactive about doing the same.
It doesn’t hurt to revisit your full competitive analysis on a semi-annual or annual basis. But in the meantime, here are two ways you can stay connected to your competitors.
- Subscribe to their emails: Pick 2-4 of your strongest competitors and, if they offer an email newsletter, subscribe to it. That way, you’ll get their business updates, product news and other info delivered straight to your inbox.
- Set up listening streams on social media: Social media is an effective way to build brand awareness, help encourage sales and engage your customers. It’s an equally effective tool when it comes to staying in the loop with your competitors and industry in general.
Use a social media dashboard like Hootsuite to set up listening streams in Twitter. Pick a keyword, a search term or a competitor’s name, then Hootsuite will automatically create a matching Twitter stream. When you manage your company’s social media, take a few minutes and check in on those streams to see what your competitors and their customers are saying. Since social media sites like Twitter offer a real-time flow of conversation, social listening is one of the best ways to stay involved in your market while also spotting opportunities for improvement or differentiation.
If at any point in your competitive analysis or ongoing research you find yourself stuck — or you wonder if you’ve successfully identified your best competitive advantage — help is just a few clicks away.
Sign up for Kauffman FastTrac, free online courses designed to help both aspiring and established entrepreneurs. While you learn at your own pace, you’ll get information, exercises and tips to help you think through your business idea and position your company for lasting success. Talk about a way to stay ahead of your competition!