When you’re making plans for your business it’s important to research your customers and make sure your products, sales, marketing and more are tooled around their situation: the budget they have to spend in your sector, and how and when they like to spend it. As a simple example, there’s no point running a Back to School sale in February. Everyone’s already at school. That money has been spent.
But that’s only half the equation. Your market’s not just made up of customers, it’s also made up of the other businesses in your space, who are working to the same calendar and competing for the same customers. If you don’t know who they are and what they’re doing, your plans are only half made. Today we’re taking a look at this half of your market and asking if you know who your competitors are.
Identifying the Competition
Simply identifying the other businesses in your industry likely won’t be a difficult job – your own activity will reveal a lot of them, competing for the same raw materials, advertising in the same spaces, popping up at the same industry events. It’s also hard not to be aware of the largest players in your field – it’s impossible to run any kind of retail business without being aware of Amazon, for example.
The most important thing you can do is identify not just who your competitors are, but which ones are meaningfully in competition with you – who’s actually exerting a pull on what could be your customers? Think about locality and availability (so nearby businesses but also online competitors who are a threat wherever you’re based), but also where those businesses are aiming. If there’s a rival brand set up next door to you, but they’re targeting a market segment you have no interest in pursuing, they’re a much lower priority for you than a further flung business that’s aiming its marketing directly at your customers!
Doing the Research
It can be useful to get some expert help with this research. Market research firms give you the insight you need into what your customers are doing and, more importantly, why. You can’t effectively appeal to your customers unless you know why they’re choosing you or the competition.
On the other hand, competitive research firms can give you competitor insight into your rivals. Competitor benchmarking is a service that ranks you against your competitors for key performance indicators, so you can tell which ones you really have to worry about and make a part of your ongoing strategy. Trying to make plans without knowing which competitors are the most dangerous to you is an exercise in futility.