Whichever category your small business falls into, it’s unlikely you are the one and only entity operating under your niche, sector or industry. Whether you sell houses, diagnose patients or design logos, we’ll bet our chances you have competitors. The real question is – how well do you know your competitors, and what threat do they pose to your business?
Unless you offer a completely one of a kind exclusive service, you will need to know who else is in the game, vying for your customer’s attention. Knowing who these mysterious contenders are, how they measure up to your business and understanding your competitive advantage is the foundation to any strong business strategy.
The first step to accessing this crucial piece of business intelligence is doing your homework.
How do you define competitors?
In this assignment, you will uncover two types of competitors, direct and indirect. Whether we are exploring direct or indirect competitors, better the devil you know as direct competitors are not the only type that can jeopardise your business.
Direct competitors are the businesses that offer your audience a carbon copy of your product or service within the same market. An example of direct competitors would be two builders that specialise in renovations and extensions for first time home buyers in Sydney’s Eastern Suburbs.
Same, same but different. Indirect competitors are businesses that may offer a similar product or service to yours, but they do not sit in your market nor appeal to the same demographic. For example, a Sydney PR agency that helps small business owners build their brand is an indirect competitor of a Sydney Marketing Agency that offers an alternative pathway for businesses to increase their brand awareness.
The key learning here is not to put your blinkers on when discerning who your competitors are. For example, a Chiropractor does not only compete with other Chiropractors. They also compete with physiotherapists, acupuncturists, and other service providers that relieve a patient’s pain and improve their function. So don’t miss out on a plethora of insights by skimming over sources, instead snoop into your indirect competitors for the whole picture.
How do I know who my competitors are?
Research your market to get to know your customers.
The best way to get to know your customers? Talk to them. Why make assumptions and base your business strategy on guesstimations when you can learn all about your customers’ challenges and how your service or product alleviates them straight from the horse’s mouth. While you’re at it, harness your business network and start googling to get the down-low on all your direct and indirect competitors as well as the threat they pose. If you have some cash to splash, there are market research companies that can take this off your hands.
Articulate your competitive advantage.
Once you know who you are up against and what they have to offer, your competitive advantage will become clear. Your competitive advantage is anything that sets you apart from your competitors and if you’ve got it, flaunt it. So whatever gives you an edge in the market, keep it front and centre and don’t let your prospects forget it.
Keep a close eye on your competitors.
Your competitive advantage is dependent on your competitors, and your competitors are not at a standstill. Sorry folks, this is not a once-off assignment, and you cannot set and forget your business strategy. You will need to keep tabs on how your competitors are performing in the market and note any new service offerings that pop up. Otherwise, your competitive advantage could wind up being a given in your industry.
Benchmark yourself against the market.
Any solid business strategy should include tracking crucial aspects of your business, including customer satisfaction, service range, brand awareness, and pricing. This data can be weighed up to public information on your competitors, allowing you to see how you measure up. Better yet, you will be on standby, ready for any potential threats. If a direct competitor launches a sale, you can swiftly brainstorm a suitable response. Perhaps it is bundling up some of your services, launching a flash sale or adding bonus inclusions. Regardless of your tactic, you will give yourself a fighting chance to remain competitive.
Stand out from the crowd.
Your price point and service offerings are not the only things that will set you apart from your competitors. Consider other areas where you think your business shines; maybe it’s your values, brand personality, or even your glowing reputation for customer service. Leveraging the aspects of your business that are unique or showcasing what you excel at is how you will find loyal customers and stand out from the crowd.
Piecing it all together.
Need a hand with understanding your competitors and putting together a business strategy? Whether it is a full-day meeting to strategise what the future will hold and the best steps to get there or regular teleconferences to review business performance and pain points, we tailor our services specifically to you and your business. If you are ready to make more possible for your small business with a personalised business strategy, book a chat or get in touch today.