07/ 17/ 2006
by Tamara E. Holmes
There's an old saying: "Keep your friends close and your enemies closer." Small-business owners would be wise to learn this lesson since a good way to make sure your small business measures up to others is by knowing your competition.
You don't have to plant spies in your competitors' organizations or try to steal company secrets, but there are a variety of ways that you can get some clues into what's working for them—and what may also work for you.
Be a customer. The only way you'll get a true understanding of your competitors' customer experience is to become a customer. Buy products or services from competitors every once in a while to see how your offerings stack up. Not only should you pay attention to competitors' products and services, you should also rate their other intangibles such as customer service. If confidentiality is your concern, hire someone to act as a mystery shopper. That person can utilize a competitor's services and then report the findings back to you.
Survey customers. What better way is there to find out what potential customers value than to ask them directly. Come up with a survey that asks customers what services they appreciate most, as well as what they like most about other businesses they support. If you can't get a list of a competitor's customers, send surveys asking potential customers what businesses they support in your industry, and what they like best about them.
Monitor the media. Are your competitors running special promotions or getting a lot of local media attention? By keeping an eye out for sales and special marketing blitzes, you can see how your business stacks up or may be slacking.
Talk to sales reps. If you sell products, you may have another good source of information: the vendors who sell you merchandise for your store. Sales reps sell their wares to businesses across the country. Ask them what special promotions they've seen, and whether they've noticed any product displays that have seemed particularly effective.
Go the distance. Don't just check out the competition that's nearby. With the Internet and so many forms of communication, people can often get services and products from anywhere. Likewise, competitors in a different geographic area might clue you into some customer trends that have not made it to your side of town yet. Plan yearly trips to different regions to sample products and services from out-of-region competitors.
Join trade groups. One of the best ways to meet competitors is to join trade associations and business support groups. That way, you'll be in an environment conducive to discussing best practices in your field. You'll also be able to find out what's working and what's not working for other small businesses. Regional organizations can give you a sense of what local competitors are doing, while national organizations can expose you to best practices across the country.
Strengthen the network. Once you meet competitors at association meetings, take the relationships a little further. By getting to know your competitors, you may find that it's possible for the two of you to work together. Though you may sell some of the same products, you might find that there are other areas where the two of you can refer customers to each other. By getting to know one another, you may discover ways to make both of your businesses better.
Businesses must always be willing to learn and grow in order to maintain success. By keeping your eye on the competition, you may discover ways to take your business to the next level.
