Why getting to know your competitors is key to growing your business

Do you know who your competitors are? At first this may seem like a silly question; after all, if you are an accountancy firm, clearly your competitors are the other accountants in your local area.

However, while this is true, for most businesses local and visible competitors are only part of the story. Piecing together the whole picture is crucial if you want to move your business on to greater success with a marketing strategy that will give you an edge over your competitors. After all, if you have no awareness of what your rivals are doing well and not so well, how will you be able to differentiate from them and strengthen your own position in your market?

Learning from the competition

At this point, you may be thinking, ‘I have a fantastic product and service and I know how to run my business, so why should I worry about what other companies are doing?’

It’s certainly true that these attributes are a recipe for success and competitor research will never be the solution to improving results for a sub-standard product or service. However, which business owner can honestly say that they have everything nailed and there is no opportunity to learn lessons, both good and bad from similar companies? The truth is every organisation’s offering can be enhanced with benchmarking using competitor research, particularly if like most businesses, you are operating in a crowded marketplace.

Remember, competitor research is not about copying what others are doing or merely finding areas to criticise; it’s about building on rivals’ strengths and learning from their weaknesses. And of course, what you learn will provide new insights into your own unique strengths and weaknesses too.

Who are your business competitors?

Your competitors can be divided into two categories – direct and indirect.

Direct competitors

These are the easy-to-define businesses who offer the same service as you, for the same demographic in the same area. For example, if you are a solicitor specialising in family law, your direct competition is other divorce lawyers in your local area. Equally, if you are an executive coach offering coaching via Zoom, your direct competition is other coaches offering a similar service in the same time zone.

Indirect competitors

This kind of competitor can be defined as a business who provides a different service in the same category. For example, an indirect competitor to a high street hair salon could be a hairdresser who visits clients in their homes.

However, in today’s digital world, where being seen online is all-important, your indirect competitors are any organisations who are competing with you for search engine rankings. This means any other business who is using the same SEO keywords as you to get noticed and clicked on as far up the search engine listings as possible. It’s important to remember that these businesses may not be in the same area as you – they may not be even selling the same product.

Finding your direct competitors

Because your most obvious direct competitors are often so visible and well known to you, it’s all too easy to forget to cast the net a bit wider to find out who else is selling a product or service that directly competes with yours. To cover all bases, do the following:

Research the market

Market research can involve formal focus groups, customer surveys, interviews and product testing. However, when building a picture of your potential customers’ motivations and concerns, don’t miss the opportunity to ask them questions whenever you get the chance.

Whenever you can, ask clients how they found you and which other companies were involved in the decision-making process that led them to you. Indeed, you don’t always need to wait until the customer has chosen you – asking them who else they are considering when they are still in the decision-making process can provide valuable insights into their needs.

Get social

Social media can be a treasure trove when it comes to finding out what your target audience is buying and why. This is particularly true if your target audience includes millennials, as research shows that 50% of this demographic place high importance on recommendations from friends and family when it comes to their buying decisions. As well as checking out conversations on apps like Facebook, Instagram and Twitter, look at conversations on forums such as Reddit and Quora to find out more about what people are looking for advice and recommendations on.

How to identify indirect competitors

Finding out who is competing with you indirectly is crucial if you want to feature in the buyer’s journey as they go online to research the product or service they are looking for. The steps you need to take are as follows:

Do keyword research The mysteries of Google’s algorithms can make SEO seem like a dark art to the uninitiated. But to get started, simply ask yourself what words or phrases are people typing into search engines when they are looking for a product like yours? The companies who also rely on these keywords to get seen online are your indirect competitors regardless of size or location. Unsurprisingly, this means that it can feel like David v Goliath for small and medium-sized businesses trying to compete for the most popular terms. Not only that, the formerly popular practice of ‘keyword stuffing’ designed to raise you through the Google rankings is now penalised by Google’s algorithms.

That said, there is still plenty you can do as a small or medium-sized business to improve your online presence. You can conduct keyword research yourself to find niche or less-used terms you may rank for using SEO software. You can then use your findings to build a content plan. However, this is an area where it can be worth using an SEO specialist to conduct SEO analysis and come up with a realistic and results-focused strategy for you.

Benefit from advertising –without paying! You can reap rewards from online advertising without even using it. By looking at your business’s keywords in Google Ads, you can see which businesses are paying for advertising based on those keywords and act accordingly.

Competitor analysis for a competitive edge

Taking the time to find out exactly what is and isn’t working for your competition doesn’t have to be a mammoth task. Making it a habit and gradually building up a picture based on your findings will more than pay off when it comes to gaining a competitive edge and growing your business.