Ask any business owner or entrepreneur, and they will tell you that studying your competition is an activity that everyone must do relentlessly. That said, given the availability of data assimilation through AI and tons of sophisticated business tools, gathering information about your competition is no longer a time-consuming and complicated task.
By utilizing numerous online resources, any business can now understand how their competitors run their business operations while avoiding mistakes. Contrary to popular belief, a competitor analysis isn’t considered infiltrating or spying on your rival’s activities.
Instead, it is an effective way to analyze the advantages and disadvantages of particular business processes, empower yourself with industry-relevant knowledge, and identify how to fill the gaps and improve your bottom line.
So, if you’re a business owner or entrepreneur who thinks otherwise, you have come to the right place. Today, we will share a few reasons why studying your competition will help you iron out business issues while increasing productivity and revenue in the process. So, without further ado, some of these reasons are listed down below.
1. It allows you to understand your target market better.
Studying your competition will allow your business to get a better, more accurate idea of the latest marketing trends that you would miss otherwise. After all, the ability to identify these trends is a huge asset for any company.
Moreover, doing so will enable you to predict future movements and adjust your business accordingly to compensate for mishaps that might occur in the future.
That said, there is another way to remain up-to-date with the latest target market-related trends; formal education. For example, you can enroll in an online MBA no GMAT required degree program to stay up to date with the latest industry-related trends while improving your business and organizational skills in the process.
2. It allows you to improve your marketing processes.
When your launch a service or product in your target market, chances are your potential customers will have one concern in their mind; how will the product or service make their life better than before? After all, if they purchase your competitors’ offerings, it means that they are doing an excellent job of adding value to their service or products and highlighting the benefits.
Studying your competition will allow you to better understand your potential customer’s behavior and give you a clearer picture of their marketing strategies and processes. Using this information, you can tweak and adjust your marketing approach according to the customers’ changing interests and needs.
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In the end, implementing the necessary changes will allow you to win over loyal customers and add new ones to your customers base.
3. It will allow you to eliminate trial and error.
Every business and target audience combination will provide varying results. That said, running a successful and productive business is all about experimenting and finding the right mix that works for your brand.
However, knowing that your rivals are constantly communicating with your target audience will allow you to reduce some of the trial-and-error procedures you have to go through.
If you and your competitors cater to the same target audience, you can learn which business strategies work for them and those that don’t. That said, if your competitor is experiencing success on their social media campaign, take cues from their posts and follow them regularly.
For example, If they utilize Facebook ads to attract more customers, use the same strategy to see if it works for your brand. However, if you’re not catering to the same audience, chances are you will learn a trick or two and apply it to your target audience to see if it works or not.
If it does, it will be a win-win situation for you.
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4. It allows you to improve customer loyalty towards your business.
It is also vital to identify the duration your competitors’ customers have been in business with them. If they aren’t long-time customers, there is a high chance that you can win them over. However, if they have been with your competitors for a long time, you will learn a few things about customer loyalty strategies and ideas.
Moreover, understanding your competitor’s level of customer loyalty will enable you to set realistic goals and expectations for your company.
5. It will allow you to develop a unique position.
Knowing about the services and products your rivals offer helps you determine your business’s actual position in the market. For example, does a service or product your competitors provide fulfill a specific customer need?
If yes, can you satisfy this need with a different service or product? Conversely, if your rival has similar offerings like yours, can you stand out with particular features?
For instance, if your rival provides customers with more detailed service, you can offer them a faster service instead. Or, if they sell large quantities of a specific product, you can focus on providing quality rather than quantity!
In the end, it is all about providing customers with a unique value proposition so they can consider your product over your competitors’ offerings.
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6. It allows you to improve your distribution/delivery methods.
Other than the services and products your rivals offer, you need to determine the delivery methods they use. For example, do they provide excellent discounts to repeat customers? Do they have special addons, payment plans, or bonuses? Do they offer same-day shipping and 24 hours delivery?
In the end, finding the answers to such questions will allow you to identify how your competitors distribute services and products amongst their customers. Equipped with such information, you can incorporate the same delivery methods, discounts, and deals into your offerings as well.
Studying your rivals will allow you to gain an insight into their strategies and obtain knowledge that might help your business stay ahead. However, the way you respond after acquiring such knowledge will make or break your business.
After all, not all of your rival strategies will end up working for you or providing you with similar results. In the end, the goal here is to innovate, not imitate!