GET STARTED As a business owner, it’s essential to know who your competitors are. Because every brand, no matter how niche, competes within its market. So it pays to know who you’re up against. Some of the things you want to know are:
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Whether you’re just starting a business or want to grow the one you have, it’s just as important to understand your competitors as it is to know your customers. By monitoring similar companies, you can not only learn about their strengths and weaknesses, but you can also identify gaps in the marketplace and, when necessary, pivot or adapt your offerings instead.
You can also:
When researching the competition, you have three types of competitors to look out for.
Direct competitors are the brands you first think of when listing your competition. They tend to:
For instance, if your business is a garden center, your direct competition is other garden centers in the local area. Examples of big-name competitors include Android vs. Apple, Netflix vs. Hulu, and Pepsi v. Coca-Cola.
Indirect competitors are a bit trickier to spot. They include businesses whose customers need similar solutions, but they don’t offer the same products and services you do. For instance, two fast-food restaurants are in the same type of business, but one can offer burgers and fries while the other’s menu is devoted to Mexican food.
Your target audience overlaps with theirs, but it isn’t an exact match. To continue with the garden center example, your core business might be indoor and outdoor plants and gardening supplies, but a supermarket chain competes with you by selling cheap houseplants. Indirect competitors can be challenging to go up against, but a good digital marketing agency can help you design campaigns that highlight why your business is the better choice.
Substitute or replacement competitors don’t sell the same products or services as you, but they do compete for consumer spending. For example, restaurants, bars, delis, and cafes can all compete for the local lunchtime crowd. Replacement competitors for your garden center might include discount chains and landscapers who also provide and install plants. Put another way, if customers could have purchased your offerings but chose to spend their money with another business, that’s replacement competition.
As you can see, it's to your advantage to know as much as you can about your competitors. From studying their ads and internet marketing strategies to driving past their location, you can learn what they’re doing well and where you might be able to fill a need they are not.
Here are some ways to identify the competition so you can compete more effectively against them.
A quick Google search like “garden centers Edmonton” will likely return dozens of results, but you want to concentrate on the first page and the competitors listed directly above and below your business. Those are your direct competitors.
To find your indirect competitors, check the keywords you’re currently targeting to find other businesses doing the same. For example, the keyword "houseplants" may reveal a grocery store and a landscaper as the top two results.
Aside from direct feedback, there’s no easier way to find out what your customers are talking about than on social media. For instance, a homeowner may post a question on Facebook asking for suggestions on where to buy native plants. Pay attention to which companies the replies refer people to. Other community forums like Quora and Reddit and review sites like Yelp can also help you gain customer insight.
Market research can be done in several ways, including:
Who better to learn from than the people you want to attract and retain as loyal customers? You have many options for soliciting customer feedback online and off. You can strike up conversations at the cash register or send email surveys. No matter which approaches you choose, regularly check your customers’ feedback for any trends that start to appear.
The more you know about the competition, the better. You can use a competitive analysis template or design one of your own. No matter which you choose, it should include:
That would be nice, but every business has competition in one form or another. Think about it. When Henry Ford started turning out mass-produced cars, he might have had zero other automakers to compete with, but he did need to compete with horse-and-buggy manufacturers, railroads, and even bicycles.
Even if all your competitors are indirect like Ford’s, they still can be powerful enough to disrupt your marketing and growth plans!
As your business grows and evolves, so too will your competition. Direct competitors can go out of business and indirect ones may pivot to become direct competitors. That makes it crucial to regularly do competitor analyses to keep an eye on who’s above, below, and next to you.
You also want to avoid making your competitive strategy a reactive game. A proactive approach that includes strong marketing campaigns helps prevent your competitors from pursuing your target market and keeps you at the forefront of your customers’ minds.
Lastly, knowing the competition doesn’t mean copying what they do. You can best achieve your business goals by focusing on meeting your customers’ needs better than anyone else does. Consistent innovation to ensure your products and service always compare favorably to the competition is the road to success.
Smart WSI Marketing is an Edmonton digital marketing agency that can help you identify your direct, indirect, and replacement competitors and then use the latest online marketing strategies to help your business stand out from the crowd. To learn more about how we do it, contact us today.
Lynne is known for her strategic approach to marketing communications, technologies, and lead generation. She has a passion for education, keeping up with current marketing trends and practices, and helping clients keep ahead of their competition.
