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EASY SMALL BIZ MARKETING – #5 Know Your Competitors

January 18th, 2013

A competitor is any business that has the potential to take away customers from you. They could be offering a similar product or service to you but sometimes they might not even operate in the same industry as you, so may not be immediately obvious.

Those offering the same or similar products and services are called “direct competitors”. In the example of our online luxury pet goods business, our direct competitors would be other online designer / pet shops. Although our customers local pet shops are unlikely to stock the same type of unique and luxury products they are an “indirect competitor” in that customers may decide to buy something less unique from them because it suits them for other reasons.

There are a number of ways in which businesses can compete with you. One of them is pricing.
A competitor may reduce the price of what they’re offering to gain more customers from you or increase their share of the market.This may mean that you have to run your business more efficiently in order to be able to reduce your costs and lower your price accordingly.

They can also offer customers benefits other than price. They may for example be more accessible or convenient to shop with. One online fashion retailer has recently offered customers a next day delivery service if they order before 9pm which sets them apart from their competitors. In other cases something about a competitor’s product or service may be unique and not available elsewhere. When the dyson company promoted the first vacuums without bags for example.

The key to staying ahead of the competition is knowing yours and their strengths & weaknesses. Most people have heard of a business SWOT (strengths, weaknesses, opportunities and threats). Hopefully you’ve considered yours when starting your business. If not, here is a good article on how to do it. http://www.mindtools.com/pages/article/newTMC_05.htm#business

Take a bit of time to find out what your competitors strengths and weaknesses are. What is good and not so good about what they’re offering? How does your business compare? What can you offer that is different or more appealing to customers?

Also see our posts on knowing your products’ Features vs Benefits and Your USP

So by this stage you should have a very good idea about what your customers are looking for, what is already being offered to them and what it is that you can offer them that will appeal. Hold on to these ideas because they are like precious gold dust for using in your promotional materials!

How did you find out about your competitors? Did you approach any yourself? What sort of tips would you give others in your position?

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