It’s a tough world out there, whichever industry you are in.
Established companies continue to release new products to stay relevant. Their deep pockets allow them to dominate the advertising space, reaching more customers on a global scale. On the other hand, budding startups and SMEs fight the battle using disruptive and innovative products that threaten to outshine existing market favorites.
No matter where you look, the competition is tight.
One way to help you stay ahead of your competitors is by auditing their business practices. This can be done by hiring a mystery shopping and market research agency like SeeLevel HX and having them conduct a competitive intelligence or audit on rival businesses.
What is Competitive Intelligence?
Competitive audit or competitive intelligence is the process of collecting information in order to identify the things that work and don’t work for other companies. Using this information, you can gain a competitive advantage over them by formulating strategies that benefit from their weaknesses.
How is your brand perceived by customers? What are your brand’s strengths that bring more consumers to your door?
Competitive audits not only provide insights into your competitor’s products and services but also their behavior and practices in serving customers. Oftentimes, the focus of competitive audits is on determining the marketing strategies and brand principles that allow competitors to entice customers to repeatedly do business with them.
Benefits of Auditing Your Competition
It’s imperative to keep track of your competitors and identify where you’re positioned in the industry. Auditing them also allows you to determine the differentiating factor that sets your brand apart from them.
Aside from these, there are many other advantages you can gain from a competitive intelligence program.
It shows where you stand
Auditing how your competitors are doing will let you identify your position in the market. You need a benchmark against which you can compare your performance.
Are you struggling to keep up with the competition? By auditing competitors through mystery shopping, you’ll be able to identify practices that enable them to stay in the game. What works for them may also work for you, so it’s worth finding out what they’re doing right.
See things from a customer’s perspective
Shopping your competitors allows you to see how customers experience their brand. You’ll see how customers look at other businesses compared to yours and know why they choose you over them or vice versa.
Auditing your competitors will help you decide on the changes you need to implement within your organization to make your brand more appealing to your target audience.
Increase your market awareness
By keeping track of the activity of your competitors, you’ll be more sensitive to changes in the market and better able to adapt more to those changes.
Keeping track of the competition also allows you to get the pulse of the market. Where is the newest trend headed? Are preferences starting to shift? What’s the current talk of the town?
For example, you can adjust your prices the moment your competitors do the same. This way, you’ll stay within market range, and avoid losing your customers to lower prices.
This is also applicable to discontinued products. If you see that there’s a profitable market for a said product, you can quickly grab that opportunity to fill up the space they left.
Predict their movements
The best use of competitive intelligence is to predict your competitors’ next actions. By having enough information in your hands, you can gain a head start and implement necessary measures before they gain momentum with their new offers, new pricing or additional add on’s.
In any industry, businesses caught by surprise are often left behind. This can be a devastating blow if you aren’t able to quickly come up with a countermove to stay in the race.
We all think we’re the best or at least one of the best. But complacency has no place in a highly-competitive industry so it would be to your advantage to always keep tabs on your competition.
Management often gets trapped in this mindset by using outdated strategies to answer new challenges. Why not? It worked many times before. You’ve used it for decades and things turned out fine, so why won’t it work now?
By staying updated with current technology, social trends, and market developments, you’ll be able to introduce new ideas to the company. It’s important for any business to keep fresh ideas flowing since this is what leads to breakthroughs.
The size of your company or your competitors doesn’t matter when it comes to competitive audits. Overlooking small businesses that don’t seem to pose an imminent threat to you may cost you greatly in the long run. Remember, Goliath fell because he was overconfident.
Learn from their mistakes
Competitive audits allow you to learn from the mistakes of your rivals. You’ll be able to study how and why they failed to sell something to their target market.
Using this, you’ll be able to better formulate strategies that will address the hurdles they failed to deal with, giving you a better chance at succeeding with your own future endeavors.
Smaller businesses should allocate a portion of their budget for auditing competitors. Knowing what makes more established brands successful and applying them in your organization can accelerate your company’s growth.
Set your brand apart
Those who set their brands apart from the competition tend to be remembered for a long time by consumers. Whether it’s through product quality or customer service excellence, offering consumers something unique that can only be attributed to your brand will give you a big competitive advantage in your industry.
Small businesses can surprise their competitors using the information they gathered from competitive auditing. By coming up with a disruptive brand coupled with innovative methods that make the lives of their customers easier, they have been known to topple established practices and dominate the market.
Open up opportunities
Competitive auditing allows you to see market opportunities that may not be readily visible to others. Studying your competition enables you to understand the way they do business – their target market, their practices, and even their weaknesses. Even an established company has a weakness you can exploit in a fair manner.
If you find market gaps, you can target that niche and fill it up to get a larger audience share. Grabbing this kind of opportunity can drastically affect your performance for the better.
If you’re a startup company, going head-to-head against an established giant feels hopeless. What you can do instead is find the unfilled gap or unmet need in the market, cater to that audience share, and grow your business from there.
It is vital to keep track of your competitors and identify where you’re positioned in the industry. You should have a differentiating factor that sets your brand apart from them.
Guidelines for Conducting Competitive Intelligence
Before doing the audit, ask yourself first what your objectives are. What are you trying to compare? Are you looking for differences in product quality, customer service, or marketing campaigns? Answering these questions will help you direct the focus of your study and achieve clear, insightful results.
In selecting which competitors to include in your study, try looking for the top 3 to 5 brands in your industry. Make sure they are direct competitors to your business by selecting those with similar characteristics to yours.
Identify which of them you think is the best in the industry. Also, select one which you think is doing fine but still has some work to do to be number one in the market. Lastly, include a company which you think is doing a fair job but has trouble keeping up with the rest of the competition.
Competitive intelligence is useless when you do it after your competition has left you trailing behind.
Auditing your competitors should be done regularly. This will help you keep up to date with the market so you will be ready to pounce on any opportunity that may arise.
It’s true that you have to keep track of what they’re doing but that doesn’t mean your business decisions have to rely on their actions. You don’t want to be the one chasing their tail when you should be the one leading the pack.
Focusing too much on competitive intelligence, though, can also be bad for your business. You may forget about innovation when you become obsessed with looking too much into your rivals.
If you want to survive in the industry, you have to continuously improve your products and services and come up with new ideas that will keep customers interested.
Competitive intelligence arms you with two weapons that can greatly affect the way you make business decisions. First is the flexibility to adapt to sudden market changes and second is the ability to recognize areas of opportunity. Properly utilizing both weapons will give you the edge you need to continually improve your business.
A competitive audit is an effective tool that can be executed by a capable market research agency like SeeLevel HX. We have a vast network of professional mystery shoppers who can help us conduct business intelligence studies and get you more information about your competitors. In addition to this, we’ll provide you with actionable insights that will guide you in enhancing the way you do business with customers.
Post contributed by Lisa van Kesteren
Lisa van Kesteren is the CEO and Founder of SeeLevel HX, the mystery shopping agency for Retail, QSR, and Financial Service brands. Utilizing over 650,000 professional mystery shoppers in every nook and cranny of the United States, she is on a mission to help brands improve the human experience of each and every customer interaction.
Lisa started her career as a Private Investigator and is considered one of the pioneers in mystery shopping. After building 2 different global divisions for large corporations, she launched her own company. Lisa is a widely coveted panelist and speaker on customer experience, best in class data collection practices and the evolution of the On Demand economy.