Great Ideas for your Small Business: Know Your Competition
Entrepreneurs love to brag about beating their competition, but the truth is, most small business owners are too buried in work to keep track of what their competition is up to. But operating your business in a vacuum can lead to its demise.
“You have to start with the basic premise that you need to know what your competition is doing,” said Guy Kawasaki, author of How to Drive Your Competition Crazy (Hyper- ion; 1996). “So you need to shut off the fax machine and the phone, close the door, and really figure out what you stand for, what your competition is doing, and what they stand for.”
Kawasaki, who rejoined Apple Computer after a break to help with their marketing strategy, says there’s no excuse not to know everything about your competitors. You can sit at your computer with a modem to find out just about anything by tapping into database services such as Nexis or Dialog or by searching for free information through the Internet and the World Wide Web.
After you fully understand what your competition is doing, figure out where they are vulnerable, he says. “You’re looking for chinks in the armor,” said Kawasaki. “You’re looking for pockets of dissatisfied customers that you can steal from them.” Kawasaki’s book is filled with exercises, tips, strategies, and interviews with people ranging from hotel magnate Steve Wynn to bull-riding champion Charles Sampson.
Meanwhile, here are some ways to check out your com- petition without spending a lot of money:
- Go shopping. If you make or sell a retail product, get out to stores at least once a week. One of the most successful entrepreneurs I know, Kathy Taggares, president and founder of K.T.’s Kitchens, prowls supermarket aisles checking out her private label frozen pizzas and Bob’s Big Boy salad dressings. She needs to know where her products are placed, but also wants to see what she’s up against.
- Subscribe to your industry’s trade magazine or newsletter. Read it from cover to cover when it arrives. I see too many piles of unread trade journals sitting in entrepreneurs’ offices. Smart reporters are paid to collect valuable information for you—so read it.
- Attend a professional meeting at least once a month. Getting out of your office and meeting competitors face to face is invaluable. People love to brag about what they are doing and often say too much about their upcoming products or services.
- Go to a major trade show at least once a year. You may associate trade shows with exhaustion and aching feet, but walking the aisles at an industry show can revitalize or even save your business. Sign up for the seminars, go to the receptions, and talk to everyone you can. Eavesdrop shamelessly during cocktail hour.
- Relentlessly survey your customers. Ask them what they like and don’t like about doing business with you. Ask the right questions, and they will tell you quite a bit about your company—and your competition. Postcard surveys are cheap, quick, and effective. Send out a stamped postcard with multiple choice or fill-in-the-blank questions. Offer a discount or incentive if they return the card promptly.
- Assign a staff member to order your competitor’s materials—brochures, catalogs, annual reports, price lists, and so on. Read their ads carefully. Check out their pricing and return policies. Know all you can about the enemy.
- Order something from your competitor every few months. This is the best way to find out exactly how they treat their customers. If what they sell is too big or too expensive to buy, visit their showroom.
- Organize an informal focus group at your church or synagogue, or with members of an organization. Ask what they like and don’t like about your products and your competition’s. It may not be scientific, but market research is more art than science.
- Talk to industry analysts or consultants who serve your industry. Buy stock in your competitor’s firm so you can receive annual reports and other information.
- Read newspapers and magazines. Clip out articles relating to your business or assign a staff member to do it on a weekly basis.