They say: keep your friends close, and your enemies closer. And they are absolutely right. Understanding who you are up against is critical when you are building your business. However most novel entrepreneurs, and in particular Passion Entrepreneurs, tend to screw up their competition research. Big time.
For once they tend to look for answers only inward and base every decision on gut feeling. And on top of that, their overactive imposter syndrome makes them think that everyone is better than them. So their intuition is to just follow their instincts and let everything fall into place. Ignorance is bliss, right? Wrong.
In business, lack of information means lack of preparation. And lack of preparation almost always leads to misplaced efforts and lost opportunities. When you are starting your business, you want to optimize your time and resources as much as you can. This means arming yourself with as much information as possible to make informed decisions. Truly identifying and understanding your competition will allow you to position your brand in the smartest way possible.
Why is competition research so important?
Every one of us exists as an individual — as independent entities. However, we are also part of society. A complex and delicate system much larger than us. We are undoubtedly affected by the way other people behave.
People don’t exist in a vacuum, and neither does our brand. We exist next to, with, and against others. Always in constant competition — whether it is for a certain market segment, a table at a fancy restaurant, or the attention of someone we fancy. Acknowledging and understanding other players and the system itself makes it much easier to navigate decision-making. And by doing so, it can heavily influence our chances of success.
Picture this. Imagine if the day before a job interview, you were handed the resumes of the other top 4 candidates. This would put you at a great advantage. You could study their CV and understand how you measure against them. Google their names, stalk their social media profiles — figure out as much as you can about these people. Identify their strengths and weaknesses and then present yourself in a way that stands out.
Competition research allows you to do exactly that: identify the highs and lows of the competition, and lay down a strategy that capitalizes on them.
What exactly is “competition”?
This is a very crucial point. According to the Oxford dictionary competition is “the person or people over whom one is attempting to establish one’s supremacy or superiority; the opposition.”. That is a good start.
Most people, however, tend to identify as competitors only those other companies or brands offering the same products or services as you are. Because of this (wrong) understanding, I meet many Passion Entrepreneurs that tell me “I don´t really have any competition”.
Your competition is every other option, besides your solution, that the customer has when trying to the problem, need, or desire you are trying to target.
For example, let’s say you are a personal trainer focusing on beginners who want to get in shape. Your first instinct might be to think of your competition as the other personal trainers working in your area. But they are not the only option.
Subscription-based gyms, PT apps, or at-home workout YouTube Videos are directed toward this specific need as well (wanting to get in better shape ). On top of that, that same person might choose to go out for a run, start cycling to work, or not really doing anything about it.
If you think you have no competition. -think again. Chances are that either you are trying to solve a problem that doesn´t exist, or you lack an understanding of your competitive landscape. My money is on this last one.
Not all players are in the same league.
In the same way that not all your competitors are necessarily people offering a similar product, not everyone that has a similar product is your competitor. H&M and Gucci both sell white sneakers, but that doesn´t mean they are competing with each other.
Look at it this way: all these brands (and yours) are playing the same sport. But not everyone is in the same league. There are soccer players training for the World Cup — and there is a group of guys from your office that get together every Thursday to play in the park. Yes, technically, it is the same sport — but I think we can all see how Carl from payroll is not really competing against Cristiano Ronaldo.
For a product or service to be a viable alternative to yours, it needs to be available, suitable, and interesting to the same customer at the time they are making their purchase decision. You can always look up and take note of what aspirational brands are doing, but it far more relevant to keep track of those who can truly steal your customers.
In order to do this, you need to make sure that you consider both their product portfolio and their brand identity. Price and product architecture is a great way to start, but we should check also things like key features, availability, promotions, marketing strategies, etc.
The truth is out there
I know what you are thinking. “And where exactly am I supposed to get all this information, missy?”. Well, at risk of repeating myself: You need to think like a customer. You will find the answers you need by putting on the consumer hat and following the steps of their journey. And lucky for you, in the digital era, these steps are much easier to track.
By looking for the same value claims and information a customer would look for when searching for a product, you will learn how the different options are presented to them. Which features are highlighted, which keywords are most used. You see this by paying attention to things like the item they choose for their hero banner, or what piece of information is highlighted on the product page. Is it the price? The material? The fact that is a limited edition?.
This is critical because it shows you how your competitors are looking to be perceived. But then, you go one step further. You find out how the actual customer is perceiving them.
Most reputable brands already incorporate social proof directly on their websites. Things like product ratings and reviews can be a formidable source of information. If this is not the case, you can check the comments people leave on their social media posts, look into forums, or other review pages. By checking the comments their past and present customers are leaving about them you can learn the things that they are loving and most importantly – the things that they are missing. Do you see comments about customers not finding their size? Make sure to widen your size range! Are people complaining about poor customer support? Make responsiveness a priority.
Competition research is an ongoing battle.
As you have probably figured at this point, competition research is a critical step in building a strong brand. But is not a one-off job.
Both consumer behavior and the market landscape are constantly changing. You need to keep a close and active watch of your main competitors and be on the lookout for any newcomers. When I was working as a fashion buyer, about 20% of my time was dedicated to competition research and monitoring.
I’m talking about a continued, daily activity. Checking their product launches. Visiting their stores. Studying their promotions and marketing campaigns.
Remember that every time a consumer is trying to make a decision between your product and any other option out there – is a new battle. A chance to sink or swim.
I know that , especially for Passion Entrepreneurs, it can be hard to go deep on this research. Mostly because the most you get to know about these brands, the more you hear that inner saboteur saying ” Look at these guys, they are awesome! You don’t stand a chance”. But that is not true. You need to remember that all of those other companies were once where you are right now.
You need to see the fact that they have paved the road before you as an advantage! Think for a second how much easier it is to climb Mount Everest today than it was for Edmund Hillary back in 1953. The point of this research is not to prove that we are cooler than anyone else. The ultimate goal is to find a perfect spot in the market for you. A spot that allows you to directly target consumer’s needs while having the least amount of competition while staying true to your brand.
If by reading this you feel you might need to do a deep dive into your competition, in my book The Passion Entrepreneur I guide you step-by-step through the same process I used for myself, my clients, and my brands. And if you still feel like you need a little help, reach out! That’s what I’m here for.