There’s a great deal to focus on when you’re trying to grow your professional service business and make it profitable. One area that small business owners all too often miss is researching their competitors. This is a small part of your day-to-day business operations, but it can make a significant difference in the effectiveness of your marketing. In fact, competitive research should be a critical factor in almost all your business and marketing decisions from the very start.
Do you know what your competition is up to? You should, and here’s why:
- Identify What Sets You Apart – How do you know what’s unique about your business if you don’t know what your competitorsare doing? You may be offering the same or similar services to the same or similar people and in the same or similar way. This is not a formula for success. You need to uniquely fulfill the needs of your market in a way that no one else is currently doing it.
- Avoid Doing What’s Been Done – What if you have a great idea for an ad,but your competitors have already run one like it? Simply knowing what your competitors are doing is a good way to make sure you don’t do something that’s already been. By knowing what your competition has already done, you can also learn what strategies did not work for them, and avoid the same mistakes.
- Know Your Strengths and Weaknesses – You may have an intuitive sense of your business’s strengthsand weaknesses. But you can never truly know unless you compare these strengths and weaknesses to those of others. You can truly understand what position your business occupies in the market. Through comparison with your competitors, you can understand which natural strengths you can play to for an advantage, as well as which areas need improvement.
- Identify Opportunities – If you know what your competitionis and isn’t doing, you can find gaps where they’re not meeting the needs of the market. These gaps present perfect opportunities for you to fulfill a need. For example, there may be one segment of your market that your competitors ignore, allowing room for your professional service company to come in and dominate this segment.
- Steal Ideas – Okay, maybe we should say something more like, “Borrow and modify ideas” or, even better, “Learn from your competitors’ mistakes.” You can watch your competitors and take note of their successes and failures – wisdom you can use to make your own professional service business successful. For example, if a competitor’s new service is not garnering a lot of positive feedback, you can discover why and improve upon it. If they ran an adfor only a brief period and then stopped, it’s probably an indicator that the ad or the location didn’t pay off. Learn from all of the failures and successes of your competition.
No business is an island. You need to know what your competition is up to so that you know what’s going on in your market. This can alert you to new trends, new developments in your industry, the market’s changing tastes, and more.
Check out our report titled “Competitive Analysis” for advice on how to gather competitor data, learn about your competitor’s clients, and analyze this information to increase your own competitive standing.