Your competitors are businesses that may deter people in your target audience from choosing you. While this immediately makes them seem like the enemy, the truth is that competition is not all bad. In fact, it is important for companies to have competitors, because it is through competition that innovation and improvement occur. However, innovation and improvement only occur if you know how to respond to competition properly. By learning about your competitors and striving to distinguish your business from them, you can actually benefit from your competition.
Benefits of Knowing Your Competitors’ Target Audience
It’s important to know your own target audience so that you can stay attuned to their needs and adjust your products and services accordingly. However you can also benefit from knowing your competitors’ target audience.
Standing out from your competition requires you to always be on your toes, not just knowing what they are up to now, but knowing what they’ll be up to next. When you know your competitors’ target audience, you can gain insight into who they’ll invest extra effort in, and how; as well as what their future steps might be. Benefit from your competition by using knowledge of their steps to stay one step ahead. For example, if you’re a plumber and see large plumbing companies booking online, you may want to consider getting ahead of the curve of other small business plumbers by getting online booking too.
Reduce Trial and Error
Every target audience and business combination will produce different results, and a major part of running a business is experimenting with what works. However, knowing how your competitors are interacting with their target audience can benefit you by reducing some of the trial and error you will have to do.
If you have a similar target audience, you can learn from them by watching which strategies succeed and which ones do not. For example, if a competitor is successful on social media, follow along and take cues from their most engaging posts. If they’re running Facebook ads or Instagram giveaways to get more customers, try to see if it will work for your business!
If you have a different target audience, you might learn some ideas to adopt and apply to your audience. Or, you might be able to predict that if a particular strategy is working for their target audience, it will not work for yours.
Find a Niche
At first glance, it may appear as though you and a competitor have the same target audience. However, take a closer look. Can the recipients of your products or services be divided into subgroups, such as beginner, intermediate, or advanced? First time or repeat? Occasional or frequent? If so, are there groups that your competitor is not able to serve that you can target? For example, does your yoga or fitness studio have a lot of pregnant women or moms? Consider offering pre-natal yoga or childcare to stand out and attract more of these types of clients! Finding segments, needs or opportunities in your target audience that your competitors ignore can benefit you by helping you to find a niche market.
Benefits of Knowing Your Competitors’ Customers
While customers come from your target audience, these two groups are not one in the same. Your target audience encompasses the types of people your products and services will fit best, and those who engage with your business. Your customers are those people who recognize that you are the best fit for them, and who actually make purchases from you. Here’s how you can benefit from knowing your competitors’ customers.
Learn About Your Customers
If your competitor has the same target audience as you, knowing about their customers—their habits, preferences, problems, and lifestyles—can help you learn about your own target audience and customers. For example, let’s say that you and your competitor both target young female women. Had you not seen that the majority of their young female customers are married, you might never have recognized that the majority of your customers are single. You might then be able to leverage other forms of marketing like singles meet-ups. Observations and realizations made by contrast is a great way to benefit from your competition.
Learn How to Get Future Customers
If you can, talk to the customers of your competitors and find out more about them, specifically in relation to your competitor. Find out why they choose them, how they found them, or why they continue doing business with them. You may benefit by finding out what you can do to prevent losing future customers to this competitor.
Improve Customer Loyalty
It’s also important to find out how long your competitors’ customers have been with them. If they are long time, loyal customers, you might learn a thing or two about customer loyalty ideas and strategies. If they are not long time customers, maybe there’s a chance that you can get them to try you instead. Understanding the level of customer loyalty of your competitors benefits you by enabling you to set realistic expectations for your business.
Benefits of Knowing Your Competitors’ Products and Services
Develop Your Own Positioning
Knowing which services are being offered by your competitors benefits you by helping you to understand your own positioning. Does a product or service they offer meet a particular need? If so, can you meet that need with a different product or service? If they provide a similar product, can you differentiate yours with certain features? For example, if your competitor offers a more detailed service, maybe you can focus on offering a quicker service. If they sell large quantities of a particular product, you might see that you can benefit from highlighting the quality of your product.
Get Insights Into Your Strengths and Weaknesses
You’ll want to know why customers are deciding to go with one company over yours. Knowing the options they are deciding between can help you understand whether it’s the products or services that are winning them over, or if it’s something else.
On the flip side, if you notice that your competitor is starting to offer something that you provide, this may be an indicator that what you’re offering is in high demand or that you offer it well! Unfortunately, you might now need to find other ways to distinguish yourself from them. Benefit from your competition by using them to gauge and improve your success.
Improve Your Products and Services
Pay attention to what products or services the customers of your competing business buy most. If they are buying them because they are in high demand, then you might want to start offering them too. If it is a popular item because your competitor can produce or provide it better than your business, then you have your work cut out for you: either improve yours or choose to specialize or excel in a different product or service. Also, your competitors’ products and services can help you stay on top of what’s new and exciting, and provide inspiration for your own innovative ideas.
In addition to the products or services your competitor offers, you will want to find out how they present or deliver them to clients. Do they bundle services together? Do they offer discounts for bulk purchases? Do they have bonuses, payment plans, or special add ons? Seeing how your competitors present their offerings can help you determine how to make your products and services attractive to your target audience, or more attractive than theirs.
They key to benefitting from your competition is in how you respond to the knowledge you obtain about them. It is okay to adopt ideas from others, but it is important to apply your own company twist to them or even add on to them. The idea is to innovate, not imitate. Competition happens because every business is unique, and change and improvement happens because of competition.