Studying your business competition is a lot like eating dessert: It’s a great idea, but it must be done with care. If you put too much emphasis on it, it can be very bad for your health.
Here’s a quick guide we’ve put together to help you identify your closest competitors. Just like dessert, it’s A-OK to enjoy the process of studying the competition, but do not overindulge. Successful companies are focused on their product and their customer – not what their competitors are (or are not) doing.
The Difference Between Competitors and Close Competitors
A lot of auto parts etailers believe that they compete with giant companies like eBay, Amazon, or giant parts retailers like JC Whitney, Rock Auto, etc. This is a mistake. Here’s why:
- Giant retailers aren’t focused on any specific niche -they’re focused on building a big brand. As a result, they’re generally a sub-par source of inspiration for companies that are focused on a niche.
- Consumers often favor specialized retailers over big brands, especially when it comes to finding quality or value. Many people like to shop on Amazon or eBay, but that doesn’t mean they won’t buy a shift knob from a company that specializes in shift knobs. Or a lift kit from a company that specializes in lift kits. Etc.
- The goal isn’t to beat the big retailers, it’s to grow past the other small companies. A realistic path to growth for a smaller retailer isn’t to one day supplant eBay – it’s to become the biggest of the small brands, and then merge with or acquire smaller competitors.
Basically, if you want to grow, study the companies that are focused on your niche and of similar size. That’s where you’ll find the best ideas, and these are the companies you have to beat and buyout one day.
How To Find Your Closest Competitors
The process is pretty straightforward:
- Search Google, Bing, and Twitter for companies selling similar products and/or targeting the same keywords as your company (excluding the big brands like eBay, Amazon, etc. of course)
- Ask your customers what forums they like to read, what Facebook pages they like, etc., and then study these forums and pages for mentions of other companies that sell what you sell.
- Check out the SEMA membership directory and look for companies in your niche
- Ask your vendors and suppliers who they think of as your competitors
- Try using SimilarSiteSearch.com and SEMRush to identify competitors (only remember that these are automated tools…they’re best used to make sure you’re not overlooking someone)
- Ask your customers what other brands they considered before they bought from you (this is key)
When you find a company that seems like they might be a close competitor, bookmark them. Like them on Facebook so you can monitor their page updates. Follow them on Twitter. Subscribe to their newsletter. Etc.
Additionally, you might consider creating keyword alerts for your competitor’s brand names on https://www.google.com/alerts.
What To Study When You Evaluate Your Close Competition
Generally speaking, the most important thing you can do when you look at your competitors is to focus on what they’re doing well (see “Sizing Up The Competition” in our 2-part series on marketing strategy). Too often, competitive evaluations turn into criticisms. While it feels good to point out that your competitors are bumbling idiots because (insert reason here), this type of analysis isn’t going to help you grow your business.
Instead, take note of:
- The quality and effectiveness of their marketing materials (imagery, layout, copy, etc.)
- The volume and type of marketing effort (are they doing mostly email, mostly PPC, lots of blogging, lots of Facebook posts, etc.)
- The types of “pitches” they’re making…are they talking about their quality, their low prices, their commitment to racing, etc?
- The customer response to their marketing, at least on social media. What are people liking or commenting on? What’s getting mentioned or linked? etc.
The big take away here is to focus on close competitors only, and to accentuate what these companies do well. This is key to helping your company grow.