We are now three more posts away from the end of the series (eleven market research related questions that a new business owner and founder should be asking). In this post we pick up the topic of competitors again and cover the questions "Who do the competitors sell to? What are they offering?"
In last month's post we defined which businesses are considered your competitors. As a recap, direct competitors are those businesses that offer products or services that can be viewed as a straight swap or substitute for the products and services you sell. On the other hand, indirect competitors offer products and services that solve the problem(s) of customers, but are not necessarily straightforward substitutes for the products and services you sell.
As a business owner you should be assessing your competition continuously and monitoring the market for existing and new players in your industry. Easily accessible sources of information about competitors can come from competitors' own websites, their social media sites, review sites, blogs, press and forum sites. Market research is another avenue that can support you with an understanding of your target customers and your competition.
To do competitor assessment yourself, you can employ some of the questions and techniques, that you applied to your own business, to your competitors. For example, questions like these can be framed towards your competitors:
With what feature(s) do competitors' products respond to a unique pain point or frustration of a specific group of people? In other words, what solution(s) are competitors presenting to customers to meet customer pain points or needs? (Question 3 in the series)
Why would a customer buy the product of competitors? This is question 1 in the series - which asks you to assess the value of the offer versus other existing solutions in the market.
How will competitors' products fit into the lifestyle of their target customers? (Question 4 in the series)
Where do competitors' target customers shop? How often? (Question 6 in the series)
What forms of media do competitors use? (Question 7 in the series)
How do competitors target their customers? (Question 8 in the series)
After framing these questions and answering them about your competitors, consider where your business sits in relation to your competitors (i.e. benchmarking). From your analysis, decide what learnings can you take from your competitors as a result, and what actions you can make in your own business to increase the attractiveness of your products and services and your reach of your target customers/ target audience.
A previous example we looked at in this series was PayPal, who using a similar exercise of assessing and understanding the competition found learnings and took action. CEO Dan Schulman stated this about the company in a The Motley Fool article: "We can make it simple and easy for checkout. We can make it One Touch when somebody comes in. We have a scope of products and services that I'd say no competitor has right now." "...Users trust PayPal to keep their payment information secure, and that can be essential when a customer is visiting a merchant's website that they've never used before..."
Another example is BMW, who found that being committed to responding to customers within 24 hours and resolving issues within 5 days endeared itself to repeat customers and was a point of differentiation to its competitors. BMW set itself an objective to increase its repurchase and return service rates and outdo the competition.
Retaining the services of a market research expert will help in your efforts to validate assumptions you have about your target customers, your competitors and your target customers' perceptions of your brand versus that of competitors. This is through using a range of market research tools and techniques; for example, traditional techniques such as conducting surveys, interviews and focus groups. If you would like to hear more, please reach out via the Contact Form for a free consult call. I help owners of small businesses to be clear in communicating the scope of their offers and in identifying their ideal clients or customers.
Comments