Watch and Understand Your Competitors, But FOCUS ON BUILDING YOUR BUSINESS!
The first article in this series listed more than 25 tactics to increase your business success. I have used all of them. I started with nothing and didn’t get to college, so I know you can achieve maximum success, regardless of your education. E-mail me to get the first or any of the other articles in the series. Each one after the first takes a closer look at one of the tactics.
As business owners, sometimes we become obsessed with what our competitors are doing. Don’t misunderstand. Of course, you do need to understand your competitors and pay attention to them, but that does not mean you need to respond to everything they do. Nor should you ever let concern about them stop you from building your business.
Sometimes, however, you do need to get data about competitors. Not long ago, I was starting a new venture, renting salon suites and chairs to beauty professionals, and I needed to understand what competitors were doing to make sure that I entered the market with the right value propositions.
I could have hired a high-priced consultant and gotten the information I needed. Instead, I wrote an advertisement, placed it on craigslist, and found a retired businessperson with a market research background to help with me do a focused competitor study. This person cost $15 per hour and was delighted to help with the project.
We started by mystery shopping the competitors, both on the phone and in-person. We gathered all of the results in a spreadsheet and a short report. For less than $2000, I was able to learn a great deal about all of the Tarrant County salons renting spaces or suites.
I got copies of their leases, found out their rates, learned whether they provided towels, and discovered whether they charged tenants for washers and dryers. The study also showed me which of my competitors offered tenants free Wi-Fi and provided the answers to a litany of other specific questions about the competition.
With this data, I was able to build my value propositions in ways that make my salons more attractive to beauty professionals wanting to rent space. I learned what to do and, as important, what not to do by having the researcher do mystery shops and talk to leasing professionals and operators during site visits.
I knew the approximate size of the competitors’ operations from tax records and site visits, about how many vacancies they had, and what they were charging for rent. In some cases, I even heard which tactics they were using to find tenants. What people will tell you if you ask amazes me.
When I was running an auto salvage yard, I periodically mystery shopped my competitors because I wanted to know how we compared on metrics that matter. I gathered data on how long it took my competition to answer the phone. I sent someone to buy a small part so that I could see how the warranty each competitor offered compared with ours. I looked to see how neat their operations appeared. I gathered data to estimate sales volume and sales-per-employee, key performance indicators for salvage yards.
Another easy, low-cost way to monitor competitors is to set up a Google alert on their company name (easy to do at google.com/alerts). If they have an e-mailed newsletter for customers offered on their website, sign up so that you can see what they are sending to customers and how often.
I watched my competitors, but I did not obsess over them. I didn’t do something just because a competitor started doing it. More often, because I was peer benchmarking with non-competitive yards in other markets, I was the most innovative local yard. If you are interested in learning how to use this technique, I have written about it in Peer Benchmarking Groups: One Entrepreneur’s Story of Extreme Success.
Because I was leading the way, competitors had to decide whether to respond. Yes, I had an eye on them, but I didn’t let them worry me much. I stayed too busy planning, managing, measuring, and executing. You should too.
Remember only you can make business great!
Ron Sturgeon, Mr. Mission Possible, has been a successful business owner for more than 35 years. As a small business consultant, he can deliver wisdom and advice gleaned from an enviable business career that started when he opened a VW repair business as a homeless 17-year-old and culminated in the sale of several businesses he built to Fortune 500 companies.Ron has helped bankers, lawyers, insurance agents, restaurant owners, and body shop owners, as well as countless salvage yard owners to become more successful business people. He is an expert in helping small business owners set the right business strategies, implement pay-for- performance, and find new customers on the web.
As a consultant, Ron shares his expertise in strategic planning, capitalization, compensation, growing market share, and more in his signature plainspoken style, providing field-proven, and high-profit best practices well ahead of the business news curve. Ron is the author of nine books, including How to Salvage More Millions from Your Small Business.
To inquire about consulting or keynote speaking, contact Ron at 817-834-3625, ext. 232, rons@MrMissionPossible.com, 5940 Eden, Haltom City, TX 76117.