How you position your company in the marketplace is very important. You should regularly review your competition and what they are doing, from what services they offer to how much they charge. You could find that a simple tweak to your business means the work comes to you rather than them!

There are a number of different ways to approach “competitor analysis” and a lot of marketing theory is available for you to read if you want to learn more. However, if you have never formally reviewed your competition before then here is The Design Mechanics’ handy 5-step guide for how to get started!

1. First, work out who your competition is

For many companies it is obvious who your competition is – it is another company down the road who, essentially, does exactly what you do. For others, it’s not that easy: you might not actually know who your competition is and you will need to find out.

Think laterally. How else would someone fulfill their need if they didn’t come to you? For example if you are a painter and decorator your competition isn’t just other decorators, it’s also people doing the work themselves. In this case you may need to base your marketing message around why people should use a professional instead of DIYing.

Also ask your clients who they think your competition is. Be open with them and use it as a marketing opportunity: tell them you regularly compare yourself to your competition to make sure you continue to deliver a great service at the right price! Ask your clients who else contacts them looking for their business – and if you have a good relationship with them ask if they would be willing to forward on any marketing they receive from other companies in your industry.

Once you have made a list of your competition it’s time to start looking at them, as unbiasedly as possible!

2. Collating information

From your list of competitors, pick out the top five companies that you consider to be your closest competition to look at in more detail. These days you can collect a lot of information from company websites (though note that websites can fall out of date quickly) but you should also collect examples of any marketing your competitors are sending out. Ask all your clients and contacts to collect examples for you and also subscribe to your competitors’ mailing lists. Use a fairly anonymous email address (set up a Gmail or Hotmail one) or use your home address or a friend’s address to sign-up for mail shots.

Some companies are very open and publish all their pricing and service information up-front, but make sure you always look a little deeper: read the small print to see if there are any hidden costs, check their case studies to see if what they have written match up with what services they say they are offering.

It may be that you can’t collect much information on a competitor without getting in touch with them, and we will come to how to “secret shop” in a couple of steps.

3. Analysing your chosen competitors

Start out with a spreadsheet (or if you prefer to work on paper, draw up a table) with the following criteria to assess your competitors against:

• How long they have been trading
• How many staff they employ
• Services / products they offer
• Price for key products / services
• Geographical region covered
• How professional their image is (1-10)
• What their local reputation is and what their reviews / testimonials highlight
• What their key marketing messages are
• What their target market is (what kind of clients they are aiming at)
• What marketing are they doing (radio, leaflet drops, etc)
• Any special offers
• One thing that the company does really well
• One real weakness the company has

Also, add any industry specific criteria, for example if you are a plumber, list which of your competitors are Gas Safe registered. Spend time to fill these out with as much information as you can find out and remember not to be biased – no matter what you think of your competition there will be things they are doing well else they wouldn’t be in business.

Once you have researched 5 or so businesses, then apply the same criteria to your own company. If you feel you can not do this dispassionately ask someone else to asses your company for you (again, a trusted client would be a good option here).

From just this initial exercise you will start to get an idea of how you stack up against your competitors. You may instantly spot a niche in the market, or all your competition may be offering a service as standard that you don’t or are simply undercutting you on price.