4. Secret shopping
Just because a company sells itself in a certain way, it doesn’t mean this is how it delivers a service to it’s clients. If you really want to get an idea how your competition operates then you need to approach them as a potential client.
Go back to your list of five companies you have already assessed, and from your assessment pick the two that you would most likely approach if you were a potential new client. You may simply want to send an email asking for a quote on a job (remember to use your anonymous Gmail or Hotmail account rather than your work one, and give a mobile phone number not the office one else the game will be up!) or you may wish to phone them up and have a chat as if you were in the market for their service / product.
Now – I have to stress an ethical point here. Asking a competitor for a quote, or even going one step further and having an initial chat to see how they pitch is generally fine – it is a very common business practice and there is a high likelihood that competitors have already done this to you. However, you should never do anything that means that the company goes to any expense unless you are prepared to pay for it, so always say that you are talking to a couple of different potential suppliers and stress that you don’t want them to undertake any work until you decide who to go with.
Come up with a simple request / scenario. If you are pretending to be a new start business pick something you already know about – for example if you sail for a hobby, pretend you are setting up in business as a sailing instructor. If you are well-known to your competition or not confident in your acting abilities, ask a friend or relation to make the call or visit the company for you!
Be clear what information you want to gather. If you do decide to go for an initial meeting with the company don’t be scared to take a list of questions to ask, simply say your partner wrote it for you so you wouldn’t forget what to ask. You will most likely want to confirm their prices are as advertised and find out how they “sell” their service / product to you. It is also a chance to enquire about things that may not advertise such as payment terms and timescales as well as drawing them into a general chat about where their company is heading and what new services they may have in the pipeline.
Also note how long they take to respond to your initial enquiry (and how they respond) and compare this to your own company. You may find that experiencing your industry as a customer changes your views on it – it could be that their salesperson approaches a potential client exactly the same as you do, but when you are on the receiving end it comes over too pushy. You may find that your top competitor responds to a quote request in hours whereas you respond in days – in which case you need to change how you work!
There’s also the opportunity to secret shop your own company. Ask a friend to approach your company in the same way and report back to you how long your staff took to respond, how they presented your company, what promises they made etc.
5. Using the data.
Once you have completed your competitor analysis you then need to do something with it. Just by going through the above process you will have already come up with areas where your competitors are delivering better than you are, and will have highlighted changes you may need to make.
But also use the data to position yourself in the market. It may be that a side-line service you don’t really push isn’t offered by any of your competitors and should be expanded; or it may be that your marketing messages are no different to your competitors’ – it’s amazing how many different companies say the unique thing about them is “quality” and “service”!
Pricing is also important. Your competitors may be offering the same service for a lot less, in which case you need to either differentiate your product / service to make clear that you are offering something more, or find a way to deliver it for less. Just as bad is if you are charging too little. You can loose out on just as many sales if people do not perceive your service or product to be high-quality because it is too cheap.
Finally, competitor research should always be ongoing. Go back to the same clients every 6 to 12 months to see how they have changed their marketing, pricing and strategy. If someone is a close competitor, monitor them to see how they respond if you change your pricing or launch a new service. Don’t get annoyed if they copy it, but watch closely to see how they copy it. What elements have they really picked up on that you can then work back into your own pitch?
