In business, it’s as important to know who your competitors are as much as who your target audience is. By knowing who the big and small players are in your respective niche, you can avoid pitfalls that they’ve experienced in the past, whether it’s a product flopping or a PR strategy that turned into a nightmare. Here are five other reasons why you’d want to know who you are competing against:
Predict Future Market Trends
Knowing who the legacy providers are in your market can give you a better sense of where the market is heading X years from now. Legacy providers are, essentially, companies that have been around for decades. How they adapt to changing customer behaviors and newly enforced regulations can shed light on where the industry, as a whole, is moving towards.
Narrow Down Customer Profile
Looking at who your competitors are targeting through their marketing campaigns simplifies this traditionally cost-intensive process. While it doesn’t mean you should completely abandon any efforts to better understand who your ideal customer is, it does give you a solid starting point from where to conduct your research.
Establish Realistic Goals
Knowing how much resources your competition has access to or how big a market share they control can help you set realistic long-term goals. It can be difficult to judge if a certain campaign or project is overly ambitious or underwhelming without a sense of what other similar businesses are doing.
Identify Your Unique Value Proposition
When you know what competitors are doing to draw in customers, it’s easier to identify your own unique value proposition. It can also be a way for you to determine whether or not you do actually have a value proposition to leverage in the first place. Identify what your competitors collectively fail to offer the market, such as lower prices, faster service, higher accessibility, etcetera.
Know Who to Do Business With
Without knowing who your competition is, you risk doing business with the wrong people. By understanding the scope of their market share, for instance, you can then start to plan future mergers or acquisitions.
Studying your competition can only be a benefit to your business. Take the time and the energy to conduct keyword research, create a competitive matrix, and use a SWOT analysis framework to narrow down who you are competing against.