“In business, the competition will bite you if you keep running; if you stand still, they will swallow you”, Victor Kiam.
In 2014, the American Express Small Business Monitor polled 661 Canadian companies having less than 100 employees. The poll results revealed that 71% of the companies excelled in customer service. It means that 71% of companies have their eyes on competitors and using customer service to be better against their competitors.
Though the sample size revolves around a particular country, it holds true for every market. Keeping an eye on the competition is essential to remain ahead of the game.
Here are 10 reasons why you should pay attention to your competition.
1) Know your Enemy
Sun Tzu is a 6th century Chinese philosopher who believed that to win any battle, it is important to have knowledge of the enemy.
The same idea holds true in the world of business. Always do a recon of your competitors. Conduct a research about direct and indirect competitors and analyse how their presence can influence your company.
2) Talent Acquisition
Your business needs talented people and what other place than your competitors is there to find true talent. Firstly, you are in the same business so their employee can easily understand your requirements. Second, bringing in staff from established firms adds prestige to your company and adds important vendor and client contacts.
3) Find Inspiration
Are you thinking about offering new product and services to customers but don’t know what? Look no further than your competitors.
The most costly facet of any business is to develop new products and profit centers. It takes time and money to research new ideas, determine its profitability, set up special manufacturing centers and sell them to existing clients.
However, look at your competition and analyse their existing product and service offers. You can build on those offers or create something more useful. The choice is yours.
4) Customer Retention
Businesses run with a loyal customer base. There isn’t much chance of your business surviving if it doesn’t have a loyal customer base. Apart from maintaining a proper customer satisfaction center, keep a tab on how your competitors are handling customers. If they are losing them, it is your chance to get them for your business, with better products and services.
Always remember that loyal customers are excellent marketing agents. You don’t want to lose them, ever.
5) Price War
Incorrect or correct pricing can break or make your business. Pricing is nothing but perceived value. Every product or service is valued based on its perceived usage.
For instance, a pair of jeans can sell for $5 and even $50. It depends on the purchasing power of the buyer.
Keeping a tab on the competition is essential to win the price war. Sometimes, a mere difference of few pennies can cost you customers. Therefore, if you and competitors are offering similar products or services, study the price range and offer the best possible pricing to your customers.
However, in a bid to undermine competition, do not reduce price too less that it impacts your profitability.
Endnote
Paying attention to your competition helps your business to function better. It adds dimensions to your business and enables you to understand the market in a better fashion.
On the side note, don’t get too engrossed in paying attention to your competition because someone somewhere is watching you too, so protect your business interests first.
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