How to leap frog your competitors

Competition keeps you on your toes. To keep a step or two ahead means knowing precisely what rivals are up to. Few businesses systematically keep tabs on competitors yet such knowledge can give you a distinctive commercial edge...

So how do you do this and where do you start? Begin by building a file on them, looking at everything from the customer's viewpoint. Ask suppliers and employees what they know about the competition.

Direct competitors are easy to identify - they offer a similar product or service in the same way to your target market. However, you also have indirect competitors - people selling the same product in different ways, such as a business selling ferry tickets on the web instead of in a travel shop, or a company selling alternative solutions for the same needs, such as offering train or air tickets.

Here are some more questions you should also consider:

• What products and services do they offer? Do they overlap with yours and, if so, are your prices keen? 

• What customer needs and wants are they satisfying? Needs are different from wants: you may need a car but you may want a top of the range Mercedes. 

• Are their benefits powerful and attractive? What is their unique selling proposition? Do you have benefits and selling points in common?

• How do they position themselves? Are they top drawer or bargain basement?

• What's their tone? Avuncular and learned or rough-and-ready and brash and with it? Is their mind-set corner-store, High Street franchise or old establishment? How do you position yourself in relation to them? 

• What are their pricing strategies? What is included and excluded from the price. Are they exclusive and high-priced or a dime-a-dozen? How does this affect you? 

• Are they as passionate and knowledgeable as you? Or are they more in it for the high volumes, loss leaders or portfolio fillers? 

• How do they market themselves? What buying habits are they trying to influence and how are the going about doing it? Where do they advertise? What sales channels do they use - retail, direct mail, internet, wholesale? Pose as a prospect and get on their mailing list. 

• What is their sales literature like? How can you make yours stand out in comparison?

• How much does geographical location matter? The right kind of competition in close proximity can be advantageous - it lures more prospects to the area. If they are thoroughly inconvenient to reach, but still do well, what is their secret? 

• How good are their staff? Are they recruiting? If so, for what positions? Who are they hiring and why? Should you be considering enticing them over to you?

• What resources do they have in terms of finance and people? Are they growing, level pegging or declining? If so, why?

How to gather this information

Use the internet to get hold of credit reports on them. Find out how many employees they have, and what they do. For instance, do they have a maintenance department or do they outsource this?

Knowing your competitors' strengths and weaknesses and being realistic as to how you compare can be a real benefit when it comes to being the first choice for your customers. But you must also act on the information and ensure that your offering is the most attractive to your target market.