You Need to Spy On Your Competition to Succeed: Business Spying 101 Innovative entrepreneurs watch and learn from their competition. Here's how to do it inexpensively and make the most of what you learn.
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When asked what advice I'd give new entrepreneurs, I always offer one suggestion: "Borrow from the competition!" When building your business, there is no need to reinvent the wheel every time. That's right; I'm telling you to be a copycat. We see it constantly in trends: one company makes a terrific play, and soon everyone else is on the field. Some competitors do what works, while others take concepts and transform them to the tune of even greater success. Can a new or climbing entrepreneur employ the same tactics as those billion-dollar companies? You bet you can.
From childhood, we're taught to do our work, and people consider their ideas personal property, especially in the United States. So, is it ethical to copycat? Don't worry. Watching your competition is not only ethical, but it's also brainy.
It's not the same as plagiarism or espionage (definitely don't do those things!). Look at it this way: if your neighbor covers their flowers to protect them from frost, and you do the same, you're not stealing their idea. You're observing behavior that will save your flowers and choosing to employ it.
Start with real-world customer experience
There's more to learning from your competitors than doing what they do and hoping for the best. In fact, there is an entire industry around business "spying" — or Competitor Analysis — which includes sophisticated software tracking that goes deep-diving into the public domain SEO, website and social media information of your competitors. You might not have the resources for this intensive monitoring when you're new in the business game. Luckily, there are easy and inexpensive alternatives:
- Buy and try your competitors' products or services. Don't worry about contributing to their sales; learning what's happening is worth it. Investigate the websites, products and policies of your competitors and your own — and if the results hurt, take a deep breath and seize the opportunity to learn from your mistakes.
- Find out what it's like to be their customer. I hope that, as an entrepreneur, you pay careful attention to your buying experiences to learn what drives you crazy (phone trees, canceled appointments, unpredictable service, anyone?) or what you love (beautiful packaging, no-questions-asked returns, easy checkout). Go through the customer experience with your competitors to see if they fall into any of these traps or how they sidestep the worst of it. Learn about their guarantees and their return policy. Navigate their checkout process, noting what kinds of payment methods they offer their customers. See if they use any techniques that you've missed, such as bundling or cross-selling.
- Use their website. Compare their site's impact, ease of use, stylishness, FAQ, interactivity and personality — or lack thereof — to your own.
- Join their mailing list. If your competitor has a newsletter or website, join it discreetly (i.e., don't use your personal or business name!) and see what kind of content they offer.
- Set up a Google Alert to notify you of everything published daily regarding certain keywords you request. This will let you know when your competitors are making a move or launching a product.
Use what you find
The sophisticated "business spy" looks at their leading competitors and then, for each one, considers four different viewpoints:
What is my competitor doing better?
Granted, it's easier to notice what's "better" if you're looking at a competitor outperforming you. If that's the case, your job is to discover what they're doing that you're not.
Even if you're outselling them, don't assume you're doing a better job at everything. Sales numbers are a great way to keep score, but not everything is about money. Are your competitors beating you on customer satisfaction? Repeat business? Referrals? Subscribers? Is their product, service, support or follow-up better than yours?
What is my competitor doing wrong?
I have a novelist friend who told me she learns just as much about her craft from reading bad books as she does from reading good ones. When someone else makes a mistake before you do, it's your chance to sidestep that pitfall.
How is my company unique, and how can I combine that with their strategies?
It's almost guaranteed that someone offers practically the same buying experience as your business. That's what competition is all about. Copying another business's successful strategy is smart; finding a way to transform it to fit your business's unique character is smarter.
What benefits are they promising customers that you are not? Remember, benefits are the emotional rewards of a product, like status, pride or satisfaction, and benefits make the sale. Conversely, does your product have any benefits that theirs doesn't?
The ways in which you stand out from the competition give you a unique selling proposition — the thing that makes your brand yours alone — and it can be anything. You can even tout being "the most expensive" if you have the quality to back it up; because buying "the most expensive" of anything is a benefit to which specific niches will respond.
What if my business is the one being copied?
While you're spying on your competition, they're also spying on you if they know what's good for them!
Don't get angry when the shop around the corner (or around the server) starts a campaign or strategy very much like yours. This is both a compliment and an opportunity. It means that you're doing something correct and impressive. It also means they're running a test for you; their endeavors will let you see a "version two" of your strategy. You might learn that there are limits to your strategy or find a new way to expand it.
Finally, a good business leader watches other businesses across the board because strategies can jump industries and create significant new avenues. During the pandemic, I watched other industries that successfully weathered those tough times for ideas to keep my business, Hollywood Sensation Jewelry, financially afloat. Regardless of your niche, watching what successful companies do is wise. You never know where the next fantastic idea for your business will turn up.