How To Track Competition

by JamesHope on October 1, 2013

You may have heard that you should learn how to track competition.  But that may not always be practical as it is a time consuming operation.

CompetitionAfter you start your business, it’s important to analyze your competition to keep track of their activities.  This is a key business function that is often ignored by many business, especially small business owners.  Often, the problem is they have no time to do it.  But when businesses do not track their competition they are leaving themselves set up for total annihilation by the competitor.  It’s important to realize that when a competitor takes action, they are going to do everything in their power to keep this quiet.  They may already have implemented a business boosting strategy that leaves other companies scrambling to try and catch up.  Imagine if you knew ahead a time what they are planning!

Competitors’ Vendors And Customers

Not everything will be readily available for others to see but there is much that still does get released to the public, usually through unintended consequences.  The competitors’ vendors and customers don’t necessarily have the same motivation to keep tight lipped on the business that they conduct with your competitors.  So if approached from another angle you could easily see how this could lead to the results desired.

Extensive Time Commitment

Getting back to the time it takes to analyze competition, the truth is it is quite an extensive time commitment.  Since most businesses are not in the business of spying on competitors this activity could take time away from core business activities that will actually improve the bottom line.  Competitive analysis is consider overhead by most businesses but that should not overshadow its importance.  This could be the single most activity that helps your business compete in the modern day business environment.  It makes sense because when a competitor initiates something and you know about it sooner rather than later, how much would that information be worth to you?  As you can see, it really should be approached less from a “competitive analysis is an overhead function” to one of “this can do more to increase my bottom line than most things we have ever implemented.”

Qualified Companies Are A Must

Outsourcing can help you reduce the time required to conduct a competitive analysis.  But it really pays to be selective in your quest for a qualified competition analyst.  This kind of service doesn’t come cheap as you can well imagine due to the complexity of the information being sought.  Posting an ad on Craigslist for such a service is almost guaranteed to get you mediocre results of which you’ll pay handsomely.  A better approach is to find a company that does this as their business function.  Make sure this company has the appropriate resources to get the job done.  You won’t mind paying a fee if you know you are going to get the kind of information needed to know what’s going on with your competition.

Half Down, And The Reminder Upon Completion

Never pay full price upfront for a competitive analysis.  A company should be willing to take 50% and then upon completion of the work, obtain the balance due.  This gives you some protection if they are not able to complete the job.  Overall you should not have trouble as this is a pretty high profile service and companies that perform it want to keep their reputations in tact.

If you are wondering how much companies like this charge, you need to consider the value of the information that you are getting.  The information is not necessarily easily to come by otherwise you would simply do it yourself.  It is very time consuming and the more specific you get with your request the more the company is likely to charge for that information.

Legal And Ethical Considerations

Often I hear from people that they feel this service is not even legal or ethical.  But in truth, the information is there for anyone to grab.  If a company doesn’t want information to be made available or to only selected people (like a membership) than they should protect the information and not let the public access it.  I’m sure your competitors would argue any information that you gather about them would be unethical but that’s just because they don’t want you to have a competitive advantage over them.  It’s posturing but there really is nothing at all about tracking what your competitions’ activities are.  In fact, healthy competition is beneficial to the competitors and to the clients they service as it keeps them striving to do better.

It should be established from this article that tracking competition is truly a necessary endeavor to keep your business going.  Without it, anytime your competitors do something that can benefit them and hurt your business, you can suffer greatly.  Selecting a company to handle this for you makes a lot of sense as it’s very time consuming and requires people that are knowledgeable in this area.