Years ago, when I was a department manager, and a graduate of the management training program at JCPenney, I would take my sales leads with me out in the mall, and we would shop the competition. We would go up and down the mall once a week and take a look at our competition. We would regroup back in my office to do a debrief on what we have observed. The conversation usually went something like this: “Did you see that store had 75% off everything? They must have had a horrible selling season!” “Did you see the store that was trashed? Stuff all over the floor, it was a mess!” “How about that store where all the employees were standing behind the cash wrap not helping a single customer?” At the end of our debrief, we felt pretty good about ourselves. We patted ourselves on the back and went on about our day.
I understood the theory of shopping the competition, but I totally misunderstood the strategy. It is easy to focus on the negatives, to pick out all the things your competitors are doing wrong, but that is not really helpful information. What the competition is doing wrong will not help you and your business to do better. The best strategy when shopping the competition is to focus on what your competitors are doing well. The purpose is not to copy them but to identify what they are doing well and use that as a spark of an idea for your business. There are 7 key areas to look for when shopping the competition.
Days/Hours of Operation What are your competitors’ days and hours of operation? Are they open earlier than you? Do they stay open later? Are they open on Sundays, and you are closed? If your competition is open, and you are not, your potential customers don’t even have an option of checking your business out. You may want to consider making a change to your days and hours of operation. Give it a try and track your sales performance and expenses for those extra hours. You may need to watch the results over a few weeks to see if this change makes sense for you and your business.
Your Competition’s Creativity What are your competitors’ sparks of creativity? There is a florist that sprinkles flower petals on the sidewalk outside their front door every morning. It doesn’t cost them anything because these are flowers that are past their prime and were going to be thrown out in the trash. The petals give a little pop of color on the sidewalk. It is so pretty. People get a smile on their face and a lot of people walk into the store because it’s so creative and inviting. What creative touches do your competitors do that can serve as a the spark of creativity for you?
Competitors’ Engagement with Customers How are the employees of your competition engaging with their customers? Every business is different and has its own unique atmosphere. Some businesses require a lot of engagement between employees and customers. Some businesses are more self-serve. Take some time to observe what happens your competitors’ businesses with how the employees engage with customers. What stands out to you? Notice how they interact.
Extra Value What extra value does your competition provide to their customers? What are the extra things that the customers get at your competitors? Do they provide education? Is there more information on the features and benefits of the products they sell made available to their customers? Do your competitors get involved with community events? Do they sponsor fundraisers or charitable organizations? Do they allow organizations to use their parking lot for local events? What are the things of value the customers get at your competition?
Technology How tech-friendly are your competitors? In this age of technology, all businesses need to stretch a little bit to get out of our comfort zone and embrace technology. What technology do your competitors use? Do they have a website? Do they have an app? What is their presence on social media? What can you learn about your competition and the technology they are using and how can you apply it to your business?
Pricing You need to be aware of your competitors’ pricing. What are they charging for their services and/or products? The goal is not to match your competitors. The goal is to understand what they offer for what prices and compare that to what you offer and for how much. Customers today are very savvy. Every business should assume their customers already know what the competitors offer and at what prices. If the customers knows this, you should too!
Differentiators What are your competitors’ points of difference? What makes them stand out? What makes you stand out from your competition?
Once you have gathered all this information about your competitors it is time to take a look at your business and start sparking some creativity. Brainstorm ideas on how you can do better. Do a SWOT analysis by taking a look at your strengths, weaknesses, opportunities, and threats. When you focus on the things your competitors are doing well you can link those back to your business to identify the areas where you can be better. That is how you shop the competition and use the information to build a recipe for success.
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