You know you have a great business idea. You know you have a great start-up team. You even know a great deal about your industry’s trends. But – how great is your knowledge of the competitive landscape you face? Will it be enough to successfully market your start-up at launch?
Most start-up teams answer this question with a resounding “Yes!” and yet they often fall into the trap of analyzing their competition solely based on product differences and innovations. Product innovation is often critical for success and should be a focus, however, history is littered with failed start-ups that had superior products but faltered marketing them within a competitive landscape. So, while your team is busy building a better mouse trap, your ultimate success still likely hinges on how well you know your space and how you plan to market your start-up within it. Luckily, we live in an age where it is possible to study your competition relatively quickly and cheaply—helping increase your odds of success without using up precious resources.
Many aspects of your competition may warrant analysis and your space may include a large number of competitors, thus it is critical to be organized as you attempt to better know your space. Before digging too deep, create a system for how you will absorb and track this information (Who owns this task? How is it reported/summarized?). People and organizations learn differently, but ultimately you will want to create “living documents” that display important variables and paint a realistic snapshot of the marketing strategies implored in your space. This exercise serves two important purposes. First, it helps you understand which strategies are working well in your space and which are not— information that can save your start-up a tremendous amount of time and effort. Marketing is not a perfect science and can involve a lot of costly trial and error. Your start-up will make some mistakes too but learning from others’ mistakes is free and gives you a great head start. Secondly, and perhaps more importantly, this exercise will help you identify opportunities for new marketing strategies in your space. Start-up teams often pride themselves on being innovative with their product development but fall short in tapping into that same creativity when developing their marketing strategy. The truth is marketing innovation can be just as important to a successful launch as product innovation. Look no further than the successful marketing strategies of Axe grooming products and GoDaddy.com – both of whom realized that, surprisingly, no competitors in their respective spaces were marketing to men using sex as a lure.
In terms of which aspects of the competition’s marketing strategies are best to analyze (aside from product development), I recommend the following to get you started:
Customer Trends and Demographics
Though this seems like an obvious aspect for a start-up team to understand about their space, one only needs to view a handful of business plans and their lofty projections to know that many entrepreneurs do not have a realistic understanding of the competitive landscape they face. While aggregate data from industry sites is very helpful, looking at web site data for particular competitors can reveal a number of important insights such as short and long-term growth rates, seasonality, bounces from large marketing campaigns or pricing changes, and changes in customer demographics. While this information is particular to the online channel, it still serves as a good proxy for understanding a competitor on the whole. Compete, Alexa, and Comscore are among those sites that excel at providing such data. Please remember, as with all research, it is best to use multiple sources if possible to confirm your assumptions.
From search and social media to direct mail and TV ads, today’s businesses have a plethora of ways in which to connect with potential customers. The marketing mix chosen by your competitors can tell you a great deal about who they see as potential customers, how they hope to influence purchasing decisions, and indicate the marketing dollars at their disposal. Companies often give clues about their marketing mix in their financial statements (if public) and presentations or during interviews with such sites as Advertising Age or Internet Retailer. A number of web sites estimate efforts within particular marketing channels, such as Wild Fire Social Media Monitoring, iSpionage, and Yureekah. It is also important to sign up for competitors’ emails and social media offerings. I recommend doing so via a single, team-shared e-mail /social media profile so that anyone on your team can log-in and quickly view all your competitors’ social communications in one spot.
Once you have your gathering and reporting system in place and start tracking competitors, you will hone in on the variables that are most important to your decision-making and your start-up team will become well-versed in the existing marketing strategies within your space. This knowledge will empower your team to make wise marketing choices when launching your start-up. Whether it is avoiding costly mistakes others have made, building upon proven strategies, or finding ways to bring innovation to your marketing efforts, if you really want to win the race… know your space!
Randy Brians is a Senior Online Marketing Consultant at Sparkplug Digital and is a member of the Strategy and Competitive Intelligence Professionals (SCIP) network. Randy welcomes questions and comments here or via e-mail at email@example.com