3.0 Competitive Research

How to Start a Business >> Each section contains key Action Items located within the downloadable Action Guide >> Click to Download Action Guide.

Competition “validates” the marketplace and usually confirms that customers are willing to pay for a certain product or service.  Competition is common and researching your product or service’s industry will provide great insight on how to be more competitive in the marketplace.

3.1   Uncover your competition through competitive tracking resources.

The Internet has become the most efficient and effective source for researching your competition.  There are many great free and paid resources for research and each resource can provide additional information above and beyond the previous resource.

Conduct in-depth research to uncover the most important details to make informed business decisions.  There is nothing that beats “in person” competitive research, so if possible, walk into your competitors establishment and evaluate the customer experience.

Ask detailed questions.  Your goal right now is to uncover the best and worst possible scenarios for your business.  Your competition may look like they are doing well; however, they may also be on the brink of bankruptcy and you want to uncover those juicy details through your competitive research.

Time is of the essence.

This Action Guide provides step-by-step lessons to keep you focused on your specific task.  As you begin to conduct your research, be careful to remain focused on your primary goal of conducting competitive research for your new product, service or company.

Each link below in 3.2 uncovers a myriad of research content and it’s YOUR responsibility to remain FOCUSED and DISCIPLINED in your research.  The Internet makes it easy to “get lost” in content unrelated to your specific task.

Always ask yourself, “What is my SPECIFIC task right now?”

3.2   Is your product or service already on the market?

In other words, are other individuals or companies producing or providing similar products and services to the one you intend to offer?

Make sure to document similar products and competitors for your new product or service in your journal or other organizational system.  If you’re reading this Action Guide, you are most likely computer savvy and it’s BEST to begin digitally documenting all of your research.

Start simple by using a Microsoft Excel Spreadsheet, Word Document or other program to digitally record all relevant individuals and companies that are researched during this “discovery” period.  It’s very easy to begin by creating separate MS Word Documents relevant to each type of research that you are conducting.  This will enable you to keep a record of your research and provide you with the ability to copy and paste your research into other business planning documents. Additionally, you may be able to export your data into a database program at a later date if properly formatted.

As an example, to export data from Excel to a database program, one generally must keep all relevant data to one record on one row.  So, you would set up columns (top of document) with categories such as name, company, telephone, description, notes and other data.  Then, you must record all data relevant to one company going across one row under each appropriate column heading.  This will allow you to import your data into most database programs when you are ready to take your business to the next level.

If you have a software database program such as ACT! Contact Management, you can classify and record all relevant products, services, individuals and companies into your software program.

If you have a new invention, NEVER document using Internet-based databases, websites or other public digital systems even if it is your own private account and not open to the public. This qualifies as public domain “prior art” and may cause a patent application to be denied because it is now public knowledge.

ACTION ITEMS: Complete the Action Items in your Action Guide.

BEGIN researching your product or service industry now by utilizing your three to five word description of your product or service with the Research Resources below.

Start keeping a record of your research right now.

Research Resources

General Information

www.Hoovers.com (View free “Industry Overview”)

www.dnb.com

www.ThomasNet.com (Industrial Products and Services)

www.wikipedia.com (User generated content that may not be 100% valid)

www.allbusiness.com

www.411sbfacts.com (National Federation of Independent Businesses / www.nfib.com)

Search Engines

www.Google.com

www.Yahoo.com

www.msn.com

www.Ask.com

www.About.com

www.AltaVista.com

www.dogpile.com

Business Magazines

The following magazines are a great place to conduct research for your topic.  Begin by using the magazine’s “search” feature and input the three-word description for your product, service or company.  Be specific in your research and limit your time on each magazine’s website, so that you do not lose time reading numerous unrelated articles.

www.business20.com

www.entrepreneur.com

www.fastcompany.com

www.forbes.com

www.fortune.com

www.fsb.com

www.inc.com

www.success.com

Local Library

Reference Desk

Librarians can be extremely helpful in assisting with company research.

Request the Encyclopedia of Associations and locate your industry classification.

Contact professional societies and trade associations to learn about a specific industry.

Contact www.asaecenter.org to uncover a specific industry association.

Request Industry Reports, Trade Magazines and White Papers from the associations.

U.S. Patent & Trademark Office

Do not “get lost” in this site or you will spend hours on this website alone.  Again, your task right now is to uncover your competition.

Click on www.uspto.gov and then click “How To Search” in the upper right hand corner.

Now, perform three searches to uncover additional competitors in your industry.

Search Patents now → Issued Patents Quick Search → Narrow your search terms

Search Patents now → Patent Applications Quick Search → Narrow your search terms

Search Trademarks now → New User Form Search → Narrow your search terms

Each of your research methods in this lesson should have helped you uncover similar products and services in your proposed industry.

As stated above, competition validates the marketplace and you will always compete against other individuals and companies with similar products.

If you have exhausted all of the Research Resources above and you truly have not uncovered a similar product or service to the one you have in mind, then it’s time to begin 4.0, but keep in mind that everyone has competition.

3.3   Who is your competition?

Now it’s time to begin uncovering more detailed information about your competitors.

Begin first by researching their website.  You can dig up a lot of information about their company simply on their website.

Website Research

Do they have a list of their customers on their website?

Do they provide customer testimonials on their website?

Do they provide a list of their executive team on their website?

Do they have a company photo where you can count the number of employees?

Do they have partners listed on their website?

You can learn a lot by calling one of their partners and asking detailed questions.

Competitive Website Data

If the company that you are tracking has a high volume of website visitors, the following two resources provide excellent website traffic and website comparison data.  Take a look now.

www.Alexa.com

www.QuantCast.com

Competitive Company Research

The resources below are all excellent, however, they all cost money.  If you are a larger company or have deeper pockets, gaining access to this research will most likely provide all of the information that you have uncovered from the Research Resources in 3.2 along with a whole lot more in-depth content.

These services even provide detailed financial information about specific companies.

www.Hoovers.com

www.Thomsoninnovation.com

www.Thomsonreuters.com

Competitor Interviews

One of the easiest and least costly ways to research your competitors is by calling them directly on the telephone or visiting them in person.

You are now performing “competitive research,” which your competitors may do to your company one day.

When you call your competitor, I suggest requesting “customer service” and stating the following, “Hi, my name is first & last name and I’m researching the (your industry) _______ industry for a “self-study” paper that I am writing.  May I ask you a few simple questions about your industry?”

Ninety percent of the time they will just keep letting you ask your questions.  If you get a no, call back a little later and see if you can get someone else on the phone.

When you get a yes, you now ask the five most important questions from the list that you will generate below.  Since you’re speaking with a “customer service” person, these questions should probably be related to customer research.  Upon the completion of asking your five questions, you might see if he or she would answer just a couple more questions.

Additionally, you might ask to be transferred to the “Marketing” department or “Public Relations” department or even a “Product Research” department.  However, please note that these representatives will begin asking you questions too.

They might ask why you chose their company and you might simply say, “I believe (company) has a good reputation and innovative products, so I thought this would be a fun company for my research.”

If it’s a smaller company, they will be much more savvy and really want to know who you are and why you are asking these questions.

This information is designed to help you formulate decisions about the potential success of your new product or service.  What will help you better understand your product’s potential?

ACTION ITEMS: Complete the Action Items in your Action Guide.

IDENTIFY three potential competitors using the research methods described in this section. Take notes on what you learn about each competitor.

1)

2)

3)

RESEARCH – What additional information do you want and need to know about your competitor?  What financial data, trends or numbers could you acquire to build your projections? Write them here.

Customer Service

How many customers use your service?

How often do customers use your product or service?

What’s the average cost of your product or service?

What do customers like about your product or service?

Is there anything that customers do not like about your product or service?

On average, how long do customers stay with your company?

Has your company ever had problems with your product or service?

Describe your best customers?

Can you refer me to any of your customers for my class research?

Marketing or Public Relations Department

How long has (company) been marketing this product or service?

Do you plan to continue marketing this product?

Do you plan to upgrade this product?

Where do find your best customers?

How long does it take to acquire a customer?

How many employees work in your company?

Product Research Department

How many employees work in the research department?

Do you produce your product internally?

What’s the process to produce your product?

How much does it cost to produce your product?

Do you work with outside manufacturers?

Who are your manufacturing partners?

What type of costs do you have for your service?

Are there some aspects of the service that work better than others?

Prepare For Your Call

Copy and paste each of your most important questions onto a separate Word document or sheet of paper.  Place the document in front of you when you make the calls and then simply type or handwrite your answers to your questions while you’re on the phone with them.

Make sure you record the date and the company representative’s name on each call, so that if you need to call for additional answers you can ask for them again or avoid them if needed.

File your competitive research accordingly, so that it’s easily accessible

ACTION ITEMS: Complete the Action Items in your Action Guide.

CREATE your own questions for the types of information that is important to you.

3.4   How will your product or service outperform your competition?

Based on the research that you have now conducted for your industry and on your competitors, does it appear that your product or service can be produced to outperform your competitor’s product or service?

What features will be different about your product or service compared to your competitors?

What benefits will your customers enjoy more with your product than your competitors?

Based on what you have learned from your competitor, how will you change your product?

What can you do better than your competitor?

ACTION ITEMS: Complete the Action Items in your Action Guide.

EXPLAIN why customers will prefer your product or services over your competitors?

3.5   Will your product or service cost less or more than your competition?

Creating a product with a lower cost than your competitor doesn’t always make the product or service more competitive.  In fact, higher priced products and services can be “perceived” to have greater value than their lower priced competitors.

Your goal is to now package the information that you have learned into a format that will enable you to survey potential customers for your specific product or service.

Based on your due diligence and thorough research, you should now know many of the features and benefits of your product and service that are most desired and least desired by your competitor’s customers.  Will your customers desire the same features and benefits?

You should now be ready to begin customer surveys for your target market.

Next – 4.0 Target Market Research »