Just 15 years ago, the thought of filing your taxes on your own would have been a rather daunting task—that was for specialists. Today, with automated tax software, anyone can file their taxes in a couple of hours without talking to a single person, let alone a tax expert.
Just like taxes, so-called “business intelligence,” or data about your business, customers, competitors, and local market, is no longer reserved for a select few specialists. Today, data is everywhere and easier than ever to use to your company’s benefit.
For decades, large corporations have used data to understand every aspect of their businesses, giving them an upper hand. It’s time for small businesses to have the same advantage—without the expensive teams and complicated software systems. Just as you no longer need to be a tax expert to file your taxes, you don’t have to be a data analyst to see how your business compares to competitors and where you rank in your local market.
We’ve talked about the information hidden in your transactions and how they empower business owners to understand their business and work smarter. Today, we want to take that a step further and help you see how understanding your business will help you get to know your competitors like never before. And you won’t have to step foot into their store to do so.
Your business isn’t two-dimensional, so why are your comparisons?
The only way to know how your business compares to a competitor is to measure them against each other.
It sounds obvious, but if you wanted to compare heights, you’d first need to know how tall you are. The same applies to scoping out your competitors.
While comparing our respective heights will give us an understanding of who is taller, it won’t tell us who can run faster or who is healthier or who can jump the highest. Comparing your number of transactions or revenue to theirs will give you a decent look at how had the better day, but it’s not going to help you understand why.
You need to be able to measure your business’s health across all dimensions. You need to go beyond your monthly transactions statement, your balance sheets, and your profit-and-loss reports. Comparing last week to this week or last month to this month is a good place to start, but it won’t accurately measure your overall business health. It won’t help you answer some of the most common questions you face as a business owner, like, “Today was a great day. I wonder why?” or “Today was unexpectedly bad. Are other businesses nearby experiencing the same thing?”
Which of these things is not like the other?
With the right tools and technology, you can get beyond a flat list of transactions or your company’s accounting reports and really understand the “why” behind sales trends. You’ll learn what you have in common with your market as well as what sets you apart.
For example, let’s say your business is basically identical to another competing one in your neighborhood, but their revenue is higher in the weeks and months after you got a negative review on Yelp. Understanding that correlation helps you get to the root cause, control what you can control, and increase sales.
That’s the beauty of data and information: you don’t have to guess. You can compare your marketing, business operations, local market trends to see what was different.
That said, there are a lot of variables to consider. Knowing how to find the right areas to measure is as important as knowing your own performance. Here are a few suggestions to get started.
See their business as their customers do
Many of the most important factors of your day-to-day performance stem from public profiles such as your website and online reviews on sites like Yelp or Google. The same goes for your competitors, and that information is public. You can easily find their hours of operation, see their online reputation, and read what their customer say about them. You can even see how they are marketing themselves.
PRO-TIP: If you want to see how a shopper sees you or your competitors, try shopping like one. Hop on your phone or computer and start searching for the products or services you offer. Visit review sites, company websites, and social media pages with the intent to buy, not just the intent to see what they’re doing. It can provide an audit of your marketing effectiveness, as well as theirs.
See how the local market influences them
If you want to know how good your good day really was, you need to know how good it was for the rest of your market, as well.
Are you the only shop that saw that boost? Is consumer spending up across the board? Sometimes you may think your sales are down, but it was slow for everyone in your neighborhood that week.
Every local market and every business experiences ups and downs. You need to find ways to see how those trends affect your community and your business. These are some of the more internal factors that shape a business, and while they aren’t as easy to come across as a Google search. And with the right tools, you’ll generate a snapshot that will provide a much better understanding of your competitors than if you walked into their store.
Don’t let data scare you
As you consider the variables that go into competitor research and understanding your market, it’s easy and natural to feel a bit overwhelmed. Remember: The thought of self-filing your taxes 15 years ago was scary, too.
You don’t need to be a data scientist or business analyst to understand your market, your competitors, and your business in ways that will have substantial impacts on your revenue, business operations, marketing, and customer retention.
Researching the competition and local market can be exhausting, time-consuming, and often it’s laborious. And, you might not even know where to find the data you need in the first place.
Womply Insights automatically collects all the data you need about your company, customers, competitors, and local market, and serves it up to you in a way that’s easy to understand. You can automate the research and fine-tune your business performance with just a few clicks. Request your free 10-minute consultation and see just how easy it can be.