In today’s rapidly changing technological world, small business owners need every advantage they can get. Relying on old, outdated methods of competitor research are just that: old and outdated.
You already know you need to keep an eye on the local competition.
The problem is that, until recently, accurate methods of researching competitors and monitoring local markets have been hard to come by.
This means small business owners have been flying blind and making business decisions without the information they need.
There’s a better way to research your local market than going undercover and scoping out competitors’ stores. Leverage tools designed to surface local market trends.
With data you can quickly see how your market and competitors are doing in less time than it takes to grab a cup of coffee.
There are few ways to approach competitive research
On one end of the spectrum, you’ve got the “Slugworth approach” (so named for Willy Wonka’s rival, Arthur Slugworth) where you go incognito and try to blend in with your competitor’s customers so you can scope out their business and glean some of their information.
On the other end of the spectrum, you’ve got the modern business owner’s approach, where you rely on technology to provide you a more precise picture than you’ve ever had before into how consumer spending is trending in your market and industry.
Obviously, we recommend the latter. As fun as a good undercover operation can be, that method of competitive analysis and market research is outdated, time-consuming, and costly. It also produces unreliable information.
With modern data and software tools, business owners can quickly get the insights they need to make more informed decisions. In fact, you don’t even have to leave work to see sales trends, revenue history, and how it all stacks up against similar businesses nearby.
What kind of information do you need? We’re glad you asked. 🙂 Let’s take a look.
Compare revenue on a daily basis
Revenue is more than one number. It’s the product of two other numbers: the number of transactions your business receives, and the average amount per transaction.
Multiply those together, and you have your daily sales revenue. Having a more detailed insight to your daily revenue, transactions, and average order sizes will give you a multi-dimensional view into your business and a more accurate understanding of how you compare and contrast to your competitors. If your revenue is down but transactions are up, for example, maybe it’s time to increase prices.
Track revenue trends week over week, month over month
Consumer spending in local markets can be unpredictable. In many cases, a day-to-day comparison isn’t the best way to track and measure growth. For example, restaurants are less about day-to-day comparisons and more about weekday and weekend comparisons. By comparing the progress you make week over week and month over month, you’ll know the progress you’ve made and where you might dedicate a little more attention.
Know how you rank within your industry
With a better understanding of your revenue sources and performance, you’re ready to see how you compare to other businesses in your industry. You can see how your revenue, transactions, and average purchase size compare against individual businesses in your category nearby.
This kind of insight shows you how well your business is really performing. Are you the best business in your industry for daily revenue, or are you the seventh? Where do you rank for the number of transactions or average order sizes? Don’t guess. Know.
Watch your local market’s growth trends
With modern technology, small business owners don’t have to wonder about the spending trends across their cities. They can see exactly how well the market is doing and how well their business is doing by comparison. See if spending has been up, down, or flat in your immediate neighborhood, across the city, or across the county. With an eye on your market’s growth, you’ll see if your sales are growing with your market, below average, or thriving where other businesses are lagging.
Hear what customers in your market are saying
Market trends will tell you how your business compares to the sales, transactions, and average order sizes, but those trends can’t tell you how customers are feeling about the businesses they patronize. Keeping an eye on your competitor’s recent reviews can. Just as you monitor your customer’s reviews and listen to their feedback, you can easily do the same with your competitor’s public reviews and ratings.
Measure and monitor from the comfort of work
Silly as it may seem, the Slugworth approach isn’t too far from reality for some business owners. Until recently, even tech providers didn’t have access to the customer insights and behaviors that help us make sense of local market trends. But now that we do, there is no reason small business owners need to go to those extremes to understand how they compare and contrast to their competitors.
As a small business owner, you deserve to know what is happening in your own market, and how your business performance relates to local spending trends. But you shouldn’t have to be a research analyst to makes sense of the trends in your neighborhood.
If you’re not already leveraging Womply to better understand your market and competitors, simply request a quick 15-minute overview from one of our small business consultants to learn how you can get started today.