Industrial espionage, where one gains inside knowledge of a competitor through covert, unethical, or patently criminal means, has long fueled both fictional thrillers and real-life corporate scandals. Such unauthorized spying must be roundly criticized and earnestly avoided for obvious reasons, including one that's perhaps not so obvious—it's often unnecessary. That's because studying your competition's public marketing and advertising provides plenty of valuable insight into how a business can differentiate its message. And in a crowded marketplace where many companies offer similar types of products and services, this due diligence could make the difference between success and failure.
"It's really important [to see] the way [your competitors] position themselves, either based on culture or certain specialties," says Jennifer Seidel, executive vice president, agency relations and education, of the American Association of Advertising Agencies. A simple thing like understanding the way a business rival compares its advantages and unique selling proposition to yours can help you adjust your message to greater advantage.
Seidel admits that it can be challenging to get your hands on the pitch material that an advertising agency gives to a perspective client. However, she notes that checking out your competition's website, following them in the news, and looking at their marketing campaigns are excellent first steps. Another way is to sign up for their marketing channels to get a steady stream of their promotional material, whether it's direct-mail pieces, catalogs, or digital correspondence.
Putting the information to good use
So what can this information gathering tell you?
"I'd want to know what [my competition] is offering in comparison to what I'm offering to my present customers," says Ned Clausen, president/executive director at Business Marketing Association of New York. "See if they're trying to undercut the price relationship you have with your customers."
Checking out your competition's marketing and advertising phraseology can reveal strengths or weaknesses in your own messaging. "Maybe yours is not as exciting," Clausen explains. "You have to evaluate how you make your pitches, too, to keep a high level of interest in existing customers and prospects."
Where your competition markets is just as important as how they market, Clausen adds. For example, if they have a robust social media presence, while you've been reluctant to dip your toe in those waters, then you may need to promote in the channels that are now in greater use.
Surveying your own customers can also tell you what their feelings are, not only about your product or service, but about your competitors as well. "Asking your customers what their friends and acquaintances are doing [to gain] information about products can be very revealing," he says. "It doesn't even have to be your products, but in general."
Looking beyond the obvious
Beyond these markers, there are other subtle things that make a competitor stand out from the pack. Seidel of the AAAA points out that some companies have achieved success by positioning themselves as women-owned or having a multi-cultural staff.
"By looking at all aspects of a competitor's business—the make-up of their executive team or the number of people who work for them—you can get a sense of what you might be doing [to] stand out from everyone else that's a little bit different," she says.
Networking at industry events, asking questions, and sharing experiences is a fertile ground for collecting market intelligence. "A lot of what really goes on [at these events] is not going to be ever officially posted or presented. It's going to be more in the details," Seidel says. "So if you talk to a lot of people…you can get much more of a sense for what goes on behind the scenes."
After you've identified the successful parts of your competition's marketing, the temptation is to take it as is and duplicate it for your own efforts.
More often than not, however, this approach backfires.
Both Clausen and Seidel say it's imperative that your marketing stays true and consistent to your company's mission or vision. The smarter course of action is to understand exactly what makes your company unique and to build on that, making strategic adjustments along the way.
Indeed, knowing what not to do is as important as what to pursue.
Doing this research is fine and good, but these experts warn of another hidden danger: spending all your time watching the competition and not tending to your own goals. "If you're swayed by every piece of information or any noise that comes from outside your own company, then you're going to get really distracted and unfocused very quickly," Seidel cautions.
One of the best ways to thrive, the experts say, is to find areas that are not being served by the competition and embrace it as your own. "A small business should differentiate its customers and not take them as a blanket group," Clausen says. "That will help them fight the competition."
Brownie points for paying attention
When Shawna Lidsky co-founded Vermont Brownie Company almost four years ago, she had about ten names in her database, made up mostly of family and friends. Today, she says that number has grown to 12,000. In addition, the South Hero, Vermont, business has an impressive social media presence, with Facebook, Twitter, and YouTube pages as well as a blog.
As she was growing her business, Lidsky intuitively followed some of the advice offered by Clausen and Seidel without realizing it.
"I will definitely check out a competitor's website to make sure that our prices are in an appropriate range and to make sure that we're offering more in terms of options for people for corporate gifting," she says, echoing Clausen.
She also knew enough to spot something that worked for another business and see whether she could apply it to her own business, as the two industry insiders recommend. For example, when she found an intriguing gift certificate offer, she adapted—not copied—it for her own product.
"It's not about seeing a discount and then offering the same thing," she says. "Just because their product was successful doing it a certain way doesn't mean it's going to be successful for your company. You have to be sure that it works for you."
While Lidsky knows when to imitate, she also knows when to block out the competition, follow her gut instincts, and stay focused on making her product as good as it can be, as Seidel suggests. Stealing a page from the experts' playbook, she has taken important steps to differentiate her product and draw on the unique culture around her. Her whimsical sheep logo, for instance, helps convey the self-described fun, down-to-earth goodness of her gourmet product and where it comes from. (At one time, Vermont had more sheep than people.)
"What makes our product unique is the focus on local ingredients and our packaging," she says. "People love our little sheep. A huge part of our marketing is also just being Vermont Brownie Company. People inherently feel good when they buy something from Vermont because it represents quality. We use wholesome, all-natural ingredients, [especially] any that we can source locally from Vermont. That's an integral part of what we do and what sets us apart."