Learn from competitors to avoid mistakes and spot opportunities
Gaining an insight into how your competitors do business can be incredibly useful for SME leaders. It doesn’t just help you avoid making the same mistakes – it can reveal gaps in the market you might have missed.
These days, it’s easier than ever to keep track of the competition. From social media feeds and comments to platforms like Mumsnet to reviews on Trustpilot or Which?, businesses don’t have any excuse to be out of the loop.
The information is particularly powerful because it hasn’t been put through your company’s filter – you can find out exactly what customers are thinking. But be aware, competitors are likely watching you too.
“Today’s consumer isn’t on autopilot and is more conscious of what goes into their products, how sustainable they are and how socially responsible the brand is."
Afsaneh Parvizi-Wayne, co-founder, Freda
See where competitors are going wrong
Realising that many key players in the market were not catering for the modern conscious consumer, Freda adopted an ethical business strategy. This approach is challenging larger corporates that control the market in tampons and sanitary pads.
“Competitors are part of each company’s learning curve. Look at them, not to copy what they are doing, but to avoid what they are doing wrong,” co-founder Afsaneh Parvizi-Wayne said.
When you’re one of a few pioneers in a particular sector, learning from competitors is a great way of getting a steer on a market.
“It’s not so much about replicating your competitors, but about analysing the feedback or reviews they are getting on social media and seeing where they are going wrong,” she said.
Lessons from related markets
Learning from direct competitors is a no-brainer for any successful business. But keeping track of related sectors can also yield important lessons.
Afsaneh said she closely analyses businesses from related markets such as beauty, fashion and food. As feminine care is lagging behind other parts of the health and beauty sector, non-direct competitors can offer insights into future trends.
A pivotal lesson Afsaneh learnt from big and small brands is not just to pay lip service to issues like ingredient transparency and social purpose.
“Today’s consumer isn’t on autopilot and is more conscious of what goes into their products, how sustainable they are and how socially responsible the brand is.
“Consumers know that cotton-like comfort doesn’t mean it’s cotton, and they’re also aware that issues like period poverty cannot be solved by brands paying celebrities to encourage the purchase of their products in return for a donation,” Afsaneh said.
Don’t lose track of your vision
While monitoring competitors and associated markets is an integral part of Freda’s strategy, the company does not allow it to cloud its vision.
By staying true to its ethical values, Afsaneh said the company is able to delve into the mindset of a new type of consumer. Living up to the expectations of the new conscious consumer ensures that Freda continues to stand out in a market dominated by bigger companies.
The result of this shake-up is that big businesses are increasingly looking to SMEs for lessons.
“Very interestingly, it’s the big brands that are learning from startups like Freda.”
business size: 10-49 People
business type: Health & care services
Top three takeaways
Analyse the strategy of your competitors and study their reviews and customer feedback. The mistakes of other businesses can be valuable lessons and might even reveal gaps in the market.
Keeping an eye on related markets will help you identify industry trends, as well as best practices that apply to your business.
While it is important to watch other companies, don’t try to replicate or obsess over what others are doing. In many cases, bigger companies will be looking to SMEs for inspiration.