BBB advises business owners to get to know their competition

With the new year, a good resolution for any business owner or anyone planning to launch a business is to study the competition.

You may love your business or the products you’re selling, but having a 360 view of the marketplace is essential for success.

According to Indeed, a BBB Accredited Business, a competitor analysis is an excellent tool for researching your competitors, their audience, and their actions.

You'll be able to identify your competitors and get an idea of their marketing/business strategies. That will help you determine what's working for them and who their (and your) audience is, and hopefully discover some market trends or gaps.

Here are simple steps that should help. First, know your brand and your goals. Before you begin researching your competition, take a moment to define your brand by answering who you are, what your products and/or services are, and what you are known for. This will help you determine your customers' needs and your strengths/weaknesses.

Your direct competition of those who share your niche, location, and target audience. Challenge yourself to identify at least four direct competitors to research. Then, begin to collect the relevant data.

Identify and evaluate shared products or services. Knowing what your competitors offer gives you the inside edge on positioning your brand.

That can include products, price, promotions, mission statements, website design/usability, social media presence, and their area of operations, whether brick and mortar, internet selling, or both.

As you input this information into your analysis, begin to note the takeaways. Where are competitors succeeding? Where do they rate poorly? And most importantly, where do you see opportunities to improve?

Another critical step is to identify your target audience. A successful business involves knowing to whom you’re selling. You’ve likely already devoted some time to this research. Your analysis efforts should provide even more clarity on who is your customer.

This might be easier to glean from resources like reviews and social media posts, but do your due diligence to see who your competitors genuinely are reaching. Study their messaging, design choices, and how they connect with customers to inform how you’ll move forward in cultivating your audience.

Another tactic is to analyze your competitors’ marketing strategy. You can visit their websites to discover how they present their products or services and what resources they provide on their site. Also, check out their social media feeds to see what they're promoting, when they post and who they’re interacting with.

You also can review their advertising. Do you see trends in what they’re offering? What do their ads promote? What discounts and deals do they offer?

Customer reviews are essential to all businesses to see any recurring themes for positive experiences or any issues that have led to negative reviews.

Also, search online for press releases to see how a company communicates and wants to be presented publicly.

These will help you gain further insight into your competitors' actions and why. Based on their interactions and audience, you'll also get an idea of what is and isn’t working.

A competitor analysis not only will help you understand your competition but also help you better understand your market, your niche, and what your customers expect from you.

The good news? Suppose you'd like help with any of the tips outlined above. In that case, there are dozens of sources available to help you create and implement a detailed competitor analysis for your business strategy.

Investing a little time to understand the marketplace better can be insightful and pay big dividends to help make your company the best it can be.

• Steve J. Bernas is president and CEO of the BBB of Chicago & Northern Illinois. He can be reached at sbernas@chicago.bbb.org