Do you remember writing a business plan?
Of course, you do. Without one, aspiring entrepreneurs would have to guess if their “big” idea is feasible. Business owners would also have a hard time getting loans or convincing potential investors without a business plan.
Now, a crucial section for business plans is market analysis and competition. To get funding, you need to show that you understand your target market. You also have to demonstrate that your product or service can compete with those already in the market.
But it doesn’t stop there. Analyzing competitor sales data, their distribution methods, marketing strategies, and so on is a continuous process. Here, we’ll dive into why understanding your competitors’ performance in the market is one key to growing your business.
The Benefits of Knowing Competitor Sales Data
Understanding your sales data can help your team identify new opportunities to pursue. Sales analysis can also provide your reps with insights about bad-fit customers, ways to streamline processes, and tap resources that maximize revenue and business impact.
This is only one part of the equation, though. Your team should also have access to competitor sales data. With a complete competitor sales analysis report, it becomes easier to identify gaps in the market that your products or services can help fill.
Or if your competitor sales data analysis report reveals that your competitors are doing better than you, you can use it to make some changes. Further investigation will inform you how you should take action. It could be anything from rethinking your pricing strategy to changing your suppliers to overhauling your customer service approach, and so on.
Some Tips for Doing Competitive Research and Analysis
A sales and cost analysis always starts with knowing who your competitors are. You have to find out what products and services they offer and their sales and marketing strategy.
Make sure you’re not ignoring indirect competitors. Their current strategies could give valuable insights for innovating your products or services.
If you feel your in-house team isn’t getting the full picture–perhaps their data collection methods are inadequate, or they’re not tracking important metrics–consider hiring a consultant. They could have access to tools or technologies that make information gathering and evaluation simpler.
Another tip is to work with an expert in your industry. If your company sells medical devices, for example, there are specialized consulting firms that can help. See here for more information.
Know Thy Competitors
To paraphrase Sun Tzu, knowing your competitors will help you know yourself. If you only analyze your sales data, you’re only getting half the picture.
You need to understand competitor sales data, plus other relevant information such as their marketing strategies, to know how to take action.
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