Call it what you will: market research, industrial espionage, or just straight up spying. Most business owners fess up to the fact that they have closely monitored a competitor to adjust their business model and determine exactly what they’re up against. We asked entrepreneurs across a variety of social networks how they went about observing a competitor and collected tips for others to do the same.
Here are the do’s and don’ts of corporate espionage as recommended by those professionals who have tried it:
I scout out where my local competitors are. Then I visit all those places.
Start by asking stupid, n00b questions and slowly steer things to what you want to know, occasionally misunderstanding, so they elaborate further.
Sounds simple, but, Google Alerts.
Meet them at a conference and played dumb. Once, a competitor spent 20 minutes explaining their entire customer acquisition process, sales figures, staff pay, package pricing motivation and a few other things. People like talking about themselves and often say too much.
I don’t announce who I am exactly, but I have no problem walking straight into the competition shops, asking questions and trying out products. If they asked me if I was in the same business, I’d be up front about it.
One way we conducted market research about other firms was to request copies of winning proposals when we are not awarded contracts. Some agencies and institutions require official public records requests but most will send bid score sheets and copies of winning proposals to all firms that submit proposals. Copies of score sheets indicate how well our firm ranked compared to other firms and copies of winning proposals allow us to better understand the strategies and pricing models of each of winning firm. We then use this information to revise our proposed work plans, pricing and target projects.
I used to be an online retailer selling mobile phones in India. We also had an offline presence. Given the low margins and competition, we would often order from competitors, go to their offices to pick products to see their setup and even try to supply them products to see what purchase prices they are comfortable with.
In my experience, the most valuable information typically comes from calling competitors sales teams to talk to them about their product or service, purchasing the competitor’s product or service, and speaking to past employees of their company who are willing to share an insider’s view.
I always do a plain old Google search on a competitor’s brand name, product names, and industry terms. We look to see if they’re listed and if they’ve put effort into their Google business listing with a map, videos, offers, etc. We check to see if they have they built a Wikipedia page. Next, we see if they have social media sites on the first page of Google? Finally, we use a tool called Spyfu.com to find out if they are spending money on paid search advertising. It is not exact but will provide a range of money spent and reveal how long they have been spending on online advertising.
I walked straight into my competitor’s store and purchased their most popular meal choice. My plan failed miserably because I realized their food was freaking delicious.
I’ve gone in, introduced myself and asked if they minded showing me around. No one has minded yet they are all friendly and unassuming. I send my competitors business often, and give them honest, glowing reviews when people ask about them.
We have called our competitors asking for price quotes using personal cell phones. Or called their service department feigning a problem with the equipment we both service. Just to check out their customer service, wait times, and pricing.
Of course, I’ve spied on competitors. If it’s to steal ideas or techniques, price points, or any other methods that could potential help me, I’ll do it. Everyone does it.
Especially in a small business environment, your goal should be to increase the market and demand, not to harm your competitors. In a small business community, you should work your hardest to generate leads and hopefully referrals and what better way to do that than by being friendly with your competitors. Not every business is exactly alike; They have differentiating qualities that will make them better choices than the alternatives.
I would visit a competitor if they were a public facing business, but I would never stoop so low as to do anything unethical or illegal. If you break the law, that would be a clear sign that it would be okay for them to spy unethically on your business as well.