Build A Better Business By Spying

October 12, 2008

There’s lots of ways to build a better business. And you don’t have to rely completely on your imagination, or the advice of others. There’s plenty more tools at your disposal. And spying is one way to make your business better.

In fact, spying on your competitors is one of the easiest ways to build a better business. People do it all the time. Sam Walton of Walmart did it and he was proud of the fact.

Now I’m not suggesting you resort to illegal methods, or do anything to cause problems for your competitors – that would be completely unethical. And you’d deserve all the bad karma you’d get. The idea is to make your business better, not harm theirs.

What If None Of Your Competitors Are Better Than You Are?

I know a lot of folk who don’t spy on their competitors. They have the attitude that these businesses couldn’t possibly be better than their own. And that is one of the fastest ways to kill your business quickly. Never assume a thing and always believe that your competitors must be doing something better – until you know otherwise. And if they’re doing great things – be glad. You can copy the good things they do and build on them, so your business is doing better than theirs.

Build A Better Business By Legally Spying

There’s perfectly legal ways to spy on your competitors. You can call them or email them, to see how quickly they follow up and how fast they’re able to provide a solution to your problem. And if their prices aren’t on display to the general public, there’s nothing wrong with asking for those either. I know from experience that most will give you them, if they think you’re a genuine customer.

Gerald Ratner went one better than this. He called his competitors stores, told them it was head office and asked questions about what sales they’d done etc. They were happy to give him the info. And it’s not like he was lying to them – he was ringing from head office, just a different head office to the one they had in mind. And armed with all the information he’d gleaned from them, it was way easier to build a better business himself.

You can also try using the products or services of your competitors. So long as they’re not selling outrageously expensive stuff, you can write it off as a good investment. And if you really don’t want to keep what you buy, you can take it back for a refund, to see how good their return policy is.

If they have a bricks and mortar store, do what Sam Walton did – get in there and be a spy. Sam Walton used to use a dictaphone to record his findings. This is fine, if you don’t mind folk thinking you’re talking to yourself. Otherwise, use a notepad. And if you think you’ll be recognised, send someone else to do the spying for you.

Many years ago, when I was a Saturday girl, my boss would often send me to other stores to spy. It was a great day out. And someone as young as I was had no shame. I didn’t give a fig if anyone saw what I was doing. As far as I was concerned, spying was heaps better than doing “real work”. So, if you’re struggling to find yourself a spy, get someone who’s young and shameless like I was.

Here’s a few things to watch out for when you’re spying on another business:

Are they polite and efficient?

Are they offering good value for money?

How fast can they deliver?

Do they offer a guarantee?

Do they do what they promised to do?

How well do they deal with complaints?

Do they follow up afterwards to ensure you’re happy with your purchase?

Do they keep in touch with you and make sure you’re aware of any new products or services?

What products have they discounted? Many stores heavily discount one or two products, just to get folk through their door.

Be honest with yourself when evaluating your competitors. Your job isn’t to pick holes in what they do. What you’re after is to see how well they’re doing things in comparison to you and what you could be doing better. Are they far more efficient in some areas than you are? What can you do to improve? Are there some areas where they are similar to you? What can you do to build on your strengths in those areas, so you’re better than them?

Are there areas where your business is a whole heap better? How can you build on what your business has already and highlight this advantage as a major selling point?
Image Credit: Ira Mejías

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18 Responses to “Build A Better Business By Spying”

  1. Davina on October 12th, 2008 10:39 pm

    Hi Cath. So you were a spy eh? Well, I totally believe you’ve gotta spy on your competitors to find out what your unique selling point is; what makes you different from them.

    And depending on the type of business you are running it can’t hurt to make friends with your competititors and share a cross-referral service either. Banding together can increase sales opportunities by offering more choice to the consumer.

    Davina’s last blog post..Thanks, It Means The World To Me

  2. Stacey / Create a Balance on October 13th, 2008 4:32 am

    I think I agree with Rita, if I am understanding her correctly. :)
    You need to understand your competition to excel in business.

    Stacey / Create a Balance’s last blog post..How To Embrace a Money Recess

  3. Shamelle- TheEnhnaceLife on October 13th, 2008 6:28 am

    You make a great point. Good post. I added it to digg.

  4. Ricardo Bueno on October 13th, 2008 8:07 am

    When someone asks me about “social media and blogging for business”…how to get started and such…I suggest that they start by reading other blogs. Look at what other local bloggers are doing to brand themselves online. Get acquainted with the type of content they write, how they deliver it, etc. Then, determine if it’s something that you think you can commit yourself to (researching and posting).

    You can do these things while being courteous and respectful of your competitors and I would encourage you to be. Otherwise, it’s just not good for business or your blog! (At least that’s my opinion).

    Ricardo Bueno’s last blog post..5 Things That’ll Ruin Your Blog

  5. cathlawson on October 13th, 2008 10:46 am

    Hi Davina – you definitely need a USP, so you should be spying before you even launch. And I know it’s easier said than done but if you have a USP that can’t easily be copied it’s even better.

    Re: Cross referral is also a good idea and that doesn’t necessarily have to be with your competitors. You can do this with businesses who offer complimentary services to yours. You have to be careful who you do this with and how though.

    We set up a referral agreement with one guy and he tried to get customers we’d sent to him to use someone else for our part of the work.

    Hi Rita – I still don’t know what you mean re the red highlighted words. I’ve looked back and I’m not seeing them – maybe they’re showing up different in the States?

    That is true – even if you don’t have what someone wants – by helping them get what they’re looking for, they’ll remember you.

    Hi Stacey – it definitely helps doesn’t it? But you’d be surprised at the number of folk who don’t even try.

    Hi Shamelle – thank you for the Digg – it’s v much appreciated.

    Hi Ricardo – that is a good point. They really should be doing that before they start. I’ve spoken to folk re. blogging before and some of them actually assume it’s only a ten minute a day commitment. I wish.

    So – are you saying plagiarism, scraping and hacking are out then? :)

  6. Brad Shorr on October 13th, 2008 12:03 pm

    Hi Cath, The corporate world has a wonderful euphemism for spying on the competition – they call it benchmarking. It’s a very tricky process, because you have to decide which qualities of your competitors you want to copy and which you want to depart from. Like Davina says, you want to be unique, but you also have to attain a certain standard level of performance on the basics or your distinguishing characteristics won’t do you any good.

    Brad Shorr’s last blog post..Meet the Director of Keyword Engineering or Something like That

  7. Andrew on October 13th, 2008 12:56 pm


    Your discussion reflects a common sense approach toward business intelligence.

    Provided it is done within legal and ethical boundaries, the type of exercises you describe above should prove to be a valuable learning tool – helping to identify opportunities for improvement as well as any areas where your business has a unique advantage.

    In addition, the above exercises should help you prepare for a career in the CIA in the event that your business is not as successful as you had hoped.

    Furthermore, provided the products and services sold within your industry are not prohibitively expensive, then it may be a good idea to have a trusted friend act as a customer of both your own business and one or more of your competitors. That way, your friend can give you an impartial comparison between the quality of service provided by your staff with that provided by the opposition.

    Andrew’s last blog post..Socially Responsible Investing part 9: Does ethical investing compromise investment performance?

  8. cathlawson on October 13th, 2008 2:55 pm

    Hi Andrew – getting a friend or mystery shopper to try out both you and your competitors is a great idea.

    Hi Rita – I’ve disabled Kontera on comments. I’m obviously not seeing the ads you are and the ones I’ve seen so far have been irrelevant, so I doubt whether I’ll keep it.

    Ownership of comments is an interesting question. I would have thought it was the commenter who owned them. But apparently – a blogger was sued a while ago for comments appearing on his blog.

  9. cathlawson on October 13th, 2008 3:12 pm

    Hi Brad – Askimet keeps eating you now. True – you definitely want to be unique – not just a carbon copy of your competitors, or you’ll wind up competing on price only.

  10. Jim Gaudet on October 14th, 2008 1:28 am

    I like to get on their email lists and see what they are sending out. This helps see how they are marketing.

    Jim Gaudet’s last blog post..The Secret – Do you believe?

  11. cathlawson on October 14th, 2008 2:49 am

    Hi Jim – I do that too. That’s how I first learned to do newsletters and stuff. And it’s interesting to see who they sell your email address to also. But if anyone else wants to try I would definitely advise using a seperate email account. I kept forgetting to and I almost drowned in spam.

  12. Ari Herzog on October 14th, 2008 3:41 am

    Forget about corporate espionage; that can get you into trouble. Organizations SHOULD use social media to talk about their competition. Send your blog readers to other blogs. Share other coupons with your Twitter readers. Isn’t that what Obama and McCain are doing with their campaign ads, talking about the other guy?

    But more to the point… imagine you’re an auto mechanic specializing in German cars and someone pulls in with a Toyota; you COULD help the dude but would probably save both of you a ton of aggravation by pointing him to a more apropos mechanic.

    Turn that friendly competition into the online world, and you got something better than spying: you have eyeing.

    Ari Herzog’s last blog post..Be Aware of Your Computer and Online Security

  13. cathlawson on October 14th, 2008 5:54 am

    Hi Ari – I wouldn’t call the type of spying I mentioned corporate espionage. Not unless you start bribing members of staff to give away trade secrets or something.

    I think talking about your competition is a lot different in business, than in politics. If it’s friendly discussion – fair enough – so long as you’re not saying anything bad about your competitors.

    But, in what way would you use Twitter to talk about business competitors?

    I am curious, as I still don’t use it all that much. Often when I log on – most folk are talking about politics.

    It definitely is easier to see what your competitors are doing online. And I get what you’re saying about referring customers to someone who does similar work to you. But what about businesses who are your direct competition – selling the exact same thing as you?

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  15. Ari Herzog on October 18th, 2008 7:37 am

    Branding and knowledge sharing dictates if an entity is successful, everyone will know about it and talk about it.

    There’s a reason why most (un)educated people can name the founder of Microsoft but not the founder of the New York Times, despite the latter having a longer history.

    When Peter Jennings died, his employer ABC-TV wasn’t the only broadcast station that spoke about him, but so did NBC, CBS, FOX, the BBC, etc.

    Social media consulting firms routinely talk to each other, despite competing for clients. Restaurant owners always meet and talk shop and tips for success, despite competing for patrons.

    If companies are talking to each other or talking about each other, they are in a better position to applaud the competition. It already happens online, but not enough.

    Ari Herzog’s last blog post..New Media Communications Firm Misrepresents Itself

  16. Ari Herzog on October 18th, 2008 2:11 pm

    I never read that story to which you refer, Rita. And I wasn’t referring to any particular name as the NYT founder because, frankly, I don’t know the person’s name. But that’s my point. Who doesn’t know the connection between Microsoft and Bill Gates, but how many can name the association between, say, William Randolph Hearst, Joseph Pulitzer, and the primacy of the newspaper world?

    If Microsoft puts out a great object, Apple responds. Good or bad, Apple responds. And everyone else. That’s called talking about the competition. Now imagine if Apple praised a Microsoft product BEFORE Microsoft released it.

    Ari Herzog’s last blog post..New Media Communications Firm Misrepresents Itself

  17. cathlawson on October 18th, 2008 3:48 pm

    Ari – Does knowing the names of particular companies not have more to do with the way they’ve branded their company, as opposed to social media?

    For example, most folk associate Virgin with Richard Branson – yet few would be able to name the CEO if British Airways. I had always assumed that was to do with branding though – Branson was well known before the Internet was widely used.

    Also, if a competitor praised a product of mine before I actually released it then I would suspect industrial espionage – unless I’d given them that info already.

    I can see how competitors talking about each other can help in an industry that consumers know little about, to raise awareness of that industry. But I don’t really see how that relates to the original topic of keeping an eye on what your competition are doing, to improve your business.

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