How to Collect Profitable Ideas from Local Competitors
3 min read

How to Collect Profitable Ideas from Local Competitors

Why would you need to spend any time at a business just like yours?

If you wanted to see inside one, you’d just head over to your own.

You have the keys, right?

And you spend enough time there as it is anyway. Well, there is a very good reason and the fact that very few business owners and managers do it is exactly why it works.

If you’ve ever wanted to improve your business, or just been short of new ideas, then taking the concept of a mystery shopper and applying it to your competitors could be for you.

What is Competitor Mystery Shopping?

Companies hire mystery shoppers to visit their businesses, online or offline, and act like a customer so they can collect data. You can think of mystery shoppers as "undercover customers" sent in to observe, interact and report on products, employees and customer service.

Here’s the idea:

You can take the exact same concept, but where you are the “undercover customer” and the businesses you are visiting belong to your competitors. By visiting your competitors at least every quarter you can collect data that will help improve yours. Information like:

  • Is my pricing in line with the market?
  • What new products are working in the local market?
  • What level of service is required in the local market?
  • How does my value proposition differ from competitors?
  • What small details are really impressive about the business?

Super valuable, right!

How to Effectively Implement Competitor Mystery Shopping

There really is a treasure trove of actionable information sitting at your competitors just waiting for you to collect it. Data and ideas that you can bring back to your business to make simple improvements that you can be confident will work.

It really is easy and it’s basically free. I hope I’ve convinced you to give competitor mystery shopping a try. If so, here’s how to do it:

Step 1: Make a List of Relevant Competitors

For some business owners this will be a simple matter of writing down the 3-5 businesses you complete with. If you have a clearly defined product or service, and serve a clearly defined local market then your competitors will be obvious to you.

For other businesses, it will be more complicated. Here’s how I like to think of competitors: if you were closed and your customers couldn’t come to you, where would they go?

However you need to do it, create a list of 3-5 businesses that are the most like yours.

Step 2: Organize a Visit to Each of Your Competitors

Visit all your local competitors or go to the websites of online competitors. If both are possible, then do visit the physical and online presences. Try to get a good feel for the experience:

  1. Go through the buying process
  2. Try the product or service
  3. Test out the customer service

Focus on the small details like advertising copy, packaging choices and the feeling they create for customers through service, ambiance and other design choices.

Step 3: Observe Key Details Relevant to Your Business

While there and going through this process, it’s simply a matter of observing the business and collecting the relevant data on products and pricing. Try thinking about:

  • What do they do well?
  • What could they do better?
  • What can I bring back to my business?

Use this information to bring improvement ideas back to your business. You can focus on matching their product and service, or setting yourself apart and beating them.

Here are some examples:

  • A restaurant owner I worked with hadn’t done a pulse of prices in his local market for years. His menu prices had been fixed for 5-years. When he visited local restaurants that were competing for the same customers, he noticed that their prices were 30-50% higher, depending on the menu item. He only decided to increase prices by 20-30% to remain affordable to his customers, but that meant a 20-30% increase in profit.
  • A friend of mine runs a local coffee shop. When we went competitor mystery shopping together he noticed that one local cafe would place a free miniature cookie on each takeaway coffee, and offer sparkling water to guests as they waited. It made wait times more enjoyable and added some joy to the coffee experience. He had a 25% increase in repeat customers, less complaints about wait times, and his cookie sales shot up!
  • A barber I work with noticed that one of his competitors had instructed all their barbers to book the clients next appointment at the end of their session. When he implemented this practice at his barbershop he noticed that the average time between appointments went from 6 weeks to 4 weeks. That’s 50% more business from the same number of clients, better utilization, and he spent less time looking for new customers.

Give it a try! I hope it helps.