Staying ahead of your competitors can be a challenge if you don't see them coming. Performing frequent market audits is one way to get ahead of the curve.
Market audits help identify potential threats before they become problems, and provide insights you can leverage to separate your business from its competition.
New companies and threats pop up every day that can affect your business—or worse, put you out of business. A market audit brings awareness to those factors, so you can address them.
The process also can be useful in identifying new opportunities for growth and stronger positioning.
Market Audits 101
There are two main types of market audits. General market audits look at external factors that could impact your business or brand. The second type is specific market audits, which evaluate a particular area within your business (for example, a product or service you offer).
The process of conducting both audits is the same: Look for positive or negative factors and assess their impact.
One way to determine which market audit is best for you is to start with the end in mind. What are your goals? What are your blind spots? Knowing these answers in advance can help you determine where to spend your time.
For example, let's say you own a technology company and one of your products is a software as a service (SaaS) product. You may find value in conducting a product market audit monthly or quarterly to make sure you're aware of any new competitors that have hit the market recently, to keep track of new technologies or to validate your pricing structure.
Then, you can use the data from these audits to update your product backlog or revise your product positioning.
Market Audit Focus Areas
Competitors can come from anywhere. There's the obvious instances where a competitor swoops in and begins stealing your market shares. But a competitor can also gain an advantage when you face a legal or operational challenge that eats into your profits or diverts your attention.
Performing a market audit takes into account both of these scenarios, and when performed frequently, can give you time to address potential problems before they have a big impact.
There are no rules when it comes to a market audit. Fundamentally it's about taking the time to evaluate different areas in your business. However, there are some areas you may want to keep your eye on.
Legal, Regulatory or Policy Changes
Legal, regulatory and policy changes are important aspects of a market audit because they can have substantial consequences if they're not addressed.
For example, the European Union recently passed the General Data Protection Regulation (GDPR) that tightened the rules for organizations that collect data on individuals within the European Union. The consequences of not meeting these requirements could add up to more than €20 million or 4 percent of your company's total global revenue, whichever is greater.
And that's just for one regulation. Legal, regulatory and policy changes happen all the time, and a market audit can help you identify the changes in advance so you can prepare for them.
Regardless of your industry, there's one competitor you'll want to keep an eye on—technology. Often underestimated, technology can impact your business in a variety of ways.
In some cases, staying up to speed with new technology can give you access to tools you can use to better your business. In other cases, technology can create a problem. Automated systems or new capabilities like virtual reality, artificial intelligence, the internet of things (IoT) and blockchain will impact different businesses differently, so when you're evaluating new tech trends it's important to do so with your business in mind.
Ask yourself, how can this help my business stand out? And how can this new technology negatively impact us? Answering these questions and more can help you plan ahead.
Customers change all the time. Staying current on their buying habits can help ensure you're nimble enough to adjust to their needs.
One way to do this is to evaluate your customers (existing and potential) frequently. You can do this by pulling industry research reports, conducting customer surveys or evaluating other insights you have on your customers and then assessing whether there's more you can do to serve them better than your competition.
Your Direct Competitors
Keeping tabs on your competition is a significant element of a market audit. A simple competitor analysis is one way you can do so.
If you don't already have one, consider creating a list of your top competitors. Start by listing out the top 30 to 50 and prioritize them based on the threat. Evaluate the top competitor on your list. Compare your offerings and take note of their progress, changes, pricing, positioning, etc.
If there are areas where you believe they excel, make it a point to address them internally. Or if there are areas where you are stronger, highlight those gaps in your marketing materials.
As I noted above, competitors can come from anywhere, and staying ahead of them can take work. These key areas are just a few that you may want to evaluate frequently to help ensure you're ready for anything.
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