Do you know what your competitors are offering your customers? If not, you can't be certain that they are not being lured away by other businesses offering a better deal. Good businesses thrive by understanding the market which they are in and this means knowing the competition. It might be a bit Machiavellian to speak of knowing thy enemy but there's much truth in the phrase for business owners.
The competitive advantage
Being aware of what the competition is doing has advantages beyond knowing what's on offer to your customers. If you operate in a market that is growing then winning business from your competitors could be your best expansion strategy. You can learn from your competitors by considering how they approach the market or the different types of customers they pursue and you can learn from their mistakes and avoid costly ones of your own.
Beware though, stealing confidential information is illegal and hiring an employee from another company in order to find out more about their business can also land you in hot water. Instead, stick to publicly available information and network with your fellow business people.
But once you have the information, what should you do with it? Be cautious about copying them too readily. You might be getting things right already while they are struggling. However, if you feel that customers are in danger of moving away then be aware that what a competitor is doing might be the reason.
Be sure to use the information you collect to be creative to stay ahead of the competition. Avoid being too preoccupied with collecting information or you could find yourself one step behind. Use the information to analyse the threats to your business and opportunities in the market. Information on your competitors' activities can help towards a simple SWOT analysis, for instance. This is where you list the strengths, weaknesses, opportunities and threats to your business. It helps you understand your own market position and highlights the potential for future developments.