7 Ways to Study Your Restaurant’s Competition for Your Benefit

When considering competition, most business owners have a negative reaction. Your competitors are the bad guys who are intentionally trying to keep members of your target audience – your customers – from choosing you. When looking at the competition through that lens, it can be difficult to see how any positives could come from a competitor’s existence.

However, competition can be a positive for your business, from the right perspective. It is through competition that you can thrive, innovate and grow. Knowing who the competition is, what makes them stand out, and what people dislike about them is one of the best ways you can achieve a competitive advantage and begin to dominate the market.

Many restauranteurs believe their establishment already stands out from the competition. However, few do enough research to validate those feelings of superiority. By blindly assuming that there is nothing to improve, or that the only things to improve are those that are in response to customer complaints, they can lose out on the opportunity to take their place as one of the best restaurants in their city.

Trying to do what your competitors are doing but basically a little bit better is probably not going to be the winning strategy. The problem is finding what your competitors wouldn’t even consider doing. – Jamais Cascio

When researching your competition, you want to learn as much as you can. You need to know what they offer, how much they charge, what are a customer’s options for obtaining their food (i.e. delivery, take out, eat in), their marketing and branding strategies and tactics, any loyalty or perks they offer to customers, what their customers say they do well, and what kind of promotions they offer. Throughout the research process, you’ll want to keep track of any ideas you have, what your competitor’s strengths are, as well as what their weaknesses are.

Make a List of Your Competitors

The first step in studying your business’s competition is to figure out who they are. Start by making a list of restaurants near your location. You can also check online for restaurants that compete in the same areas as you. For example, if you are a diner serving American cuisine, you’ll want to look at any other restaurants that serve American cuisine, as well as any that provide a quick sit-down option.

You may not want to limit yourself to only your city. Many customers will travel nearby to high-quality restaurants.

Lastly, you can check the Better Business Bureau. Look for the top performing restaurants in your area, as well as new competitors who you may not even be aware of yet. By looking at the top performers and the latest restaurants, you can get a sense of what the newest trends are as well as what makes a restaurant thrive in your market.

Check out Social Media

Once you have your list, you can use the Internet to start your research and scope out the competition. Social media can be full of information. Look at each of their social media accounts and see how they promote themselves. You can also look at how many likes, followers, and how much interaction they have on their accounts.

This can be another way to rank your competition and see which the best are to emulate, especially if the Better Business Bureau does not provide much information. This step in the process may provide a lot of ideas for you to use to promote your own business. Be sure to keep track of those ideas so that you can implement them later.

Read the Reviews

In addition to social media, you can look for other online reviews. See what your local newspapers and magazines have written about your competitors. View review sites online such as Yelp. Make notes of both the positives and the negatives – each will be able to help you develop a competitive advantage.

Also, pay attention to how the competing restaurant reacts to reviews – especially from customers. Are they responsive to everyone? Do they come across as argumentative when receiving complaints? How can you use their examples to improve your own review responses?

Compare Marketing Materials

Online is not the only space where your competition advertises, though you should do a short audit of any digital properties like social media and websites that your competition has. Pick up local marketing materials such as newspapers, magazines and restaurant guides. See if you can find local flyers, coupon handouts, mailers, and other types of advertising. Looking at what your competition is doing well in restaurant advertising, as well as what could be improved, can help you shape a more effective campaign in your market.

Ask Your Customers

Talk to your loyal customers. Do not give them a long paper survey, but casually ask them where they go when they aren’t at your restaurant and what they like about other places. While this information is hard to quantify, it can be helpful.

Use this information to understand your own customers better. What attracts your customers to other restaurants? What do they like at other places that you could potentially utilize in your own business?

You can also uncover ways that your customers find out about other restaurants that you may not be aware of. Besides word-of-mouth, do they use apps or other forms of media? You can use that information to discover other places where you may want to advertise your restaurant in order to reach other customers who are similar to your most loyal ones.

Attend Local Food-Themed Events

Many cities offer food programs such as Taste of the City, or events focused on one particular type of cuisine. Attending these types of events can help you see, in real-time, what your competition is doing and what makes them stand out.

Again, you can ask your own customers for suggestions during the event. What do they enjoy the competition? What do they think you could do better? It can be hard to ask for this type of honest feedback, but if you can listen without taking the critique too personally, it can help your business grow exponentially.

Hire a Restaurant Consultant

Competitor analysis is time-consuming, and it can be difficult to be unbiased. Sometimes it can also be overwhelming to figure out what you should do, and how to prioritize those suggestions. Sometimes when comparing yourself to the competition, it can be too tempting to only focus on the places where your restaurant already excels.

In these types of situations, hiring a restaurant consultant may be helpful. A restaurant consultant will be able to perform a competitive analysis for you. They will help you understand the key differentiating factors that make your competitors stand out, and what you can emulate or even improve on. Restaurant consultants are also already familiar with the competition in your area. This means they will likely already have insight into where restaurants advertise and how they obtain customers. This insight may not be as easy for you to obtain, especially when you are already focused on running your own business.

Restaurant consultants can take their research and other insights to help make a plan. They will help you prioritize, and possibly even implement, the recommended changes. By developing a plan for you, you can more easily use the competition analysis to become one of the best restaurants in your area, without having to do as much of the research yourself.

Once you’ve studied your competition through different channels, or received insights from a restaurant consultant, you can use the different types of information to make improvements to your own restaurant.

Exceed the Positives

Take the things your competitors are doing well, and do not simply emulate them – excel (where possible). Do your competition’s customers appreciate that they can place a very custom order on a competitor’s website? You can build an ordering system on your website, and an app as well. Do customers love the fact that they get a free meal on their 10th visit through a punch card loyalty program? Maybe you can offer a free meal for every nine visits through a digital rewards program.

While it is not possible to exceed every positive you discovered for your competition, even choosing one or two can make a substantial difference.

Exploit the Negatives

Every business has areas where it can make improvements. Outperform your competition in the areas where they are weak. For example, if a competing restaurant has a lot of negative reviews about their employee’s attitudes and behavior, make sure you train your employees to be polite and positive. Offer training materials that teach your employees how to respond to negative feedback. Create policies for refunding money to customers and making mistakes right.

If customers complain about the wait times at your competition’s restaurants during the lunch rush, maybe you can simplify or streamline your own lunch menu so that you can become known as a quick (and delicious) option.

While there are downsides to customers having the option to choose restaurants that aren’t yours, you can utilize this competition to your advantage. If you pay close attention to what others are doing, you can use it to make your own restaurant the best it can be.

Jeremy Wells

Chief Marketing Officer, Longitude°

Jeremy is an author, speaker, and partner at Longitude°, with well over a decade of experience and expertise in brand strategy, business development, customer behavior insights, and marketing. His career has centered around helping leaders build influential brands by telling more compelling stories in order to connect on a deeper level with their audience.