Your competition is the other bars and restaurants with bars. Ignore your competition at your own peril, because as savvy bar managers know, what the competition is doing may have a big impact on your business. There are several things you will want to know about your competition:
Who are they? Look in your phone directory at the bars and pubs in your area. Review ads to determine which bars are your most direct competitors (either because they are close to your establishment or because they seem to be appealing to the same customers who will be visiting your bar.)
What are they like? Try to get a sense of the selection, quality, service, and atmosphere of each competitor (or each direct competitor, if there are very many bars in your area). Getting a sense of the competition will give you a chance to see what you need to do better or what you need to offer in order to lure customers.
Who visits them? Which customers does your competition attract?
College students? Businesspeople? Blue-collar workers?
How do they advertise? Look at the ads your competition runs and really analyze them. To whom are they meant to appeal? How effective are they? Where does the competition seem to advertise the most?
Often bars that are successful have already done the market research that tells them which ads bring in the largest profits. You can learn a lot about a successful ad campaign by looking at a successful competing bar.
What do they offer? Which drinks does your competition overlook?
Which drinks are hot sellers at competing bars? What sort of menu or
extras (gambling, live acts, jukeboxes) does the competition offer?
Knowing what your competition offers lets you know what you need to offer. For example, if every competitor offers draft local beer because it is a hot seller, then you need to offer it as well. From what the competition offers, you can also get a sense of what is missing. Do no bars in your area offer specialty coffees even though your market suggests some customers want it? Offering what your competition does not—and advertising exclusive availability at your bar—is often a good way to draw customers. You will know what to offer if you research both your customers and your competition.
What are they doing right? Bars that have been in business for a while that draw plenty of customers are doing something right. If you can pinpoint what that something is, you will have learned a key lesson about what it is that your bar needs to offer in order to draw customers.
Is the competition able to offer many specialty drinks? A great atmosphere? Super service? A wonderful location? A view? Special events? You can learn a lot from a successful bar—and then tailor what you have learned to your own bar.
What are they doing wrong? Try to figure out what the competition is not doing correctly—and then do it right at your bar. Is the hot bar in the city a beautiful place to drink but offers slow service? Offer speedy and friendly service as well as an attractive atmosphere and you will get plenty of customers to your bar. If you notice something wrong at a competing bar, chances are that customers notice too. They will generally be glad to visit a bar that offers a better experience. Don’t forget to look into bars that seem to be doing plenty wrong—the bars that seem to be empty every night. You can often learn as much from these bars as from the successful ones. If you can pinpoint what the failing bars are doing wrong, you may be able to avoid their fate.
What are their busy nights? What are the slow nights? Figure out what the “hot” nights are for the major competitors in your area. You may want to hold your own big nights on other evenings to avoid the well-established competition. You may want to hold smaller specials on the big nights to draw those customers who cannot get into the crowded bars.
What are the prices? Look at your competitors’ prices; they are what they are for a specific reason. Can you under-price them (and if you can, will that draw customers)? Can you offer something more? Your prices should not be very much higher or lower, but slight differences (up or down, depending who you are selling to and what prices you can offer) can make your bar successful.
There are several ways you can learn more about your competition:
Visit them. The very best way to see what your competitors are like is to visit them as a customer. Sit down at a competing bar, order a drink, and look around you. What is the bar like? How are customers treated?
Who is in the bar and how content do they look? What is the quality of the food and drink? What is the quality of the service like? Often the best research you can do on a competing bar is the research you can do with your own senses. Try to visit as many bars as you can before you actually start to set up your own. There is nothing like being a customer to actually let you see what works and what does not in nearby bars.
Talk to their customers. Do not be afraid to strike up conversations with your competition’s customers. Talk to them about the bar and ask them what they like about it, where they heard about it, and what they think of it in general. Do not try to sound like an interrogator; simply try to strike up a conversation to find out how other customers see a
particular bar.
Read their ads and press. The competition spends plenty of time marketing and advertising. Read what they have to say about themselves; you will be able to gauge what they offer and who they are trying to entice. You will likely find that some bars use very good marketing strategies that you can incorporate into your own marketing and advertising. You will also likely see some costly advertising mistakes that you can avoid.
Read guidebooks and reviews. Reviews online and in newspapers and guidebooks can give you a good sense of what others have to say about the competition. You can easily get another perspective on what a competitor is doing right or wrong. You can then use this information to do the same things right while avoiding the same mistakes. Reviews can also be a great way to tell what is missing. If your top three competitors get poor reviews for service and great reviews for atmosphere, then you can provide excellent service (and fill a need).
Even if you cannot hire the same expensive decorators, offering something that the competition does not can help ensure your bar’s success.