Your compset, traditionally known as ‘competitive set’ is simply your top set of competitors. It’s substantially different knowing what a compset is and knowing what your compset is while backing it up with data. So, you have an idea of who they are, and surely you are right with some of them, if not most of them. However there are a few out there that you miss, and missing them could mean you are missing out on other opportunities as well.
Let’s start with a thought experiment. Think of all your guests the past year. Now think of all those who even considered staying with you, and didn’t, but did end up staying in your destination. Where did they stay? Now imagine your business is a bucket. Your potential guests comprise the water filling your bucket, and each competitor is a hole in that bucket that some of that water will leak from. If you were able to narrow down the 3-5 largest holes in your bucket, those competitors will be your competitive set.
Now that you have some sort of idea as to who they are you need to investigate further and it is imperative that you think within the larger picture. For example, the hostel down the street might not even make it to top 10 on that list, but the one on the other side of town could be sucking away your potential guests like a vacuum. So here are 3 tips on how to do so.
- Interview your guests: Make it standard check-in or check-out procedure to ask guests where they also considered staying and what influenced their decision? If that is too much, make is a standard procedure for staff to interview 3 guests daily and perhaps fill in a google form with the data you have access to.
- Do some research: Create some profiles of your prototypical guests that contribute greatly to your revenue. If you want to be fancy, you can call these your marketing cohorts (we’ll talk more about them later). Now pretend to be them, and live through the customer journey.
- Ask your OTA: You be surprised what your OTA buddy can offer if you just ask. You know that little box at the bottom of your booking.com page? That is your compset in their eyes based off their user analytics (see the image above for Freehand Chicago’s compset on that site. Ask your account manager for more details and an explanation. What about the other OTAs? Well ask them what they have. If enough people ask, it might motivate them to create something. Remember the OTAs should only be a part of your distribution, therefor their results should only be a part of the data you need.
Now that you actually have some data, you can narrow it down by sorting it to the top 3-5 repeating brands. Suprise! Suprise! You might find a hotel, airBnB house, or even a hostel in a different neighborhood that is in your compset that you have not considered before. Now if you connect these competitors in your compset to a cohort you created, you can start digging into their selling points and marketing efforts – yes you should follow them on social media and signup for their emails. You can now use this data to either adjust your product (ie. add a swimming pool, chill bar, daily events, and a kick-ass rooftop lounge) or change your marketing efforts to attract the right customers.
Is there a particular way you determined your compset? Help other hostel professionals by mentioning it in the comments below.