What is competitive analysis, and why is it crucial to your brand?
Regular competitive analyses can be extremely beneficial to businesses from any industry, large or small. They offer insights into opportunities for innovation, growth, and promotion, and provide you with the guidance you need to consistently outshine your competition.
After all, no matter how innovative your product or service may appear to be, there’s a good chance someone else is already selling something similar. While having competitors in your market is a good thing (it shows demand for your solution), it also means you need to find ways to stand out.
When you conduct a competitive analysis, you can define the strengths and weaknesses of other businesses, and use those insights to fuel your own success.
A competitive analysis, also known as a competitor analysis, or competitor research, is the process of identifying core competitors in your industry, to learn from their tactics.
With a competitive analysis, you analyze your competitors, looking at the products, unique selling points, marketing strategies, target audience, and sales efforts. The information you gather can act as a point of comparison when you identify your own company’s strengths and weaknesses.
Plus, the information you gather from your competitors can help you to find new, more effective ways of reaching your target market, and increasing revenue.
Learning how to effectively identify your competitors, their strengths, and weaknesses, and the opportunities available to your business can be complex. However, a competitive analysis can be an extremely useful tool for increasing your market share. Used correctly, it will:
Knowing what to focus on when conducting a competitor analysis can be complex for new business owners. There are various guidelines out there that can walk you through the basics of running your own competitor evaluation. While strategies vary, most will include the following steps.
The first step in learning how to do a competitive analysis is determining who your competitors are. Think about where your customers would turn for a solution to their problems if they weren’t buying from you. A good option is to search for your product name or category in Google, or use keyword research tools like SEMRush and Ahrefs.
Make sure you pay attention to various different types of competitors, such as:
A significant part of any competitor analysis process is research. You can guide your research strategy by using a competitor matrix, or competitor grid. This is a table or spreadsheet you can use to organize all the data you collect about each essential competitor.
When conducting your research, you’ll need to gather information about:
Examining a competitor’s customers is an excellent way to determine whether they’re trying to reach the same audience as you, and whether there are any gaps you can take advantage of. Take a look at your customer’s mission statement, the messaging they use, and who they interact with on social media. You might be able to see some examples of current customers in their case studies too.
While you’re defining your competitor’s target audience, it’s also worth looking at how they’re committed to serving those customers. Remember, 59% of US consumers will leave a brand after a few bad experiences, so excellent CX is crucial.
Look at how your competitors support their target audience through the buyer process. Pay attention to the feedback and reviews they receive online, and use this information to help strengthen your marketing messaging.
The “Marketing Mix” otherwise known as the Four P’s can provide useful insights not just into your competitors, but how you can gain a competitive advantage over other brands. Understanding your competitor’s marketing mix means not just looking at their content marketing and social media efforts, but their full go-to-market strategy. Look at:
Finally, once you’ve gathered as much information as you can about your competitors and their strategies, the next step is a SWOT analysis. SWOT stands for strengths, weaknesses, opportunities, and threats. Your SWOT analysis should compare the activities of your competitors to your own marketing and sales methods.
Ask yourself how you compare in terms of:
Be as honest as possible with yourself when you’re assessing your competitors. Don’t overlook their strengths, or downplay your weaknesses. This will give you a more comprehensive view of how you can improve your sales and marketing strategies, and increase results.
Completing a competitive analysis is an excellent way to ensure you’re positioning yourself effectively in your chosen market, and leveraging the right sales and marketing methods. However, competitor analysis isn’t something your company should only do once.
Your competitors and your market will constantly change over time. That’s why it’s so important to keep a close eye on the landscape. Pay attention to up-and-coming brands in your industry. Leverage social listening and monitoring tools for customer insights, and track press releases and news reports relevant to your industry.
If you can stay one step ahead of analyzing the competition, you’ll also be able to improve your chances of outshining them in the future too.
Need help learning how to analyze and beat your competitors? Join the Hard Skill Exchange today to get advice and guidance from leading sales and business experts.