Have you ever taken the time to get to know your competitors? Do you know whether your competitor is working on something new? Do you know what they are doing to be successful? If your answer to these questions is no, then you are lagging. Competitor analysis is essential for matching your competitors and also giving you that extra competitive edge.
When analysing your competitors, you need to be proactive so that you can find growth opportunities. In this article, you will learn how to conduct a competitor analysis that will hand you a competitive advantage in the current market.
What is Competitor Analysis?
Competitor analysis is the process of identifying businesses within your niche that offer similar products or services and evaluating them based on a set of criteria. An excellent competitor analysis will help identify areas in your business that you can improve. In other words, it involves researching your competitors to gain insights into their sales and marketing tactics. Competitor analysis comes with several advantages and allows you to stay on top of industry trends and ensure your business meets and exceeds industry standards. For you to succeed in competitor analysis, you must;
- Pick the right competitors to analyse.
- Know what aspects of your competitors’ businesses are worth analysing.
- Know where to look for the data.
- Understand how to use the data to improve your business.
What are the Benefits of Conducting a Competitor Analysis?
Competitor analysis is an essential step in the success of your business. Here are the benefits of conducting a competitor analysis.
Developing a Unique Selling Proposition
Why should people choose your company? The answer to this question is what separates you from your competitors. A successful competitor analysis will give you an insight into what other brands define as their “why.” A competitor analysis will help distinguish you from your competitors. The best way to do this is to compare their mission statements, products, services, and anything that your brand can leverage over your competition.
Improve Your Products and Services
One thing to note is that your customers’ expectations expand as your business grows. An excellent way to anticipate those expectations is to analyse both your competitors’ and your customer reviews. Comparing the reviews will help you tap into the market gap and anticipate your customers’ expectations.
Helps You Establish a Brand Benchmark
Benchmarking is the process of building a foundation for measuring your growth. A competitor analysis can help you unlock historical data that relates to how your customers view you. This information will help you understand your company’s growth and scale. Understanding your past and present will enable you to see where to make improvements and increase ROI.
Understanding Gaps in the Hiring Process
Besides customer feedback and customer-centric content, competitor analysis will also enable you to understand who your competitor is hiring. This will help you stay ahead of the upcoming trends your competitors anticipate, workplace culture, and other essential factors that customers look at when considering brand loyalty.
Helps You Discover Threats
Conducting a competitor analysis will also help you identify challenges that your competitors and the market face. This allows you to anticipate potential market changes, threats, and campaigns that can be avoided.
How to Conduct a Competitive Analysis
Now that you know why it is essential to conduct a competitor analysis, let’s dive into the steps you can take to complete a comprehensive competitor analysis for your business.
Know Your Competitors
The first step in conducting a competitor analysis is to identify your competitors. You must figure out who you are competing with so that you can compare their data. What works for a similar brand in your niche may not work for you. The best way to identify your competitors is to divide them into two; direct and indirect. Direct competitors offer products or services that could substitute yours and operate in the exact geographical location as you. Indirect competitors offer different products or services but can satisfy the same customer needs.
When conducting your analysis, only focus on your direct competitors. However, do not ignore your indirect competitors entirely because they can shift positions at any time. Additionally, keep them on your radar since the market can shift at any time.
Identify What Products Your Competitors Offer
After identifying your competitors, analyse their complete product line and the quality they offer. Take note of their pricing and whether they offer any discounts. Some of the questions to consider in this step include;
- Are they low-cost or high-cost providers?
- What is their market share?
- What are the characteristics and needs of their ideal customers?
- Are they using different strategies for online purchases?
- How does the company differentiate itself from its competitors?
- How do they distribute their products/services?
Analyse Their Sales Tactics and Results
Analysing your competitors’ sales process will give you an insight into how you need to prepare your sales reps. Most companies have annual reports, but you have to do some careful investigation to access these reports. Go through your Customer Relation Management (CRM) and reach out to those customers who prefer working with you. Ask them why they choose your products or services over others. Run a report that shows all prospective deals where there was an identified competitor.
Talk to your marketing and salespeople and ask them to implement a system that questions prospects who are considering other companies. Ask them about the features that attract them to your competitor. Ensure that your questions are open-ended so that you can have honest feedback. You can then use this information to scope your competitor’s marketing efforts.
Look at the Pricing and Discounts Your Competitors Offer
When pricing your products and services, you must look at a few things. One of them is how much your competitors are charging for a similar product or service. If you offer more superior features than your competitor, you can consider making your product more expensive. However, be ready to explain why your product is worth the additional cost. If you feel that the market has a gap for affordable products, you can charge less than your competitors. Always ensure that you price your product reasonably.
Also, look at your competitors’ offer perks and how you might match those perks to compete. Look for ways to match those perks so that you remain on the competitive edge of your business. Perks could be a reason you are losing customers. As such, consider matching those perks if it feels comfortable for your brand.
Analyse Your Competitors’ Content Strategy
Look at the quantity of your competitors’ products and the amount of content they have. Also, look at the frequency of the content. Do they publish new content every week or once a month? If you find a rich archive of content, the chances are that your competitor publishes regularly. You can use this content to identify some lead-generating strategies.
Do not forget to evaluate the quality of their content. Their publishing frequency will not matter if they have low-quality content since their target audience will not find any value. Choose a few articles as a sample instead of analysing each piece.
Also, pay attention to their images. Are they using stock photos or customised pictures? If they use stock photos, do they have overlays of text quotes related to their business? Are they sourced from an outside graphic professional if they have customised images, or do they appear to be done in-house?
Research What Technologies Your Competitors Use
Knowing what technology your competitor uses can help you reduce friction and increase momentum within your organisation. For instance, you may realise that your competitor uses customer service software. You can implement the same to earn more positive reviews.
You can use tools like Built With to identify what software your competitors are using. The tool is straightforward, and you only have to type the company’s URL into the tool, and it will reveal the technology your competitors’ site runs on and the third-party plugins. You can also look at your competitors’ job listings. This will mention what tools a candidate needs to be familiar with to qualify for the job.
Look at Their Social Media Presence
How does your competitor conduct their social media marketing? Do they include social sharing buttons on their website? Do they have links to their social media channels? If your competitors use social network platforms that you are not on, consider learning how that platform can help your business. Before you open an account with that social media platform, check your competitor’s engagement rates on that platform. The level of engagement will tell you whether the new social media platform is worth your time.
Look at the content they post on these social media platforms. Is the content focused on driving people to their landing pages? Do they post visual content for brand awareness? Such questions will help you understand how you can use social media to your advantage.
After conducting a competitor analysis, use this newfound knowledge to better your services. Conduct this analysis regularly to stay up to date with market supply and demand and increase your competitive intelligence. Conversely, find a professional marketing agency that can do all of the heavy lifting for you with accurate and extensive results.