We know there is nothing worse than doing everything right with your business, only to see your competition continue to grow while your company remains stagnant. Fortunately, by undertaking a competitor analysis, you can better understand your strengths and weaknesses, and find your unique selling point.
What exactly is a competitive analysis?
A competitive analysis is comparing what strategies your competitors are using in order to evaluate the strengths and weaknesses of different marketing approaches within your industry. It can help you determine potential advantages within your market surrounding a product or service and can also help you to monitor how competitors are executing tactics such as marketing or pricing.
Why does it matter?
Now that you know what a competitive analysis is, you’re probably thinking “but why does competitive analysis matter for me as a business owner?” The main reason is that you simply can’t compete without knowing your competitors and how to differentiate from them. It can help you for SO many reasons such as how to make more informed marketing decisions, identify industry trends, determine pricing or to find gaps in the market. Are we convincing you yet?!
So, how do I execute one?
Competitive analysis’ can vary hugely depending on what you’re trying to achieve. For example, you might do a competitive analysis around a specific aspect such as a website, or you might do a high-level look at the marketing approach as a whole. There are many different ways you can undergo a competitive analysis so we have put together a step-by-step guide that covers the basic concepts of competitive analysis:
1. Select 5-10 competitors
To identify relevant competitors to include in your analysis, start by searching Google! You ideally want a mix of competitors who sell similar types of products, market to similar and slightly different audience demographics, have a range of experience and have a similar business presence.
2. Create a spreadsheet
As you accumulate data on your competitors, it is much easier to keep it organised within a table or spreadsheet which can be updated over time. Different criteria which are useful to compare and contrast competitors include:
- Price range
- Product offerings
- Social media engagement
- Content used for lead generation
- First-time visitor offers
Psst – At the bottom of this blog, we have created a FREE downloadable template to make this much easier for you.
3. Determine competitor types
Once your spreadsheet is set up, start categorising your competitors to help better determine how they’ll relate to your business. There are 3 main categories for competitors to help you separate them:
- Direct/primary competitors. These are other businesses that sell a similar product to a similar audience.
- Indirect competitors. These are competitors which offer a high-end or low-end version of your product to a different audience.
- Tertiary audience. These are related brands that may market to the same audience but don’t sell the same products. You can view these as potential partners or future competitors if they choose to expand their business.
4. Identify your positioning/marketing strategy
At this step, really delve into your own marketing such as your social media, website, interviews, email marketing and your numbers for each mode of marketing. This is crucial so you can really differentiate yourself from competitors on social media and position yourself differently.
5. Determine competitive advantage and offerings
Once you understand everything there is to know about your competitors, take a look at their competitive advantage and product or service offer. Most successful companies have a point of difference compared to their competition. Make sure you take the time to look at your competitor’s goods and services and compare them to your own. You’ll want to learn their advantages and figure out how you can offer something better.
6. Understand how your competitors market their products
We all know marketing is the secret to the most successful e-commerce stores, however, most businesses fail to undertake a review of their competitor’s marketing. Here, you want to find out what offers they are promoting, how they are building and managing their contact lists and how they are distributing content online.
How do you find this out? By assuming the role of a potential customer and signing up for their newsletters, subscribing to their blogs, following them on social media, abandoning a product in the shopping cart or even purchasing a product. This is a great way to see interesting approaches your competitors are undertaking to attract customers and drive more sales.
7. Conduct a SWOT analysis
This is a competitive analysis that lists your company’s strengths, weaknesses, opportunities and threats. Strengths and weaknesses focus on the present and elements you control and change over time such as reputation or partnerships. Opportunities and threats are out of your control and include things such as the economy or market demand. You should aim to run a SWOT analysis annually.
For the downloadable competitive analysis template, sign up below!
This is a basic how-to for competitive analysis, please don’t hesitate to ask if you have any questions. Here at Daisy Digital Marketing, we can do a much more comprehensive competitive analysis to really help you get ahead of your competition. Contact us today!
