A tricky question for any business owner; when was the last time you intended to perform competitive analysis for your brand? And most importantly, do you use the right approach or know how to do one efficiently?
To establish a successful business, you need to add real value that helps you stand out from the competition. It will never happen if you know nothing about your competitors. That requires some knowledge of your competitors’ appearance and what they bring to the market.
You might not be sure if what you have conducted is suitable enough for your business or not. For example, you might run a quick perusal of a competitor’s social media presence or website, and you think it was an actual analysis.
You’re probably missing out on important intelligence directly affecting your brand growth.
However, no worries! In this detailed guide, you’ll learn the truth about competitive analysis and how to implement one that gives your business a competitive edge in the market.
What is a Competitive Analysis?
Every market comprises more than one company pitching the same or at least similar products or services targeting the same category of buyers. Therefore, competitive analysis involves defining your direct and indirect competitors using market research to reveal their strengths and weaknesses compared to your own.
Who are direct competitors? Any company that markets the same product to the same audience as you.
Who are indirect competitors? They market the same product but to different audiences or markets.
In other words, you can spot the leading market players, identify their strategies to succeed and uncover resources your company might use to dominate the market.
After identifying your competitors, you can make the best of the information you gather to know where you stand in the market landscape.
Also, we can define competitive analysis as an assessment of your competitors’ products, services, promotion tactics, and sales to evaluate what they have relative to your own.
It’s a good business practice that all successful companies are committed to conducting a complete competitive analysis at least once a year.
Because you always want to stay on top of the market and on top of what your competitor does. You need to find where you stand and where you should stand.
Indeed, this document should be part of your organisational discipline, like keeping good books on your shelf to go back to when you need them.
The ultimate goal of any competitive analysis is to draw conclusions that simplify the decision-makers’ job.
For example, suppose your analysis of Competitor X leads you to uncover a clear advantage in organic engagement. In that case, you may decide for the time being to direct some marketing budget to improve your paid media strategy to attract more customers.
Had you not implemented this analysis and taken the time to explore your competitors’ secrets, you may have invested a limited budget in a suboptimal fashion.
Why is it Important to Perform Competitive Analysis?
Is it possible to penetrate a market without having a competitive analysis?
Actually, no! Why?
Let’s dive into some of the whys conducting a competitive analysis will be game-changing:
- Helps you identify what your competitor is doing right prefect. You will have a reliable source to stay relevant and ensure your product and marketing invites are on the same page regarding industry trends.
- Enables you to discover your product’s unique value proposition. You may have a brilliant feature, but you need to know if it would significantly impact the market. This analysis will keep your eyes on what makes your product different from your competitors, which can direct your future marketing efforts.
- Has valuable insights from customer reviews to identify what’s missing in a competitor’s product. It will entice you to add features to your product to meet those needs.
- Revamp your marketing message to speak to your customers with the right style and language to let them feel you’re close to them.
- Provide you with a benchmark to measure your growth.
- Tells you where your rivals are falling short, which helps you locate areas of opportunities in the marketplace.
- Enables you to taste new and unique marketing strategies that your competitors have nothing about.
How to Perform Competitive Analysis
As we agreed, competitive marketing analysis is an ongoing process where you will scrutinise your competitors concerning what you’re offering. It’s the act of evaluating and examining every company in your industry and determining how they stack up in all marketing aspects; sales, messaging, promotions, etc.
But in the real world, how to perform competitive analysis.
- Know Who Your Competitors Are
It’s the first step if you want to perform marketing analysis. So, select between five to 10 competitors to compare against your business.
The competitors you choose must have similar products or services targeting the same area with a similar business model.
You can make a mixture of direct and indirect competitors to gain insights about how new markets might impact your company.
Make your competitors’ list combining startup and seasoned competitors. That’s how you can diversify your analysis.
Well, how can you find your competitors?
Use Google to search for the same product or service providers. Amazon also is an excellent place to start searching for your rivals in your market.
Also, many tools can help you find other companies talking about the same topic, which means they provide a similar product or service, such as Buzzsumo or Crunchbase.
The top results emerging while browsing any previous websites are likely your competitors. But if you target a niche market or have a startup, you may need to dig deeper into the rankings to discover your direct competitors.
Pro tip: Consider checking Statista for market share statistics in your region and industry to find your competitors.
- Build a SWOT Analysis
The SWOT format is the simple template of any competitor analysis. It is one way to organise insights gleaned from your overall perspective before diving into marketing research.
A SWOT is an acronym for strengths, weakness, opportunities, and threats. It’s where you can identify the overall performance of your competitors.
Some companies prefer to conduct the SWOT in an advanced stage. For example, to be able to fill each point of the document. But we suggest making it first to get you focused on what you want to gather from your research.
It’s like a competition overview to build your map in the different processes.
Also, it’s a great tool that will visualise how you stack up against other major players in the market.
So, once you have a list of several direct competitors, you can analyse their business which should cover the following information:
- Brand image
- Brand positioning
- Online assets (social media and eCommerce websites)
- Sales strategy
- Customer experience
- Product Features
- Services provided
- Pricing strategy
- Marketing strategy
- Discounts/Promo strategy
- Shipping service
- Content marketing strategy
So, where can you find answers to all these aspects?
Well, start asking these questions:
- In which areas is the brand very good? (If there are many areas, scale each one from one to ten)
- Why does this brand excel in these areas?
- Can you find any intangible assets (inspiring marketing message, memorable branding, a unique feature, and so on) that give them an advantage?
- Can you identify any experiences, processes or areas that need improvements (in terms of law engagement, online shopping experience, refund policy and so on)?
- What areas do they miss or neglect (have they a good Google rank? Do they invest enough in paid campaigns? What about search engine optimisation to drive organic traffic, and so on)?
- What can your company have that enables you to do better based on your current resources? (Consider these additional questions: Can you generate better, engaging messaging? Can you offer new types of content to enhance brand awareness? Can you provide a better customer experience?)
- Can this competitor represent a real threat to your business or subsite you (by offering free shipping, for example, or low prices)?
The final step in this process is to contrast the competitors’ weaknesses against your strengths. So, pay extra attention to any opportunities they are missing.
So, answer these two questions:
- Is there any way you can capitalise on their weaknesses?
- What are the market conditions for entry barriers?
Eventually, strengths and threats will help you better gauge what is going on internally and externally and prepare you to conquer the market effectively.
- Check Out Your Competitors’ Online Presence
You need to investigate your competitor’s online presence if you’re still wondering about the best way to perform competitive analysis. Evaluate how functional their websites are, asses how easy they are to shop or take a specific action on their site, and how frequently they engage with followers.
With the suitable tools to master digital marketing analysis and implement eCommerce strategies, you have an excellent opportunity to stand out among your competitors. Using an easy-to-use, brilliant and robust website is at the forefront of most companies today, but you can still find some weak points in your competitors’ assets.
Then you can take advantage of it and find the best way to connect with your customers on social media and other platforms.
And please note customer experience is one of the most decisive factors. It will determine if the customer will proceed with the order, take a creatine action, or search for another competitor.
According to PWC, 59% of US consumers will not forget about your brand after several bad experiences, and 17% will abandon it after only one fault.
Treat competitor research as an opportunity to fill the gaps in your business, especially in your online assets like website design roadmap or your content at all.
To help you make it right, follow these steps:
- Set your objectives: That means you need to know what kind of knowledge you need to obtain.
- Gather the right resources: When you’re talking about analysing your competitors, you need to have at least some basics such as your competitors’ websites navigation, their product catalogues, product listings on their websites, pricing plans, checkout experience if there are any, communication process, on-site marketing tools (affiliating, discounts, promo codes, coupons, and upsells), and shipping or finalising step.
- Use SWOT analysis: we don’t conduct SWOT to leave it behind. You can now use it to create assumptions about their buying habits. For example, are buyers placing the order through a message on social media or on the website?
- Choose the right tools: Gather more data about the keywords they targeted and how the volume of engagement. You can even use qualitative methods such as surveys and focus groups to evaluate their websites against yours.
- Conduct Competitive Marketing Research
To perform competitive analysis, you need to do in-depth market research. This step will include a mixture of primary and secondary research.
So, what is the difference?
Primary research comes directly from your customers or your company or product, while secondary research is information that exists for different reasons. In other words, primary research is compiled for your sake. The secondary is any external data you can use to build your strategy or analysis.
Then, you can create your research template to classify your findings:
To collect this data, consider the following:
- Interviewing customers or potential customers
- Examine your competitor’s online platforms (websites, social media, and any channels)
- Tasting out competitors’ products or services
- Identifying any technology updates
- Carrying out online surveys
- Holding focus groups
- Assessing the economic situation
- Reading your customer records
That leads us to the next and final step to perform competitive analysis.
- Explore How Your Competitors Market Their Products
Take the time to explore their marketing strategies and objectives. What are they trying to achieve with their marketing efforts?
Once you have a good understanding of their goals, you can begin assessing their strategies’ effectiveness. For example, are they using the right mix of channels? Are they reaching their target audience? What story are they trying to disclose? What is the real value they add to their customers?
By understanding your competitor’s marketing efforts, you can learn from their successes and failures. Use this foundation to improve your marketing strategy and position yourself in the market.
- A competitive analysis is a strategy that includes researching major competitors to catch insights into their products, marketing tactics, and sales.
- You can gain many benefits from conducting a marketing analysis, such as implementing stronger business strategies, capturing market share, and warding off competitors.
- Competitive analysis helps you explore the ins and outs of your competitors, how competition works, and spot potential opportunities and threats.
- You will be able to know areas where you can outperform or where you should avoid because of fierce competition.
- Competitive analysis will enable you to stay atop of any trends and make sure that your product is constantly meeting or might be exceeding your customers’ expectations and industry standards.
- Actually, a competitive analysis can (or should) be applied to every facet of your brand. But you can focus on digital marketing and then take notes to direct other departments. So, if you’re able to take the general ideas and generalise them for the whole operations and templates in your organisation, other areas will have a head start.
- There is no only right competitive template. The point here is to use the right data, involve all vital information, and build an analysis that will be easy for everyone in your company to read and glean insights from it.
How Can Profiletree Help You?
When you are searching for someone who can help you perform competitive analysis, you don’t need to hire a market intelligence firm to get that information. Instead, you have to hire a professional marketer with the right tactics to elicit the specific data you need.
What will you get in return?
- Listen to you: we will conduct an initial session to learn more about your industry and products and the scope you target.
- Do our profound research: your business is shaped by the competitive landscape in which it’s based. That’s why we will direct our researchers to determine your competitors and gain each piece of information that might be useful for your company.
- Know more about your competitor’s offer: Try to get in touch with their customers. We conduct surveys with their current customers who have already taken advantage of the offer; they may be able to give us some insight.
- See if the competitor offers a free trial or sample. That can give us a chance to test out the offer and see if it would benefit your business.
- Take a look at their marketing materials. That can include anything from their website to their social media posts. By seeing how they promote the offer, we can get a better sense of what it entails.
- Conduct a sales analysis to uncover what their biggest market is and what tactics they use to proceed with their sales process smoothly. Also, we will focus on the channels they use to reach their target.
- Keep you updated with each step. We will provide you with any updates to follow up on and send your feedback to ensure that we are both on the same page.
- Hold a final session to present what we have done. Ask for feedback if you need any extra information or resources or adjust what we have for a more effective competitive analysis.
A well-structured and -executed competitive analysis can give you the insights you need. Whatever you’re looking for, we can investigate what exactly you want to drive more sales after studying your competitors ideally. Contact us now!