What is a competitor analysis?
Competitor analysis is a fancy term for keeping track of your competitors; seeing what they’re doing, who they’re doing it with, and how they do it. The greatest perk of conducting a competitor analysis is that you’ll be able to see not only the strengths and weaknesses of your close competition, but it’ll allow you to reflect on your own company’s inner workings.
Why is a competitor analysis important?
Competitors are the thorn in the side of most businesses, but it doesn’t have to be that way. What if you could discover what your competitors are doing and use it to your advantage? Could there be a way to analyse how hard they’re working and how they target their customers, which can then be used to boost your own business? The answer is yes, and with a few simple steps you’ll be on your way to a successful competitor analysis.
What are the benefits of a competitor analysis?
Improving your own products or services
The main aim of any competitor analysis is to boost your own business, and what business wouldn’t want to see an improvement in their products or services? You can achieve all of this by simply keeping a watchful eye on what your competitors are up to.
Identifying what makes your business different
Ensuring you stand out from the crowd, or at the very least out-shine your competitors, is a key take-away from a well-executed competitor analysis. Rather than copying your competitors, what can you do to set yourself apart from them?
Showing where your competitors are lacking
Exploring where your competitors are lacking provides your business with the great opportunity to take advantage of that all-important gap in the market. It could be that your business improves on what your competitors have missed out on and then you end up taking the lead in that niche.
Highlighting your competitor’s achievements
Being able to learn from your competitors is something that should be harnessed and used to develop your business, even if it is a bitter pill to swallow. That’s why keeping up with the new trends that your competitors have dabbled in will keep your products or services relevant.
The potential for growth
Last but not least, growth. Possibly the most important aspect of a competitor analysis is the ability to grow your business. You are now one-step ahead of your competitors, and with the reams of information you’ve gathered, there is a hell of a lot of growth potential.
How to do a competitor analysis
At this point, you may be thinking that this all sounds well and good, but how do you actually go about performing a competitor analysis?
Before you begin analysing your competitors, start with a SWOT analysis. Through identifying the strengths, weaknesses, opportunities and threats within your own business, you can easily look at which areas are lacking, and which can be left alone. This is the ideal starting point for any business, and it will enable you to clearly define (and hopefully reach) your goals.
Identifying your competitors
The second crucial step is to identify your competitors and take a closer look at them. If you don’t know who you’re competing with and what they’re doing, your odds of performing a successful competitor analysis are basically zero.
Two key questions to keep in mind at this point when looking at your competitors are:
- What are they offering that you’re not?
- What are they doing that you aren’t?
Analysing a competitor will not always show how well they’re doing compared to you but instead it might highlight something you’re doing that they’re not. What better way to get an upper-hand than to seize this opportunity? On the other hand, maybe neither of you are doing it. This could also be a potential gap in the market for you to fill. As the saying goes, work smarter not harder.
Analyse their products or services
When looking at your competitors, think about which products or services they offer, comparing these to your own offerings. Do they offer a free trial period for a product, or a money back guarantee? Take inspiration and see whether there are any ideas you could mould into your own.
Likewise, a competing company may be working harder on one area of marketing than you are, so is there anything that you could learn from their strategy to benefit your own company? Pull out a notebook and get scribbling.
Comparing your competitor’s products to your own can only lead to a successful competitor analysis, and we suggest looking at these three elements to get you started:
- Features – do your products share similar features to a competitor? Or are they completely different?
- Pricing – do you have the upper hand with a cheaper product? Could you revise the prices of some products?
- Market Gaps – what are your competitors missing that you could get into?
Product comparisons against competing companies are a great way to analyse and improve your own products, whilst getting a cheeky insight into what your competition is up to.
Once you’ve taken a look at your competitors, it’s time to start analysing their target market. . Customers can make or break a business, and that’s why their satisfaction is such an important area to analyse.
The Internet is full of reviews explaining the good, the bad and the ugly side of businesses. The best places to conduct this research are on sites such as Trustpilot or Google Reviews, and this will give you a really good idea of how satisfied your competitor’s customers truly are.
Are your competitors better at keeping customers happy? Do they offer top quality customer service? These are the sorts of questions to consider when carefully analysing a competitor’s target audience, which you can then use to keep your own consumers sweet.
So, you’ve identified your competitors, you’ve found out what they do differently and how they’re doing it. And you now know whether their customers love or loathe them. Now it’s time for the next step.
Before you start gathering the actual data, you need to decide what you want to keep an eye on. This could be pricing, marketing strategies, online presence or perhaps a mixture of multiple factors. Once you’ve picked your focuses, you can really get into the nitty gritty of it all.
Displaying your data
Now, what do you do with the data?
Spreadsheets are the perfect way to store all of your collected information. They allow you to create a top-tier table of data with various headings for data inputs, competitors and, of course, your own business. This then creates the perfect space for data analysis.
Everything you need to make an informed judgement on how to strengthen your business is now at your fingertips.
Practice makes perfect
Congrats, you are now safely on the road to a successful competitor analysis! Luckily the hard part is over, and all you need to do is put these tips into action.
Undoubtedly, one of the most important steps of this process is putting what you’ve learnt into practice, and the proof is definitely in the pudding. The data you’ve collected about each competitor can now be used to compare your business to theirs, providing you with all the tools you need to really wow your audience.
Rather than looking at your competitive companies through envious eyes, learn from them. Along with gathering info on those pesky competitors, it is also always useful to take a look at how you want your company to grow and what you can do to ensure that you grow in the right direction. If you’re looking for a way to truly empower your business, a competitor analysis is the way to go.
A great competitor analysis is always good to have under your belt but if you’re looking for more ways to nail your overall marketing strategy why not get in touch with our team today? From SEO to content marketing, we can help you ensure that all bases are covered.
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