One of the most essential elements to remember when conducting a competitive analysis is that this is an excellent opportunity to acquire insight into your industry that will save you time and money and provide a wealth of opportunities for your marketing strategy.
Your competition’s strengths and weaknesses may provide insight into your own business, and their market research may give you something to work off of for your business marketing plan and inspire a wealth of ideas to connect with your audience.
Identify your competitors.
The first step is to find your direct competitor in your similar industry space, companies selling similar products or services to the same audience. You then should expand to your indirect competitor, companies not selling similar products or services but are reaching the exact market or audience.
How can you identify your competitors?
Finding your direct and indirect competitors online is as simple as doing a keyword search. With direct competitors, you will need to search for similar products or services and dig into their websites.
Indirect competitors take a little more creativity. While you will also begin by doing a keyword search, it is not as simple as searching for a product or service. You will have to think about your ideal audience or buyer. This research will take on a broader aspect. For example, if you sell yoga classes, you might also search for gyms in your area. These gyms are your indirect competitors.
Both types of competition are equally as important and offer insights into marketing strategies and audience insights that your business can build off of to create a marketing opportunity that meets the audience where they are online and fulfills voids in the competitors’ market.
You want to make sure you have something to analyze. Create a list of up to 4 direct and 4 indirect competitors. Ensure they have a visible footprint online, a website, social media presence, blog or other written content, email signup, etc. Not every company is strong in every aspect online, so this list might narrow down quickly as you gain insight into the competition online.
How to identify your market position.
To understand your market position, you must consider what benefit a customer would derive from choosing your company. Your business’s market position is not just about the product or service you sell; it should reflect what value you bring to customers. There is an incredible amount of noise online; you need to identify how your company can cut through all this and reach your customers.
There are many ways to define market position, but most marketers agree that it is how your target audience perceives what you offer.
“You have the power to shape perception for your customer.”
Brand perception can be based on factors such as brand image, price, reputation, and quality. For example, suppose a consumer buys luxury goods because they perceive them as superior in quality or design compared to other brands. In that case, the product has a strong market position in the minds of that consumer. The product or service is independent of the perception the audience has of this brand. Perception holds a lot of power in building brand loyalty. Any business can create a perception, but long-term perception and growth based on authentic mission-driven credentials will provide longevity.
Define what makes you different from your competition.
A key aspect of a strong competitive analysis is understanding your own brand and where your strengths and weaknesses are in your industry space. From this vantage point, you can look deeper into your competition.
Although you might feel like you know everything there is to know about your business, from a surface perspective, it doesn’t hurt to dig deeper. You should start by asking yourself these questions:
- What does your company do better than others in the industry?
- What does your company not do well compared with others in the industry?
- What are some of the weaknesses you notice among your competitors?
These questions arise from the emotional side that a business evokes in its audience. The emotional response provokes loyalty to a company and needs a deep look when it comes to analyzing your competition. You need to understand your unique selling proposition to analyze the competition in a way that will be relevant to crafting a marketing strategy unique to your brand’s mission and vision.
Determine where your competitors are succeeding and failing.
We have some information about our competitors’ mission and vision and, more importantly, their emotional position in the marketplace, and we have done some self-reflection with our own business. Now comes the time to dig deeper into the competition’s online footprint.
Depending on how extensive your analysis goes, at the surface, you should be looking into:
- Website: Is the website set up in a user-friendly way? Is it mobile-responsive? Does their website provide enough information about their services/products and benefits? Is their messaging clear and provides the benefits of their products or services?
- Advertising: Do they have a paid ad campaign, or are their promotions organic (not paid) through social or email campaigns? What types of ad campaigns are they running? Do they appear targeted? Sometimes the best marketing methods are relatively simple, so note those.
- Pricing: What type of pricing strategy are they using? Do their products/services reflect that strategy?
- Customer Service: How have users responded to their customer service efforts? How often does a customer need to contact them before finally receiving help from a live person (if at all)? Where are they conducting their customer service follow-ups?
- Product Development: How long has it been since their product received a major overhaul (or even an update)? Are there any features lacking that customers find valuable?
- Social Media Presence: They should be active on social media platforms relevant to the nature of their business. Note how frequently they post new updates, review user feedback, respond accordingly, etc. It is not about followers; focus on consistency and engagement.
- Online Content: What kind of written content do they have? Do they have a blog feature where people can go to get information? What types of content are they writing about? Is their content informative or promotional? Is their value-added?
- Where are they getting recognized online? Are they featured in news articles, creating guest content, or being mentioned in articles? Outside links connecting to their website (backlinks) or even a name mentioned online build momentum for businesses.
Gather information about your competitor’s customers.
“Who is your competition’s target market? What are their demographics, lifestyles, preferences, and interests? What are their pain points, and what makes them happy?”
These are good questions to ask when conducting a competitive analysis. Without answers to these questions, you won’t get a clear picture of your competitor’s customers and how you can best serve them. When you know who they’re targeting and why they may prefer them over you, it’s easier for you to position yourself as the better choice for your shared audience. You can use the information from this step in creating marketing campaigns with more compelling messaging—or just lay out what makes you different from the other guys in the first place.
There are several ways to research your competitor’s customer base:
- Read interactions on social media. Social listening is a great opportunity to look into the interactions of your competitors online. It allows you to monitor your competition’s social media channels for customer feedback, mentions, and even discussions regarding specific keywords, topics, or competitors. But the most important is getting insight into prospective customers’ wants, needs, and desires.
- Read blog posts written by or about their customers.
- Create a persona to understand the ideal customer. It is ideal to create a few different customer personas to utilize when crafting your messaging, focusing on addressing their wants and frustrations.
Examine your competitor’s products and services.
Next, closely examine your competitors’ products and services, focusing on what they offer, how they deliver, their messaging, pricing, etc.
To answer these questions, visit the competitors’ websites and analyze each page carefully. Look for critical differences in the products and services that each competitor offers, such as:
- Value propositions (how can the customer benefit from using this product or service?) Is the value clear?
- Detailed descriptions of features and functionality. What is the tone of the descriptions?
- Product benefits vs. features (benefits help address pain points; features describe how a product works).
- Pricing models, including upfront costs, ongoing fees, support contract options, etc.
- New entrants into the market often have a competitive advantage if they offer lower prices to capture market share. If this is an issue for you, examine your competitor’s pricing structure and determine what they may be sacrificing to sell at such low rates (for example, perhaps their customer service is relatively poor).
You can also do a google search for products and services, which will open up a wealth of information. This research phase takes time but is an opportunity to think critically about what you are selling, how it is presented, and whether the messaging resonates with an audience. These insights can help create your unique selling proposition to set your business apart from the competition.
How to learn more about your competition
Your competition is thriving, and you want a piece of the action. But how do you know how to get in on it? To learn more about your competitors, conduct a thorough competitor analysis.
You should identify your competition, define your market position, and understand your audience and where they show up online. The competition’s strengths and weaknesses will provide a roadmap for your marketing strategy that you can adjust to represent your brand’s mission and voice.
The information gathered in your competitive analysis will allow you to show up where and how your audience wants online. This will help your company stand out among the online noise and provide your brand’s authentic, value-driven footprint.