Whether you’re looking to start a business or need to course correct for the future, it’s an excellent way of gauging your current position and increasing potential market share.
Rather than seeing them as rivals, take the view that your competitors are mentors, where you can model things off their successes and steer clear of any mistakes they might have made. Use their wisdom as a way of finding out what works best for them and then apply it to your own business. From spreading a message, to website design, to customer service, strengthening your own business by analysing others can glean some highly beneficial insights.
If competitor analysis (CA) is something new to you, then be sure to check out this helpful step-by-step guide to carrying out the assessment in an effective manner.
You probably at least have an idea of who your competition is from the outset, regardless of your experience, but don’t let that stop you from conducting this first step, especially since new competitors might’ve sprung up since you last checked.
Get on Google and make a note of the results, check Google Trends, analyse keywords or use tools such as Alexa to conduct more thorough insights into your competition. Detail their name, location, mission statement, strengths, weaknesses and the category of competition.
After this, divide your competition into two categories. The first, direct competitors, consist of the competition that solve the same functions and problems as you do, and have an overlapping user base. These businesses show where you can improve and increase profits because that’s who potential customers are spending what could potentially be your money.
The second, indirect competitors, either solve a different problem for the same customer base or solve a similar problem for a different customer base. Indirect competitors are helpful since they might cover areas related to your product where you might expand into later down the line.
What is it that you want to use competitor analysis for? CA is used for a wide variety of reasons – SEO, branding, user experience (UX) and conversion rate optimisation, among others – so consider any parts of your business where there’s room for improvement.
Perhaps you want to use it to gain a better understanding of what makes your company unique, or refine the website’s design? There’s a broad swathe of things competitor analysis can be used for. The goals you’ve set for yourself will help make your CA more structured as a result – you won’t be able to monitor everything, so narrowing down the criteria is paramount to CA’s success.
The criteria you select should provide a context around what your competitors are providing, who they’re providing it for, and how they’re reaching this audience. Customers tend to have a need for what they’re buying. Here’s where the comparison between businesses should lie: what and why are customers buying?
Analysing both qualitative and quantitative data of your competition leads to a thorough, deeper analysis of how your audience’s needs are being met.
Once you know what you want to analyse, you can look at how your competitors represent themselves. How detailed you go is completely up to you, the goal is simply to unearth their respective similarities and differences. That said, the more detailed you are, the more you’ll have to work with later on.
Perhaps you’re looking at their product descriptions – what is or isn’t included? How are they positioning their calls to action? On social media, what messaging do they use and how do they represent themselves? Perhaps their customer service plays a large part in their values or, conversely, there’s a part of their website you feel is lacking, and hinders the experience as a result.
Now do the same thing for your brand strategy. However long you’ve been a business, a brand strategy is something of a necessity, so comparing yours with your competition shouldn’t be a problem. That said, as you compare, you should start to see the things your business should be aspiring to do alongside the things you want to avoid or simply don’t want to compete with. Where do you have an advantage? What needs to be worked on? As you compare yourself with others, a clearer image of your own market position starts to form.
With all of your collected data, you must now structure it in a way that makes updating the information easy to do over time. You and the members of your team need to understand it, so everyone can reference and cross-check it whenever necessary.
Divide up the criteria and results into specific categories. If you’re looking to see how they’re positioning themselves in the market, for example, then collect your findings that relate to website copy, design and marketing collateral in one place.
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Of course, these are only the broad strokes of competitor analysis. Things can be altered or fine-tuned as you see fit. If you’re committed to the process, then be sure to delve further with these helpful hints and tips:
Remember, while CA is an important step, it’s important not to get too bogged down in the details. Constantly reacting to your competitors can distract you from the importance of your own business. At the same time, use that knowledge to your advantage, and rather than approach it as a mammoth task you need to constantly work on, adapt things so you can interlink it with your day to day duties, and benefit from it that way.
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