Assessing your competitors is a big part of small business success. In short, that's what competitive analysis is about. This research will help you understand the strengths and weaknesses of direct competitors. Doing this type of competitive research gives you a head start in your target market. <! – ->
This article covers some of the boxes you need to review to conduct a thorough competitive analysis.
What is a competitive analysis?
A competitive analysis is the evaluation and investigation of your competitors. By identifying a competitor's strengths and weaknesses, you can improve your efforts in small businesses. There are many different areas. These deal with aspects such as marketing strategies and target markets. They also cover digital aspects such as social media. There is usually also a strong content area.
<! – -> It is important to take the time to carefully plan one of them. You can provide a roadmap for improving your business. Competitive analysis can also indicate weaknesses in the market from which you can benefit.
Why a competition analysis?
This type of competitive analysis has some great advantages. Read on to find out how your small business can stay with you on your market share.
Alex Azoury, Founder and CEO, Home Grounds offers some other insights into why such an analysis is important.
"There are two good reasons for this," he writes. "If you have not yet started your business analysis, you will get a clear insight into the demand for your product or service. You are thinking about how you can differentiate yourself in the market."
The other reason has a lot to do with getting other competitors under control. Azoury explains. <! – ->
“For an existing company, you need to stay informed online about your competitors' marketing campaigns and activities. Find out if you can take advantage of gaps in your strategy. Use the analysis to measure yourself against the same criteria. Then look at your company objectively to find opportunities for improvement. “
Carrying out a competition analysis
The idea sounds simple. However, putting together a working analysis template is a bit more complicated. There are several steps you need to follow. You can use this to get a better understanding of your target market. You could be an established company or a start-up. In both cases, compiling this data gives you an accurate picture of what your competitors are up to.
<! – -> There are other advantages. It can help you turn around and close gaps in the market. These analyzes are also useful for deciding when to develop new products and services. Or they can help you decide when to cancel those that don't work.
Here are some boxes that need to be checked for accurate competitive analysis.
1. Use the Web
To begin your competitor analysis, you have to get out on the right foot. Start on the Internet with the search engine you are most familiar with. Here you will find most of the business information from competitors that you need. However, the starting point can be different than expected. Instead of looking for a competitor's name, you can start with your company name.
Google will provide a list of other business competitor names. This is a good place to start your analysis. A knowledge area is displayed on the right of the results page of the Google search engine (SERP). Look at the floor. Here you will find the names of the competitors. Remember that it's a mix of three different types of competitors. However, it does give you a starting point for your analysis.
Here's another trick you can use to find more information for your competitor analysis. Use a keyword that relates to your company. If you create a list of these and keyword phrases, you can embed them in any search engine and get a list of competitors.
Corinne McCarthy is SEO & Online PR specialist at Web Talent Marketing and has a few other suggestions.
"Use third-party tools (such as SEMRush.com or Ahrefs.com ) to find keyword data about your competitor," she writes. "It is helpful to export the keyword data to an Excel file. SpyFu is ideal for viewing the paid keywords of competitors."
It is important to take a look at how your competitors are using search engine optimization. Google Analytics is a great tool for engaging with how a competitor uses SEO.
Mia Ballan is the founder of Money-Minded Millennial and gives some additional advice.
“Make sure that the competitor you select is closely related to your job. You can use measures like Moz Domain Authority to check whether it is a relevant source, ”she writes. "Their website should contain notices that indicate that they are legitimate (financial years, customer reviews, etc.).
Finally, it makes no sense to take notes from a competitor who is unsuccessful. Review website rankings, the quality of their content, and industry awards to confirm that you want to follow their example. “
2. Compile a list of your competitors
First things first, as you say. If you want to know how competitors work in your market, you need to know who they are. So the first step is to compile a list of competitors. You may think you already have a good idea. However, you must consider the following to ensure that you consider all of your competitors
Like the different types that your company has to deal with. There are direct and indirect competitors. Understanding the differences between the two can help you put together a good competitive analysis.
These are the people who sell the same goods and services as you do. Either directly in the same geographic area or in the same online area. In essence, you and your direct competitors offer exactly the same thing.
Follow this link for some examples on the mobile phone market. You will see Verizon and Sprint compete directly with T Mobile and a few others. That should give you an idea of how you can put this part of the competition analysis together.
Azoury has some excellent suggestions.
“Set up a tool to record the information found. I prefer a table, but a table works too, ”he writes.
Next, he says that you have to enter the names of your main competitors above. He suggests three names. Be aware that your competitors may not be who you are thinking of. Start with the competitors you are competing with directly.
"They are the ones with very similar products or services that are aimed at the same target group or customer personality."
The left side of the sheet should have the following: It lists the following:
- A summary of what you currently know. Use a search engine to get this information from their website. Social media sites can also be helpful. Pay attention to the slogan, the unique value proposition and everything that highlights strengths / weaknesses. Don't leave out details like the email address.
- target group. Who are they aimed at? An example could be men between 30 and 50 who buy tailored suits.
- Products or services – what do they offer?
- General Marketing Strategy – This is an important part of the competitive analysis that you put together. Find out what kind of content they're using.
- Online Marketing Strategy – How Do They Promote Themselves? Write down your observations on their website and social media accounts. How do they generate traffic and leads, what do they post, do they have reviews or testimonials? Discover the content strategy.
- Strengths – Look for good content like great product descriptions, a valuable free resource, and professional images.
- Weaknesses – Do They Respond to Complaints? Is the business difficult to contact? Things like poor site navigation counteract any marketing efforts.
- Competitive Advantage – Do These Competitors Make Their Own Products? What type of media coverage do you get? What about free resources?
Here is another helpful piece of advice on how such a competitive analysis works. When working on your brand, you should only focus on this type of competitor. Find out if their content marketing efforts include a blog. Check out their social media to see what they're focusing on. You may be able to tweak the content templates that you use for your product or service. Much of this information is found on competitor websites.
These are companies that sell goods and services that are similar in the same market. The idea here is that you and your competitor may target the same audience. If you sell shoes and company B sells boots, they can be seen as an indirect competitor.
These people are important because they sell different products in the same niche market. If you pay attention to how they use marketing, you can make better use of your content. If you work through the content marketing of these companies, you will gain insights into new markets.
Some people think that these competitors can actually be excellent partners. Here is an example. If you're selling curling irons, look for a company that sells hair care products. At the same time, remaining competitive means checking whether these competitors are rising or falling.
These people are at the bottom of the list. Why? Because they are not an immediate threat to your product or service. However, they offer something else that can be considered a replacement. Proper competition analysis could include the local ice cream shop if you sell donuts. This type of business could quickly change marketing strategies and include similar products.
The decision in which area the competition falls depends on your individual company. For example, if you sell hammers and nails, it is not difficult to categorize the competition. This is not the case with a software company with different functions and plans.
3. Compare marketing strategies
A look at your competitors' marketing strategy is an important step. There are a few things that go into a full competitive analysis. Remember that this part of the analysis is content-based. Check out several factors, including the number of blogs that competitors use.
McCarthy has more advice on marketing your competitors.
"Look at the content on your competitor's website. Focus on important pages such as the home page and service or product pages. Analyze the headings and search for keywords in the page copy. Rate the tone that Style and length, compare to your own website content. ”
"Don't underestimate the speed of the website," she writes. "Use Google's PageSpeed Insights to see how quickly your competitor's website loads compared to yours." Make sure you don't lose potential customers due to a slow website. "
4. Compare websites
Any good competitive analysis must take into account what the other company is doing online. You can get some good information from the content on their website. Social media is also important (see below), but the website is a treasure trove of good information about your competitors.
There is an entire industry that can help here .
Nevertheless, there is some good information that you can get for your competitor analysis on the website.
- It might start a little bit like detective work. Even if you only get an email address to an employee or customer, you can get some information that you can follow.
- The website provides information on webinars and other social media events. These can be helpful to learn more about the business of competitors.
- The website is a great place to get links to interviews that competitors have had in the media.
There are a few things you should consider here. What tone is your competitor using on his homepage, for example? Note the pictures used. It's also a good idea to focus on customer name emails found in testimonials.
5. Compare social media
Social media is an important part of understanding competitors' activities. You can find important information on how people talk about this competitor here. Here are some boxes that you should check to get the most out of your competitor's social media channels.
See who you speak to and who you interact with. This gives you a stronger idea of the target market. Check out the platforms that work for your competitors. Not all social media channels work for all small businesses.
For example, YouTube is an excellent social media channel when your goods and services need to be assembled and explained. Checking out other platforms like Instagram makes sense. You want to take a look at the language your competitors use on other platforms like Facebook.
Check how a competitor's business uses influencers. Make sure you measure the emotional content of the posts for each social media channel. Don't forget to check out the LinkedIn channels. The content found there usually says something about B2B marketing.
6. Consider pricing
There are many areas to cover. While some consider social aspects like content, others consider numbers like pricing. When you compare your prices with those of the competition, there are a few things to consider. It's all pretty simple if your goods and services are similar. Add features like software and things can get more complex.
The first step is to compare your prices against the competition. You may be able to get some numbers from the website. If not, you have to dig a little deeper. Try searching for name email information from testimonials to get in touch.
If you have direct competition that sells at the same prices, you can lower your price to increase sales. Lowering your price can force competitors to innovate to cut costs and keep pace.
7. Use a SWOT analysis
After you collect the data you need, your company has to put it all together. A SWOT analysis of a competitor is useful here. The word is an acronym. It stands for strengths, weaknesses, opportunities and threats. These are flexible. They can be created to analyze your own business or that of your competitors. Some companies use it as a base. The analysis refers to the own company and gives them a starting point for the competition analysis
There are many advantages. A major problem is that companies can use the SWOT analysis to see areas that their competitors in the market can use.
Ty Stewart, CEO and President of Simple Life Insure adds a reason for using this.
"The best tip for a successful competitive analysis is always to have a specific end goal in mind," he writes. "Without this solid, precise purpose that fuels analysis, you will end up with a lot of data, but little direction to work with." ”
He says you can shape results by having a specific question or project to which the competitive analysis answers. That way you get a lot more of the job. These SWOT analysis tools can help.
Template for competition analysis
It is good to summarize all this information in one template. There is some flexibility here. However, a good template contains the following content:
- Revenue – The clearest way is to check the website of the competition or search for press releases.
- The Target Market – Check out the content on social media platforms.
- What makes your products different and unique.
- The number of employees.
- Your products and services with prices.
- The marketing strategies they use.
- The social channels and websites on which they are operated.
- Content on company history.
Here are some tips for getting a template for competition analysis. Searching for a online worksheet is a good idea. However, you need to be careful to ensure that all of the categories you want exist. There are some industry leaders that offer them, such as Shopify.
When creating your own, don't forget to include sections for social media and website content. Without taking digital marketing into account, you cannot get an accurate analysis.
Understanding what a competitor is doing can help your business succeed. This is what a good competitive analysis is about.
Mia Ballan, the founder of Money-Minded Millennial provides a good definition.
“The key to performing an effective competitive analysis is choosing the right competitor. The criteria to watch out for are: 1) they are relevant 2) they are relevant and 3) they are successful, ”she writes.
Maddie Bishop, Senior Brand & Communications Strategist at Jacob Tyler has the final say:
“The best competition analysis research is not only interesting, but also useful. There should be some insight into how your brand can grow, pan or innovate inside and outside of your market. "
Before you start, says Bishop, you have to ask three questions. Here is the list that the bishop provides.
Define what you need to learn. Do you just need an overview of the market or do you want to see how you can master it?
Decide who your competitors are. It may not be as obvious as you think. Are you the market leader in your market? Those who manufacture a similar product or offer a similar service? Or those who have taken a strategic step that you are aiming for?
Question whether you really need a traditional competitive analysis. It is unlikely that you can achieve market-leading success simply by copying their tactics. Of course, sometimes you just need an overview of where you are. However, if you try to inform your next strategic move, there may be a better way. Perhaps you could actually learn more from some carefully selected category case studies?
Remember that a good competitive analysis should do several things. First and foremost, it should identify gaps in every market.
A good analysis can also be the first step in developing brand new products and services. When done correctly, it also helps to identify important market trends. Ultimately, it should help you sell and market your products and services more effectively.