What’s the main thing obstructing your path to success? Your competitors. Unfortunately, there are few monopolistic markets where you can control market share. That is why it is important to conduct an analysis of competitors when planning your marketing strategy.
Competitor analysis can help you gain a better edge over your rivals in the industry, thus leading to higher revenue and market share.
Why competitor analysis is crucial
Still not fully convinced why you need to conduct an analysis? Here’s a few reasons that’ll change your mind:
- Identifying threats
Your competitor’s strategic advantages will prove to be a threat to your business. Let’s take the example of Huawei. The company has recently been gaining higher market share of the smartphone industry because of its high end, feature-packed phones. These phones are a threat to market leaders like Samsung and Apple as they are losing shares that Huawei is gaining. Identifying Huawei as a threat will help both Samsung and Apple to come up with solutions to deter the company as a threat.
Carrying out the SWOT analysis will help you better identify the threats that your competitors pose to your business. Here’s a list of potential threats your business could be facing:
Source: Project Engineer
- Understanding customer needs and wants
If you’re new to the market, this can be really beneficial. While you may not be able to do an in-depth analysis of how your competitors deal with their customers, a general outlook will certainly be of help to you. Since you are selling the same products as your competitors, you can conduct an analysis to identify your target audience. You may find target segments that you or your competitor may have missed. Targeting the right market will help you in building brand awareness. In addition to this, you will be able to better gauge customer wants and needs.
Conducting a competitor analysis
#1. Set your goals
Planning always helps to save time. If you know your goals, you can easily structure your analysis, so do your research on the following:
- What decisions will affect your competitive research?
- Which areas do you plan on targeting?
Whichever industry you may be in, you need to set SMART goals:
#2. Identify your competitors
Once you’ve set clear goals, you need to identify who your competitors are. It might sound surprising, but not all companies are aware of their competitors. A plastic manufacturing company might be competing with a fabric brand that is potentially creating products to replace plastic. These are known as indirect competitors.
Thus, you need to conduct relevant research on your competitors. It’s easy to identify direct competitors. You can simply type in your brand name or the products/services that you offer on Google and you will get a list all the similar brands in your area:
Online software’s such as SEMRush are also a great way to identify your competitors. SEMRush allows you to look at what other companies rank against your brand.
Learn about the 3 competitors to keep your eye on.
#3. Analyze and compare competitor content
Like I mentioned above, competitor analysis helps to analyse customer content which in turn helps you determine how to outperform your competitors. But what exactly is the content that you need to look for? Here are a few examples:
- Featured Articles
- Case studies
- Press releases
The purpose of keeping a tab on your competitors’ content is so that you can compare quality. Are they posting better blogs or getting more followers than you? Find out why. Analyzing your competitors will help you identify what you’ve missed in your marketing strategy and how you can improve it.
A newly established business can also get a better idea of the frequency of posts, type of content and audience to focus on by studying competitors.
An important thing to remember when blogging is that producing irrelevant content just for the sake of uploading content will not generate higher traffic. You need to post about engaging topics that are pertinent to your business so that customers enjoy reading your content.
#4. Analyze your competition’s SEO structure
This one is make or break. Getting your SEO right can make all the difference. Your website and blog will rank higher in search engines, your content will be clear and hence, customers can easily find you.
If your competitors are posting the same content at the same frequency as you, and yet they are receiving a higher number of viewers, then the only difference might be their SEO structure. Look out for the following features in your competitors’ websites and content:
- Are they using prime keywords that you may have missed?
- Does their website have clear headings
- Is their website mobile optimized?
- Have they been mentioned by high-authority blogs?
- Is their website well designed?
- Does their website load quicker than yours?
If your competitors have any of these features that you don’t, it means that their content and website is more optimized than yours. If that’s the case, they will rank higher in search engines when customers search for the product/service that you offer. To get an edge over your competition, read this guide on SEO success for your website.
#5. Take a look at your competition’s social media
Social media is one of the most powerful tools out there. Use it to your advantage and you could easily turn a startup into a multi-million dollar business.
Creating a social media profile isn’t enough. You need to make sure your business is interacting with its customers. Here are some key points on how to interact with your customers on social media:
- Post regularly
- Post infographics as they are much more engaging than text
- Reply to customer comments on your posts
- Hire a customer representative to respond to social media messages in a timely manner
When conducting an analysis of competitors, look at these points. Do they have a faster response time? Is their customer representative team more efficient? Find any areas that you might be missing, because at the end of the day, if you’re selling the same product then good customer service is what will put one business ahead of another.
A great trick to getting competitor insight is customer reviews. These reviews will reveal all the secrets as to why customers like or dislike a brand e.g. they may love the after sales service of your competitors. This sends a clear signal that you need to improve your after sales service to an extent that is higher than that of your competition.
Similarly, if customer reviews show that your rival business is losing customers due to quality, exploit this. Position your brand based on quality and offer customers the best quality in the market. This will get customers to leave competitor brands for yours in a heartbeat.
Learn how to create a powerful social media strategy that will help you get ahead of your competitors.
#6. Take a peek into your competition’s digital side
One of the major reasons why some businesses are ahead of others is because of the technology that they use. This could be machinery to develop a product, digital tools to provide better services or any such feature that makes their operations more efficient.
For this very purpose, BuiltWith comes in handy. The website will list all the applications and software that a business uses. All you have to do is search URL or keyword to get results:
#7. Compare pricing
It sounds obvious, but pricing is the key determinant in whether a customer will pick one product over another. When they visit the grocery store, they’ll pick a can of blueberry that’s the cheapest, because they’re all the same right? That is why you need to compare your pricing strategy with competitors. If your prices are higher than competitors, there are three possible solutions to get customers to buy your product:
- Bring your prices down – Look at the bigger picture. You may be making more profit per item as compared to your competitors, but if they sell more products, they could be generating higher revenue.
- Lower your costs – You may be making less profits because your cost is too high. Are there any unnecessary overhead costs? See if your manufacturer or intermediary is charging you too high. Switch to alternatives if possible.
- Convince customers to buy products – If your pricing is justified, customers will opt for your product even if it’s more expensive. People will buy a MacBook Pro as opposed to a Lenovo laptop despite the hefty price tag because they believe it offers a better quality.
The key point to remember is that customers will buy your product only if they feel that the price matches the value.
#8. Identify and refine areas that need improvement
The last step of any competitor analysis is to list down the areas that need improvement and work on them. However, your analysis is not a one-time job. In order to prove it effective, you will constantly need to fix areas where your business lacks. It is an ongoing process that requires constant attention.
The best solution to this is to hire a team of industry experts that can help analyse and assess where your company ranks in comparison to its competitors. However, if your business doesn’t have the funding to hire a team, you can always rely on technology. Here are some of the top competitor analytical tools that will help you gain a competitive advantage:
SpyFu is a great software that allows access to the Adwords and keywords which businesses buy on Google. This can help you learn their SEO and PPC tricks.
Suppose you’re spending the same amount of money on PPC ads as your competitors but they’re generating more revenue. The most common explanation for this is that your competitors are using more profitable keywords than you are. That’s where SpyFu comes into the picture. It will help you access and download any business’s most profitable keywords. Utilize these keywords in your strategy to get ahead of your competitors.
Sometimes, it can seem awfully difficult to get the right kind of traffic for your blog. And without that traffic, even the most valuable content goes to waste.
All you need to do is enter a competitor’s URL on QuickSprout’s website. Click on the ‘Yes, I want more traffic’ button and analyse the data. That’s all it takes to get lead generation and generate revenue, as long as you keep posting content that’s valuable.
If there’s one thing a competitor analysis can get you, it’s a competitive advantage; in other words, more market share and revenue. The bottom line for all businesses is profit, so conducting a competitor analysis is an essential part of any business strategy.
The important thing to remember is that improving your business takes time and effort. Don’t expect to see results instantly – it takes months of hard work to see an improvement.
The second most important thing is that an analysis of competitors doesn’t mean you follow what your competition does. Your product placement should be unique. The only purpose of an analysis is to avoid the mistakes competitors are making and identify crucial areas that you have missed. Remember, the key is to improve your overall business strategy to stay ahead in the game.