As the name suggests, competitive analysis involves researching and gaining insight into your competitors. There are a number of reasons why a business might want to perform a competitive analysis such as coming up with stronger (and different) campaigns, implementing newer business strategies, filling in the gaps left unaddressed by the competitors in the market that their product or service could not solve, and more.
Here are some reasons your business would perform a competitive analysis
- To learn where your company is succeeding, where you need to make improvements, and which trends you need to anticipate by conducting a competitive study.
- When your business isn’t developing as quickly as you’d like it to or when your competitors are doing well in the marketplace.
- A competitive study should look at the attributes, market share, prices, marketing, differentiators, strengths, and weaknesses of your rivals as well as their locations, cultures, and consumer feedback.
- Your business is new and you want to know how the competition is performing in the market.
Therefore, if you have just started a business or have been running one for a while, it is wise to perform a competitive analysis, not just at the start of your business but we advise you to perform it on a monthly to a quarterly basis depending on the size of your business, the size of the market and the number of competitors in the market.
Now, we’ve spoken enough about the benefits and the reasons you practice analysing the competition. If you are serious about running your business and taking it to the next level, you need to know the steps you need to follow to perform it. We have dedicated the rest of the blog to acquaint you with the steps to perform a competitive analysis.
Step 1: Perform a KYC – Know Your Competitors
At this step, knowing your customers can take two forms. Knowing them by name and learning what they do, how they are different, who their target audience is, what is their unique selling proposition (USP), their area of operation and how your business is different from theirs.
Where can you find your competitors?
A quick Google search can help you identify those competitors that have an active online presence. You can find them on the search engine result pages (SERPs), on social media platforms, and featured in newspapers and magazines.
But what about the ones that do not have an online presence? While digital marketing is important for businesses of all sizes, there still are those that operate at the risk of losing opportunities rendered by online searches.
You can find this competition by talking to your current customers by asking them who else they considered before finally buying the product.
Some businesses still believe that traditional marketing overrides the benefits of digital marketing. Therefore, you can tap into such competition by attending in-person conferences, seminars and events. But do remember that it is 2022 and businesses can’t avoid digital marketing for too long.
Step 2: Research Their Tactics
Once you have performed a KYC, make a list of the most relevant competitors, and note their websites, and their USPs among other things mentioned above.
While researching your competitors’ tactics, you may want to find answers to the following questions as a part of your competitive analysis. If you are unsure of how to go about this, take the help of a digital marketing agency to help you answer the following questions:
- What practices do they perform to generate leads?
- Which communication channels do they use and are active on?
- Where are they based and the geographic locations do they operate?
- What are their annual revenues? What about the overall amount of sales?
- What is their online reach? Where do they rank on SERPs? How many followers do they have on social media?
- What were their most successful marketing campaigns?
- What marketing technology do they use?
- Does your target audience overlap? If yes, at what point?
- What is their pricing structure? Do they offer discounts and offers?
These valuable facts will help you get a sense of how competitive the sales process is and what data you should arm your sales representatives with to succeed in the final buy stage. Some of this information could be discovered by looking through your CRM and contacting clients who said they were thinking about your rival.
Step 3: Tap Into Their Communication Channels
Step 2 helps you identify the different types of things your competition may be doing to become a successful player in the market. However, to be in constant touch with your competitors, you need to have surveillance of the type of content they put out and the communication channels. The reason why this step is so important is that your competitors are your competitors primarily because you operate in the same industry.
Therefore, it is important for you to note their target audience (which in most cases will overlap with yours) and look at how they communicate with them. You’ll conduct this step, first, to avoid doing the same things as your competitors and second, to reach out to your target market in a way that your competitors did not think of. An effective way to do this is by performing a competitive keyword analysis.
For example, your competitor may be active on social media but does not use retargeted advertising. In such a case you may want to leverage Google ads services to float PPC ads to communicate with your target audience.
Step 4: Perform a SWOT
A competitive analysis is incomplete without analysing SWOTs (strengths, weakness, opportunities and threats). You’ll be able to contrast your strengths with their weaknesses and vice versa. By doing this, you can position your business more effectively and start to identify opportunities to strengthen your own brand.
Start by comparing each element of the SWOT of your business against that of your competitors. By the end of the SWOT, you will find the key areas where your business has the potential to shine, the digital marketing trends that you can piggyback on, the areas your business needs to improve in as well as mitigate the potential threats to the success of your business.
For example, if you find that your business needs to focus more on improving its SERP rankings, you may want to improve this by taking the help of an SEO agency.
You may determine which threats and difficulties demand your urgent attention, which opportunities you should seize for the greatest return, and which clear business intelligence will assist your team win over clients.
Competitive analysis should be a part of your regular business processes and be conducted on a consistent basis (apart from a regular basis), to keep your business relevant in the market. Not just that, competitive analysis can give you insight into the current market trends and how your business can stand out against the competition. You might discover that regularly including competitor analyses in your conversions, and modifying your strategy in response to such studies will boost creativity and have a favourable effect on the success of your business.
All the best!