What is a competitive analysis?
A competitive analysis is an assessment of your key competitors' strengths and weaknesses and a strategy to identify opportunities and threats to help you outperform those competitors.
Your business doesn’t operate in a vacuum.
One of your most crucial tasks as a business owner is deciding how to react to your market and competitive landscape changes.
Whether you’re starting a business or running an existing small business, it’s essential to know where you stand relative to your competition.
And a competitive analysis gives you the vital information you need to make educated decisions about your marketing, branding position, pricing, and more.
If you plan your brand strategy or marketing strategy without a competitive analysis, you’re flying blind.
Don’t fly blind.
Optimize and focus your marketing strategy with a competitive analysis.
Conduct a competitive analysis in 4 simple steps:
Step 1 – Identify your competitors.
The first step to any competitive analysis should be to identify your competitors.
You’ll need to do this even if you’re just starting your business and working on your business plan. After all, it’s challenging to create a go-t0-market strategy unless you understand your competition.
Keep an open mind. This task may be more challenging than you expect.
For example, Coke’s most obvious rival is Pepsi. But they’re also competing against every other beverage brand that makes cola. And they’re also competing against every other non-cola beverage.
Different business sectors often provide specialized competitor analysis tools to meet their unique requirements. Take Amazon’s fiercely competitive marketplace, for example. The tool by Viral Launch helps you with reverse ASIN lookup and performance tracking software. If you’re an Amazon seller seeking a tool for competitor analysis, that tool is worth exploring.
When conducting a competitive analysis, take a broad view of who your competitors may be. You may be missing out on a crucial group of competitors simply because you’ve kept your scope too narrow.
But it’s also possible to cast your net too wide.
So, how do you tell who your actual competitors are?
Compare your audiences.
If a potential competitor targets customers who are not your customers, they’re not truly your competition.
So, start with a broad view and then narrow your list. This will give you the most accurate picture of your competitive landscape.
Step 2 – Gather competitor info.
Now that you know who your competitors are, it’s time to start gathering the information that will allow you to make informed decisions about your own business.
This step will represent the bulk of your effort in your competitive analysis.
The more comprehensive your research is, the better equipped you’ll be to draw informed conclusions and design effective strategies.
So, don’t short-change this step.
We just emailed the info to you.
Start with your competitor’s website. As every business’s online ambassador, websites should be dense with valuable pricing, product, and branding information.
Take note of the following topics when reviewing a competitor’s website.
Identify the products or services your competitor offers.
Do they offer a wide range of products that support up-selling and cross-selling? Do they provide the same or similar products to yours? How are they different? Do they offer any products or services that you don’t? (And vice versa.) What are their unique selling propositions? How do they compare on quality and ease of use?
You must have a clear, unbiased understanding of how your product or service really stacks up to the competition. Rose-tinted glasses are not your friend here.
Research their pricing (including discounts and gifts).
What is your competitor charging for comparable products? Are they consistently charging more or less than your business? Are they building in additional value through gifts? Or do they lean on discounts to lower their prices? How do their prices compare to your other competitors? Do they offer a robust refund policy or money-back guarantee?
Some businesses build their entire brand around competing on price. That may or may not be a model you want to embrace.
Knowing how the competition is pricing their products and services will likely reveal essential pricing trends that will help you price your products appropriately.
Look for a recognizable brand identity.
Who is this business? What is their brand voice? Are there particular “personality” traits or values that stand out? Are there clear visual cues that support those traits and values? Do they have a strong logo? What is the most important brand message on their website?
Once you’ve discovered your competitors’ branding weaknesses, it may become easier to see your own mistakes and opportunities for growth.
Take note of their customer support.
Do your competitors make it easy to contact their customer support team? Is a phone number clearly posted? Do they offer chat? What are their coverage hours? Do they provide well-written FAQs and on-site support documents?
Strong customer support and ease of use are compelling selling points for many consumers. Outperforming your competitors on customer support will serve you well.
Analyze their SEO performance.
Here’s what you should look for:
For which keywords does their website rank? Is your website ranking for the exact keywords? Which ones are missing? Which are their most successful keywords? How do they compare to your most successful keywords? Are there any obvious keyword gaps in your site that your competitors cover well? Which of your competitors’ web pages get the most organic traffic? How many inbound links do they have to their content?
Examining popular keywords, linking strategies, and webpage topics can (and should) help direct your SEO efforts.
Reviewing your competitors’ marketing behavior can reveal valuable opportunities and potential threats to your own business.
It’s unlikely that a competitor’s entire marketing strategy will ever be obvious. But, there are certain aspects that you can investigate.
Research your competitors’ content, ads, and email marketing as you conduct your competitive analysis.
Start by searching your competitors by name in Google.
There’s a good chance that the first results will be paid pay-per-click ads placed by that competitor (or one of their competitors). What are they advertising? What sort of language do they use?
Now that you’ve been Googling your competitor, the chances are that you’ll see other competitor ads popping up as you surf the web. Take note of any other ads you see, including notes on the content, copy, and graphic design.
Weak copy, messaging, or design in a competitor’s ads is an opportunity for your business to make a better impression. Strong messaging, copy, or graphics will communicate a clear brand position that you can react to.
It should come as no surprise that advertising is out for many businesses (and small businesses in particular), and content is in.
Do your competitors have blogs? If so, are they writing quality content? Are they addressing the same topics and keywords that you are? Do they include calls to action within their content? If yes, what are they? Are readers engaging with the content through comments?
And blogs are only one form of content for people to engage with. Social media is a vital content channel to investigate.
What kind of content is your competition posting – text, video, photos, or graphics? Does it have a distinct visual branding style that makes it easy to identify? Is it offering opportunities for authentic connection and valuable information? Or is it primarily promotional materials? Are followers engaging and interacting? What topics are they posting about?
Content marketing builds the perception of expertise. Your competitors’ successful (and unsuccessful) content may reveal your business paths to differentiate itself in your field.
Sign up for any free newsletters your competitors are offering. And try filling a cart on their eCommerce site without checking out.
Then sit back to see what email nurture campaigns they send your way. Give it a week or two to see how often they contact you and what content they share.
Do they follow up with you promptly? Are their emails value-driven and engaging? Or do they spam you with discount offers? Do their emails look professional or sloppy? Are they long-form or short and to the point? How often do they contact you?
You can learn a lot about a competitor by how they speak to and pursue potential customers via email.
Step 3 – Perform a SWOT Analysis.
Now that you’ve gathered masses of information, it’s time to do something with it. We recommend using what you’ve discovered to conduct a SWOT Analysis.
A SWOT Analysis assesses the Strengths, Weaknesses, Opportunities, and Threats to your business.
The information you’ve gathered will reveal your strengths and weaknesses as compared to your competitors. It will also uncover valuable opportunities and potential threats. This will provide you with a blueprint to revise your marketing strategy.
Step 4 – Realign your marketing strategy.
This is the big pay-off.
Now that you’ve completed your SWOT Analysis, you should clearly understand where your business stands compared to your competition.
Examine the opportunities you’ve identified. Then, consider which of your strengths you can leverage to act on those opportunities. And consider whether you need to upgrade your branding. Sometimes, you may need a rebrand to compete in your industry fully.
Finally, create a plan based on priority order (with the most impactful tasks first). This should lay out a clear path for moving forward.
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