Why do you need a competitive analysis? In order to build a successful marketing plan, you need to understand your customers and their pain points. Additionally, you need to know how your competitors are addressing their needs, and where opportunities may exist for your company.
The purpose of competitor analysis is to highlight the strengths and weaknesses in the market and gain insight into your competitor’s brand strategy. From here, you can decide how you fit in, or more importantly, how you stand out:
Who are your competitors?
We won’t try to convince you to Google your own industry because we are aware that you are already aware of your main competitors in the marketplace! But have you thought about different perspectives?
Primary Competitors
Other businesses who are targeting the same customers as you with similar products and services in the same location and who are solving the same problem.
Secondary Competitors
Your secondary competitors are businesses that offer the same or similar product or service as you in the same area but are targeting a different audience or serving a different purpose. There is potential for overlap between you and these competitors.
Tertiary Competitors
Somebody who provides products or services that are vaguely related to your own, but who doesn’t really compete.
But if they don’t compete – why bother?
The companies mentioned could become either direct or indirect competitors if they chose to pivot.
It’s not worth losing sleep over your tertiary competitors, but it’s worth keeping an eye on any big changes or developments.
How do you identify your competition?
You should start by searching for your own brand on Google. Then, check the “People also search for…” section to see what other companies come up. Try searching on different search engines to get a variety of results.
Use your expertise and professional contacts to connect with your competitors and find out who they are connected to.
Try to stay active on LinkedIn and other platforms to connect with industry experts from all over the world.
The best way to stay current on industry affairs is to search for relevant hashtags and see what is being posted, liked, commented on, and discussed. Join in the conversation to make sure you’re relevant and up to date.
Analyzing your competitor’s brand strategy
Not being able to see a competitor’s brand strategy can be difficult without knowing any insider information.
Staying up to date on both their online and offline activity is the best way to show you what they’re up to.
- Who they are
- What they’re offering
- What makes them different
- What’s the price point
- Do they offer anything additional that you don’t?
Other companies will not have access to your brand strategy, so you unfortunately will not come across one of theirs.
To get a sense of how your company’s offerings stack up, compare them to your competitors’ current offerings, as well as to what they have done in the past. See if there is alignment, or if they have taken things in a new direction. Also, find out if there has been a positive response from consumers or press.
Make sure to examine everything from their pricing strategy to their social media campaigns.
What do they offer? Something new or have they gotten rid of things? Have they given any hints about where the market is going that you hadn’t seen?
Or, do something better!
Can you come up with a more creative way to top what they’re doing, or focus and capitalize on an area where they have room for improvement?
If your competitor is offering the same service as you and their messaging tells customers what they do, why not tell your customers why you do it, and see if you can provoke a better response.
Profiling your competitor’s brand identity
Before anything else, have you seen the products they offer or experienced their service yourself? Can you get your hands on any of their physical assets to take a closer look at what they’re up to?
You can decide how you want to be seen by others.
So, let’s start with the basics;
- What colors are they using?
- What does their logo and branded material look like?
- Is it impressive, does it fail to capture the imagination?
Take into account your competitor’s responses to the points below, as well as your own business’s standing, to get a better idea of where they position themselves in the market.
Ignore them, or embrace them. If a company’s identity is such that it attracts a certain segment of the market that you are not reaching, and you want to change that, you have two options: do nothing or accept them.
- Define your target market so intensely that you become the go-to option
- Widen your approach and offer something to grab the attention of their audience as well.
Your brand’s identity is crucial for making a good first impression. Keep in mind that you only have one shot at this!
Analyzing your competitor’s profile
When researching your brand’s competitors, you should always start by looking at their website.
Visit the website as if you were a customer and see how their customer journey through the site compares to your own.
Do they offer a business-to-business service? If so, consider pretending to be a customer in order to get more information.
If a company is selling physical products online, it would be a good idea to order one of their products (or ask a friend to do it). The company might be researching you too!
This will let you compare;
- Dispatch time
- Packaging
- Notification emails
- Web customer service
- Product quality.
Where is each website ranking on different search engines? Google is the most important, but it’s also worth looking at how they rank on others.
It’s important to create profiles of your own customers as well as research your competitor’s customer behavior.
Should I be looking at my competitor’s paid digital?
Definitely!
One of the things you should do when using paid traffic is to keep an eye on your brand competitors. This is part of your brand analysis strategy.
WhatRunsWhere is an online tool that helps you track what other brands are doing with their online advertising. With WhatRunsWhere you can see what kinds of ads they are creating, where they are running them, and how well they are performing. This information can help you create more effective ads and reach a larger audience.
Here’s a tip:
You can learn about your competitors’ paid advertising campaigns by searching for your brand name on Google.
What messaging are they using in their paid digital ads? Are their most popular ads all starting with a question, which is then solved in the body of the text, or do they just present themselves directly?
Look at the language that Google and Facebook Ads use. Who are they trying to reach with their ads, and what are their goals?
This can help you assess what is already working and what is not.
Looking into your competitors organic digital
Although it may seem obvious, monitoring the social media of your opponents is a crucial part of any campaign strategy. This is not new information to you, so you are already ahead of the game.
In addition to subscribing to their email alerts and newsletters, you can use tools like Hootsuite or Buffer to notify you of all relevant posts from their social platforms, saving you the hassle of looking through their posts on your Instagram account.
Are they posting pictures of their food on social media? From this, you can tell that their strategy is to promote their food.
If content creators are constantly promoting themselves and their work, will their audience see them as an authority figure? If they post a lot of infographics, do they have support from other experts in the field?
How are your brand competitors using their social media:
- Self promotion?
- Customer service?
- Strengthening their brand personality?
- Competitions?
- Paid ads?
From just a quick flick through their social media, you can see:
- Their levels of engagement
- What content goes down well, and what gets bombed
- Customer reactions.
Look at how they operate their social media accounts and how they communicate with their customers online.
Are your competitors still using traditional offline marketing?
Make sure you’re not getting so caught up in digital marketing that you forget about good old fashioned marketing methods as well. See if your competition is using traditional methods and whether it’s helping or hurting their brand.
Do they use the same or different marketing messages for offline and online promotions? Perhaps they advertise on billboards.
There is no set rule, but often times traditional marketing methods are used when targeting older audiences.
How to write a competitive analysis
Let’s go over the elements that should be included in a competitive analysis.
Scope out the competition and name them
In order to find your competitors, you have to know what you’re looking for. If you have a list of potential competitors, that’s great. If not, consider these questions: Who else is doing what you’re doing, or trying to do? Who is the closest competitor? Also, consider less obvious competitors, such as brands or products that may not be exactly the same as yours, but are similar in tone. Also, think about those who have a similar ethos. Even if they don’t pose a threat now, they could in the future if they develop something new.
ID their strengths and weaknesses
A SWOT analysis can be helpful when trying to understand the competition. Write down the names and products of each competitor, and then analyze their strengths, weaknesses, opportunities, and threats.
Pay attention to the details
What are your competitors’ marketing campaigns and what channels are they using? What keywords are they using? Are there any obvious keywords they are avoiding? Note your observations. You may find some interesting discoveries, so take detailed notes.
Get a little help from your friends – and the Internet
If you’re struggling to do research for your product, try talking to your colleagues, especially those who were involved in developing the product. They may be able to help you out or give you some useful information. Get hold of that material. You can also find a lot of useful information written by consumers and companies online if you’re willing to do some research. I recently bought a blender after doing extensive research online. I looked at the product descriptions, reviews, and user comments before making my decision. By looking at your competitor’s product reviews and social media feeds, you can understand what customers want and how they are responding. Although it may be time-consuming to go through primary sources, it is worth it because you will get a lot of useful information.
Turn your research inward and make recommendations
The purpose of a competitive analysis is to help you improve your own product’s positioning in relation to the competition. After identifying your competitors and what they are doing, turn your attention to your own product. How can you do things differently? What are your strengths in comparison to theirs? For ideas, look back at your SWOT categories of “S” and “O” specifically. Use the knowledge you’ve gained to come up with new ideas, rather than copying the competition.
Formalize your findings
Make detailed notes on each competitor and create a brand competitive analysis template that can be used by you and your colleagues. Assign one page (or slide) to each competitor/product. Include the competitor’s name and the specific product name on each page, as well as a SWOT grid. Make three main points for each competitor. In your conclusion, briefly summarize your findings and recommendations.
Make sure to note the date of your research somewhere in your records; this way you can keep track of how current your information is. A lot can change in a few months, so it’s helpful to notate when research was performed.
Practice makes perfect
The first time you perform a competitive analysis can be daunting. I personally ended up with a long list of brands, products, and notes. Once I went through the exercise a few more times, I got more of a sense of what I was trying to do – and what kind of information I was looking for. As with anything, practice makes perfect (or at least makes you more comfortable).
It can be helpful to look at someone else’s perspective in order to gain a new perspective. Try writing a competitive analysis for a company or industry that is not related to your own. This will help you to think outside of your own perspective and see things in a new way.