Have you ever run a competitive analysis for your business? If you have, how long ago? Most importantly, if you were to run a current one, could you do so efficiently and effectively?
If you’re unsure of the answers to these questions or your last analysis looked more like giving the competitor’s website a once-over, you might be missing out on important information that could help your business thrive.
Competitor Analysis vs. Trolling
So, what makes a competitor analysis (also called competitor monitoring) different from scrolling through your competitors’ websites or social media? Competitor analysis is a deeper dive into certain factors to gain a competitive advantage.
The purpose is to analyze your company’s strengths, weaknesses, opportunities, and threats (SWOT) by comparing your operations to what a similar business is doing. By determining what your competitors are doing right and wrong, you can capitalize on their weaknesses and borrow what’s working (like their customer service software) to get ahead.
Your competitors affect your success. They influence your market share and industry trends. Additionally, they affect your marketing, pricing, offerings, and operations. To study them is to get a jumpstart on getting ahead.
Advantages of a Competitive Analysis
What benefits await a business that regularly analyzes its competition? You stand to distinguish yourself in your industry and outperform your benchmarks. In addition, see what other opportunities could be in store for you:
- Develop stronger marketing and business strategies
- Fend off competitors
- Gain a greater market share
- Discover and capitalize on your unique selling points
- Keep up or get ahead of trends
- Learn what has worked or failed for others in your industry
- Identify opportunities for development and growth
- Set performance benchmarks
By studying your competitors, you can see what’s working (or isn’t) for them, identify gaps where your company can scoop in and grab a larger piece of the pie, meet industry standards, and stay on top of trends.
We’ll walk you through the process of performing a competitive analysis. We recommend that you analyze every few months as trends change so rapidly.
Determine Your Competitors
You’ll have both direct and indirect competition. Focus only on your direct competitors.
Direct competitors operate in your geographic area and offer a product or service that could pass as a close substitute. For example, if you are a building contractor, other building contractors in your area are your direct competition. They give your target market an exact alternative to what you provide.
Indirect competitors provide products that aren’t the same but could satisfy the same customer needs. Using this example, your indirect competitors would be DIY home improvement stores. They give your potential customers an alternative option to having someone do the job for them. Still, they don’t provide the exact same value you do.
Determine Offerings
Check out the kind and quality of products or services your competition provides and how their distribution channels. You may focus on quality over price or vice versa, while your competition focuses on offering discount pricing.
Research Sales and Results
Check on your competition’s sales strategies and results. You’ll want to gather information on aspects like their processes, sales volume, and revenue.
Pricing and Perks
What is your competitor’s price point? Do they offer additional value like robust customer success services?
Shipping Costs
Did you know that shipping costs highly influence online purchasing decisions? Cart abandonment rates decrease with discounted shipping prices. If free or cheap shipping options aren’t possible, consider giving your customers extra incentives to convert from browsing to buying.
Marketing Strategies
How does your competition market their products or services? Do they focus on cheaper pricing, high quality, or extra value? Are they using paid radio or TV ads or only social media?
Content
What content is your competitor publishing? Do they regularly post blogs? More importantly, what’s the quality of their output? Look over a sample size of their blogs to determine their caliber. Information containing grammatical mistakes isn’t valuable for businesses or their customers, no matter how abundant it is.
Technology
Check out their tech stack–the automation, software, or services they are using. For instance, if they have exceptionally high customer satisfaction with their customer support services, their provider could be the key to boosting your own.
Engagement
How are your competitors’ engagement rates with the content they are putting out? Does anything jump out as something potential customers are incredibly passionate about? Do any customer pain points stand out? What’s getting shared and linked, and by whom?
Content Promotion
How do your competitors promote their marketing content? What keywords are helping them rank higher in search engines (SEO)? How dense are the keywords within their copy, and do they link internally?
Social Media
What social media platforms are your competitors having the most success with? What are their engagement rates?
Each subject requires a SWOT analysis to find where to differentiate yourself from the competition.
Cautions
It can be challenging to find some of this information yourself or trust what you see online. It’s definitely time-consuming. For trustworthy information, you must avoid using incorrect data–your results will only be as good as the quality of your information.
Support
A CPA firm specializing in business strategy services can help you gather trustworthy data on your competitors and turn it into actionable goals. You’ll get helpful suggestions on everything from analytical software to do-it-yourself objectives. They’ll also complete much of the work for you and assure you it was done right.
