Doing a competitor analysis for your business sounds great in theory. You’ll dedicate a few days to researching, gathering, and digging up dirt on all of your competition, and then you’ll put it all into a beautiful report to share with the team that will be updated annually.
Cue reality. In between your five daily meetings, urgent requests, and other standing projects, you can’t string together enough time to do this analysis properly. Once you start looking into the data, you realize just how much there is. It’s difficult to stay on task and know which information to look into first.
No need to fear! Competitor analysis is a very important part of your business strategy, don’t get us wrong. But it shouldn’t monopolize all of your time. Here are the most important aspects to consider when looking at your competition and how to use them to your advantage.
A competitor analysis is the process of researching and analyzing your competitors’ strategies, strengths, and weaknesses to compare them to your own and potentially strengthen your own strategy.
It will give you a full picture of your industry, so you know where you stand. Are there needs you can fill? Is there oversaturation? Is there a trend you’re not aware of that could boost your performance?
Knowing the answers to these questions will help you in every possible way, from creation and design to sales and marketing.
You wouldn’t go into any other competition without knowing who you’re up against, so why should it be any different in business? Get a lay of the land before you dive into details so you can identify the companies to focus on.
It turns out, there are two types of competitors. Who knew?
Direct competitors are those with products and services very similar to yours who operate in the same locations. Think Coca-Cola and Pepsi, or L.L. Bean and Lands’ End.
Indirect competitors are those with products and services that address similar needs and pain points of your customers but are not the same. HelloFresh and ButcherBox are great examples. Both are subscription services that provide food regularly. However, one provides full meals with a variety of options to cook and prepare, and the other strictly provides meat. They both satisfy the convenience factor of home delivery kits, but their solutions are different.
Keep your eyes on both types of competitors. Yes, direct competitors present a more immediate “threat” to your market share, but indirect competitors are just one strategy move away from doing the same.
You can probably name your top competitors right now, but it’s a good idea to do some research to uncover any that are flying under the radar.
Google is your friend here. Try simply looking up your company name. Below the immediate results for your business, Google will list similar companies that people have searched for.
Pay attention to the ads that appear when you search your name or industry keywords as well. It’s common practice to bid on competitor’s names to catch the consumer’s attention.
You can also use your current customer base to identify competition. Make it a habit of asking new customers who their previous providers were and current customers who they are switching to if they decide to leave. Try to learn why they made a switch, so you know which pain points are most important to your customer base.
Direct competitors are likely going to have some similar product offerings to yours. You need to know the details so you can figure out how to differentiate your product based on certain specs, features, and benefits.
One important aspect of this analysis is pricing. If your products are similar in price, you know to focus on other features. If your products are cheaper than your competitors’, you can use that as a selling point. If your products are more expensive, you should anticipate this customer objection in advance and have other strategies in place to overcome it.
Getting information on a competitor’s inside sales strategy can be tricky unless you have an elaborate plan to infiltrate their ranks from within, which we don’t recommend.
But learning the basics about their sales process, performance, and distribution networks can give you an idea of the scope of the competition you’re facing.
Do they have a sales team? Do they work through dealers? How big is their coverage area? How quickly are they growing? What is their sales volume?
Answering these questions can tell you a lot about your own business strategy. Your competitors may have bigger coverage than you, but maybe there’s a gap or niche that you can fill to compensate.
Take a look at your competitor’s marketing materials to get a sense of who they are as a company. Again, if your products and services are similar, branding is one way to differentiate yourself. If they are serious and all business, try approaching it from a funny or sarcastic angle.
Content is king. If you’ve been following us for a while, you know this and lovingly embrace it. Analyzing your competitors’ content strategies will help you understand where you stand, what value you can provide for customers, and how you can approach the content game differently.
Start by looking at their website homepage. Is the content sales-focused or solutions-focused? Are they trying to solve customers’ problems or simply sell them something?
Next, look for any educational resources they offer. This includes blogs, case studies, white papers, FAQs, webinars, videos, etc. Take note of how often they publish new content and the quality of it. No matter how much they put out into the universe, they won’t make a dent if their content is poor quality.
As you’re looking through your competitors’ resources, monitor their SEO strategy. Look at their chosen keywords, links, title tags, image alt tags, etc. This will impact your own SEO and pay-per click strategy as you have to decide whether you want to go head-to-head with your competitors on the same keywords or take a different approach.
If your competitor’s content is on the weaker side, this is a great opportunity for you to gain an advantage. You can provide value to customers that no one else is providing.
If your competitor’s content is strong, don’t be intimidated. Take inventory of what they have to offer and plan your strategy around it. Don’t try to copy everything they do. Instead, think of how you can supplement with original content of your own.
The next stop on your analysis route should be at your competitors’ social media presence. Of course, monitor the number of fans and followers they have. Beyond that, you should review their overall strategy and the type of engagement they’re getting.
Which social platforms are they on? Do they use social media as a sales tool, a customer service tool, an educational tool, some combination of these?
Since you are competitors, you likely share a similar customer base to some extent. If their social media engagement is really strong, you know that they’ve hit on something with their followers, something that you could probably incorporate into your strategy as well.
As we mentioned earlier, one of the ways you can stand out from the competition is with great content. Any business should consider this strategy, but it can work especially well for small to medium-sized businesses that don’t have the same budget and resources as larger competitors to spend on advertising.
One way you can serve your customers better than your competitors is by answering their questions, addressing their concerns, and teaching them something new. All of this can be achieved with a solid inbound marketing strategy powered by strong content.
Whether you are new to the content game or you’re looking to refresh your digital marketing efforts, a book might be just the thing you need to stay ahead of your competition. ContentBacon can help you through the entire process, from outline and strategy development to launch. Find out more about blog to book.