Conducting a competitor analysis can be difficult, but not impossible. If you have recently started a new business, chances are you will have trouble with the competitor analysis. For newbies, it can be time-consuming and puzzling. Most of the information is hard to acquire and understand. Without the proper knowledge, it may take you ages to analyze the gathered data.
However, you can excel at conducting competitor analysis with the help of a few tactics. Before finding out how to execute a competitor analysis properly, let’s get the hang of this term first.
What is a Competitor Analysis?
Everyone has heard the cliché statement that it is crucial to say a step ahead of the competitors. The main question here is how to make that happen, especially if you are a newcomer? The simple answer to this query will be through analyzing and monitoring your competitors regularly. By observing their behavioral patterns, you will predict their future activities and stay ahead of their game.
It is the simplest definition of competitor analysis. Additionally, you will gain insights into the competitor’s weaknesses and strengths and gain competitive advantages by exploiting areas they are not working on.
Through analyzing your competitors’ movements, you will gain a tremendous advantage of making much-needed developments in your business. It will also provide you a competitive edge, with the ability to discover more about your customers and become their ultimate favorite.
What is Competitive Research?
Whatever information you collect regarding competitors is usually known as “competitive research.” It is more complicated than doing a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis or knowing who the market leader is. Therefore, the best competitor analysis tools are needed to perform a competitor analysis properly.
Before you begin with a competitor analysis, please know that gathering competitive research is crucial to your business’s success.
It will help identify the market trends, with effective use of competitor strategies for your good. To lure everyone towards acknowledging your online business presence, you will have to dive deep into the competitive analysis landscape.
After learning about competitor analysis and the benefits of competitive research, let’s find out how to perform a competitor analysis.
Ways to Conduct a Competitor Analysis:
1. Find your competitors
Start by identifying who you are competing with and who are your non-industry rivals. As soon as you list down their names, you will be able to:
- Focus on capitalizing upon their strengths and weaknesses to kick start your business,
- Understand their business landscape and find different ways to position your brand successfully, and
- Keep up with your competitors, so you do not have to worry about getting stalked by them.
This process of identifying your competition is called “competitive intelligence gathering.” Through Amazon and Google, you can quickly locate your competition. Start with a simple Google search about the name of your business, product ideas, and similar businesses. Afterward, explore your competitors’ digital footprints by viewing their web content and social media, niche market and communities, etc.
2. Categorize them
After locating your competitors, it is time to categorize them into different levels.
- Primary Competitors:
Put the most competitive businesses in the preliminary competition list. They are your direct competitors with the same products and services.
- Secondary Competitors:
Assign a secondary competition category to the ones who fall below the primary competition radar. These are the competitors selling similar products but to an entirely different target audience.
- Tertiary Competitors:
The tertiary competition category includes competitors with business offerings somewhat similar to yours but still very much different.
After categorizing, document every competitor’s necessary information, such as business name, locations, mission statement, business offerings, etc.
3. Inspect their website and consumer experience
Now comes the essential part of the whole process; evaluating the competitor’s websites. To do it effortlessly, keep the following items in close consideration.
- How detailed is their product shoot? How do they portray their products or services over the internet?
- How do they communicate the minute details about their product offerings?
- Do they have thorough product descriptions? Which kind of information do they incorporate, and what is missing?
- What is their call to action? How do they cater to different target markets?
- Do they have an active email list or any official newsletter?
- Where have they positioned social media icons, and why?
- Is their website mobile-friendly and optimized accordingly?
- How can the audience reach out to them? Do they have valid contact information?
- How to communicate through email, chatbots, or contact forms? How much time do they take to respond?
- How frequently do they run promotional and marketing campaigns? What benefits can the customers and the business avail from such campaigns?
4. Evaluate their market positioning
Knowing your competitor’s marketing strategy will let you strategize in an advanced manner. You will recognize the current market trends and expectations consumers have from businesses. Therefore, explore their website and find answers to the following questions:
- What do they offer to their customers? How do they price their business offerings?
- Are they building a valuable brand experience for their customers or just focusing on generating sales?
- How do they differentiate their products or services from their competitors? Do they highlight any product features and benefits? If yes, then what are they?
- According to them, what makes their services or products so distinctive and beneficial?
These questions will guide you towards properly evaluating their market positioning. To collect as much data as possible, ensure to do the following:
- Follow and subscribe to their blog.
- Sign up for their official newsletter.
- Follow them on different social media platforms.
- Buy their product or service (to check the product quality, packaging, and pricing).
5. Comparing their pricing with yours
Please be wary that your pricing strategy is one of the crucial aspects to accomplish business growth. Moreover, it can potentially become your competitive advantage. By comparing your competitor’s pricing with yours, you will learn various things. For instance, you will find out how much money the target audience is willing to pay you or your competitor. Just like that, you will understand which prices will be beneficial for your business.
While comparing the prices, be sure to look everywhere. From Google and eBay to Amazon and Alibaba, check and match the competitors’ prices.
The Bottom Line:
Lastly, keep the gritty details about your competitors in mind. Find out about their expansion plans and stay updated with their current business activities. Always remember that conducting a competitor analysis does not mean to become obsessed with your competitors. The goal is to utilize your findings in the best way possible and make the most of them.