If you want your business to stand out and succeed in our noisy, competitive world, you need an edge. That edge, or competitive advantage, comes from giving your customers something they can’t easily find elsewhere. Whether it’s better prices or a better process, the key to unlocking your competitive advantage is understanding what your competitors are up to. What kind of value are they providing that encourages customers to buy? Keeping pace with (and then pulling ahead of) other businesses in your industry starts with conducting a competitive analysis.
Based on research and observation, a competitive analysis lets you evaluate your competitors’ strengths and weaknesses. By getting a better understanding of what these companies are doing right or wrong, you’ll be able to create a more effective plan to promote your product or service.
A competitive analysis can reveal both opportunities and threats to your business, and by acting on this information, you can turn what you know about the competition into a competitive advantage.
To conduct a competitive analysis, you should start by putting together a competitor array. This is a simple method of ranking your competitors, to show you where everyone stands – your business included.
You’ll first need to know who your competitors are, so you can find out some basic facts about them. Take a look at your rivals’ websites, print materials, and social media pages, then follow these four easy steps:
Examining your competitors’ ads and other promotional platforms can tell you a lot about their sales approach and target markets, and that’s important. When marketing resonates with a customer, they’re more likely to choose that company over another.
Exploring your competitors’ marketing plans can disclose:
Monitoring changes in your competitors’ advertising over time can also keep you in the know about pricing or service updates, branding overhauls, and new product distribution channels.
Here’s what you need to keep an eye on:
The same questions you should be asking about your own website apply when assessing a competitor’s. What’s your first impression of the site? Is it laid out attractively, and is it user-friendly? Does it load well from a mobile device? Note any customer reviews, testimonials, or interactive features. Don’t forget to check how current and popular their company blog is.
Which social media platforms are your competitors actively engaged on? It’s important to get a feel for how widely and by whom they’re followed in terms of posts and comments.
Do your competitors make use of brochures, newspaper and magazine ads, or online directories? Take note of what features they emphasize, and how they encourage their customers to respond.
Do your competitors offer free webinars or downloads, participate in community or charity happenings, or host regular sales events?
It can be helpful to know who your competitors are connected to in terms of affiliate sites or local businesses. You may even want to run a separate competitive analysis on these advertising partners.
Finally, make a point of checking out your competitors’ SEO practices. What are they ranking for? Do they rank well for the search terms your customers might use?
Digging a little deeper will reveal even more about what makes your competitors tick. One way to do this is through competitor profiling. Creating a profile of your business rivals can give you detailed information about their backgrounds, who works for them, and their financial situations.
By combining this data into one resource, your business will have a practical guide for devising, implementing, and fine-tuning an effective and ongoing competitive strategy. Remember, the more you know about your competitors, the more significant your competitive advantage will be.
Competitor profiling can:
Information about rival companies can often be gleaned from the internet. Some will take a little more work to collect. Consider interviewing mutual customers, researching your competitors’ trade associations or annual reports, and attending trade shows or other promotional events where you can discreetly find out more about them.
When it comes to analyzing the competition, it’s not only the rivals of today you have to worry about – it’s the ones who may come along tomorrow. New competitors show up in the marketplace all the time, especially when business is booming and relatively easy to break into.
One of the best reasons to conduct a competitive analysis is to avoid blind spots where future competitors are concerned. Making this analysis a regular part of your business strategy offers great preventative benefits like:
Just as important as performing a competitive analysis is acting on the results. Take what you learn from your competitors to make your business better – whether that means adjusting your prices, exploiting unused advertising routes, or exploring the promise of a new target market.