Regardless of what industry your business is in, there is some level of competition. Naturally, you have the utmost confidence in the quality of your services or products, and you work hard to deliver the very best for your consumers, but you should never forget about your competitors. Do you know who your competition is in your industry? Do you know what strategies they are using for success? If your answer is no, it is time to employ a go-to-market strategy called competitive analysis. Conducting a competitive analysis is a proactive approach to business success and can help you better understand your market, learn more about your customers and their needs, and make better decisions. Today the experts at the Hive share what competitive analysis is and why it is an essential go-to-market strategy you should utilize.
Why Is a Competitive Analysis Important?
It is a competitive landscape out there. As a business owner, you need to stay on top of industry trends, ensure your products are meeting and exceeding standards, and identify potential opportunities where you can outperform your competitors. That is why you need to do a competitive analysis. A competitive analysis is a method that involves classifying your competitors to gain insight and understand their strengths and weaknesses in comparison to your own. By doing so, you can find gaps in the market and implement more powerful business strategies to give you a competitive advantage over others. Below we dive into the steps you can take to conduct a comprehensive competitive analysis.
Determine Who Your Competitors Are
There are three main types of competitors:
- Direct – Direct competitors offer the same products or services as you, target the same audience, and serve the same or similar purpose as your business.
- Indirect – Indirect competitors offer similar products or services as you but their end goals or how they meet these goals are often different.
- Substitute – Substitute competitors are potential competition, meaning they might sell similar products or services to yours, but they underperform.
By studying your competitors, you can find your market’s best features and trends and spot shifts or changes promptly. Best practices suggest analyzing 7-14 direct and indirect competitors within your market.
Research Your Competitors’ Sales Tactics and Results
This step can be tricky, but it is crucial to find the answers to these questions about your competition, such as:
- What does their sales process look like?
- What channels do they sell through?
- Do they have multiple locations?
- Do they have the means to expand, or are they scaling down?
- What are the reasons customers do not buy from them?
- What is their yearly revenue?
- Do they regularly run discount or incentive programs?
While this information might seem difficult to come by, it will give you an idea of how competitive the sales process is. Most of this information can be found through online annual reports if the company is publicly held. You could also do a deep dive into your CRM and find customers who were considering your competition. Reach out and find out why they chose your company over the others.
Analyze Their Pricing and Perks
When pricing your goods and services, you always want to look at your competitors and industry standards. Whether you feel your products are superior or there is a gap for affordable products in your industry, it is vital to stay on top of industry pricing. Additionally, you can research perks or incentives your competitors offer and how you can match them or come up with some unique ones of your own.
Study Their Marketing and Content Strategies
A quick look at your competitor’s website will help you measure their marketing and content strategies. Take note if they have a blog, post videos or webinars, create whitepapers or ebooks, have a podcast, an FAQ section, share press releases or case studies, and what campaigns they are running. It is also crucial to look at the overall quality and quantity of these items. That way, you can establish what is and is not working and what to share with your target audience.
Examine Their Social Media Presence, Strategies, and Platforms
How does the community interact with your competition? What is their engagement like? What social media platforms are they using? Understanding your competitor’s social media presence can help you create an effective strategy that improves brand awareness, promotes engagement, and drives customers to your website.
Competitive Analysis Tools from beMarketing
Whether you are an entrepreneur in a startup environment or an owner of a well-established business, a competitive analysis can help you get a better picture of your competition so you can avoid pitfalls and mistakes and imitate their successes. While they take effort to complete, they are worth the time. If you are interested in learning more about an analysis or do not know where to start, the team at beMarketing has the necessary competitive analysis tools to help you achieve your long-term goals. Contact us today to get started on a project.