You have a business idea and want to start marketing your business, but you've realised that you have no idea how you should be marketing it. You can see your competitors around you making it look easy, so you start to wonder what their secrets are. This is where you can look into competitor analysis.
This doesn't just mean a quick look through your competitor's website or social media channels. You need to go deeper than that.
So what are some of the steps involved in carrying out a competitor analysis?
1. Find out who you're competing against
You need to work out who you're really competing against. You might think you're competing against some big names and you want to be in the same pool as them, however, there may be smaller brands that offer closer to what you do that you're not even considering looking at.
So, how do you know who's who? You simply divide your competitors into two categories: direct and indirect.
Direct competitors - these offer a service or product that could pass as a similar substitute to your own. They also work in a similar geographic location. Therefore they are directly competing with you.
Indirect competitors - their products or services are different from yours, but they could satisfy the same customer needs. Therefore they are indirectly competing with you.
Many businesses choose to only focus only on their direct competitors seems these are the biggest threat to them. However, you should also keep an eye on your indirect competitors because their positions can change at any time, leading them to become direct competitors.
2. Find your overlap
During this step, you need to look at what your competitors are offering and what makes them different from you. This can help you to find your niche in the market.
Some questions you need to consider are:
- What is their price point? Are they high-cost or low-cost?
- Do they have repeat custom or are they focusing on one-off sales?
- Do they have a different pricing structure for online sales compared to in-store purchases?
- How do they differentiate themselves from their competitors?
- What is their distribution model?
- What do their ideal customers look like?
Once you know the answers to these questions you can start to see where you are positioned compared to your competitors.
3. Look at how your competitors are marketing their products
The main way to do this is to look at their website and note down any features of it that you like, along with the URL so that you can go back later if needed.
You might like to note some of the following:
- Do they have an active blog section?
- Have they created any whitepapers or ebooks?
- Do they post videos about themselves?
- Have they ever created a podcast?
- What sort of images are they using? Have they ever used infographics or cartoons?
- Do they have a relevant FAQ section?
- Have they published any case studies about their work or their clients?
- Have they published any buying guides?
- Are they running any other form of online or offline advertising?
By understanding where your competitors are positioning themselves and what content they are creating, you can start to see the standard of content you will have to beat.
4. Can you discern any type of content strategy from your competitor?
You might have found that your competitor has a blog section, but then seen they only have 10 posts on there, with the most recent being over a year ago. This can tell you that blogging isn't high on their priority list, so they must be carrying out a different lead generation strategy.
Also, look at the quality of the content they're putting out. If it's poor quality, it's likely that users are disregarding it, no matter how often they are posting it.
Choose a sample of their work and ask yourself the following questions when you read it:
- Is this content accurate?
- Are there any errors with spelling or grammar?
- Is it in-depth content? Or does it just scratch the surface of the topic?
- What tone of voice are they using?
- Does the content have an easy-to-read structure? Is it all one paragraph, or does it have headings and bullet points?
- Is the content free? Or do you need to sign up and opt in?
You also need to consider the images they are using. When you're reading a blog post that's separated by custom images, it can lead to a better experience than one that only uses stock images.
5. Do people engage with the content your competitors are putting out?
Look through their social media channels and see how many people are liking, sharing and commenting on their posts. From this you can discern a number of things:
- Whether followers like certain types of content rather than others
- Whether their posts are gaining positive or negative comments, therefore whether users do/do not like it
- Do users respond better in one channel than another?
6. Check out the social media channels they are using
How a company presents themselves on social media can say a lot about who they are. Are they a fun loving company who regularly do team-bonding exercises? Or are they all business and only post about their products and pricing?
Whatever they're posting about, check out where they're posting it. Are they only using certain channels to promote themselves? What is their tone of voice like on different channels? Is there a gap they aren't yet leveraging?
Don't forget, you want to be just as visible as your competitors, so you need to be engaging in the same areas they are.
Take a note of the different platforms your competitors are on and then look at the following:
- The number of fans / followers they have on the platforms
- How often they are posting (is it consistent?)
- How many of their followers are engaging with their content?
- Do they create their own content, or is it a reshare of content they have seen elsewhere?
7. Learn your competitors strengths and weaknesses
Without knowing what makes your competitors good or bad at what they do, you won't know the areas you need to strong in to stand out from them.
One such way of finding out these strengths and weaknesses is to carry out a SWOT analysis.
You will need to do this for each area of your competitor's business, such as their website, social media, buying process and overall marketing.
You will need to be making a note of things such as:
- What is your competitor doing well?
- Are there any advantages they have over your brand?
- What is your competitors weakest area?
- Are there any advantages your brand has over theirs?
- What can their brand be doing better?
- Are there any gaps in the market that your competitor hasn't leveraged yet?
- Are there any ways you can leverage their weaknesses?
- Why do you consider this competitor to be a threat?
- Are there any gaps in the market that your competitor has leveraged that you haven't yet?
All this is well and good, but why should I be doing it?
Regular competitor analysis can give you an insight into what your competitors are doing and how well they are doing it. This can allow you to see if there are any areas of your business that needs improving.
It can also give you an idea of whether there are any new opportunities in your target market that you are yet to take advantage of.
Just be aware, your competition changes all the time. There are new competitors that enter the market and old ones that leave it. If you're not regularly carrying out your competitor analysis then there are things you could miss.