What is a competitive analysis and how do you conduct one?

When was the last time you did a competitive analysis for your brand?

And most importantly, do you know how to do one efficiently?

If you’re not sure, or if the last “analysis” you did was a quick review of a competitor’s website and social media presence, you are likely missing out on important information that could help your brand grow.

What is a competitive analysis?

A competitive analysis is a strategy in which you identify key competitors and examine their products, sales and marketing strategies. That way, you can develop solid business strategies that will improve those of your competitors.

A competitive analysis can help you understand how your competition works and identify potential opportunities where you can outperform them.

Plus, you can keep up to date with industry trends and make sure your product consistently meets and exceeds industry standards.

Let’s examine a few more benefits of doing competitive research:

  • Helps you identify what is unique about your product Value Proposition and what makes your product different from that of the competition, which may affect future marketing efforts.
  • Allows you to identify what your competitor is doing right. This information is critical to staying relevant and ensuring that both your product and your marketing campaigns exceed industry standards.
  • Lets you know where your competitors are falling short – this helps you identify areas of opportunity in the market and test new, unique marketing strategies that they haven’t used.
  • Find out what’s missing in a competitor’s product from customer reviews and think about how you can add features to your own product to meet those needs.
  • Provides you with a benchmark against which to measure your own growth.

Already convinced? Next, let’s examine how you can conduct a competitive analysis for your own business.

Competitive analysis in marketing

Every brand can benefit from regular competitor analysis. By performing a competitor analysis, you can:

  • Identify gaps in the market
  • Development of new products and services
  • Uncover market trends
  • Market and sell more effectively

As you can see, learning any of these four components puts your brand on the path of achievement.

Next, let’s dive into 12 steps you can take to conduct a comprehensive competitive analysis.

How to conduct a competitive analysis

  1. Determine who your competitors are.
  2. Determine which products your competitors are offering.
  3. Find out about your competitors’ sales tactics and results.
  4. Check out your competitors’ prices and the perks they offer.
  5. Make sure you meet competitive shipping costs.
  6. Analyze how your competitors market their products.
  7. Be aware of your competition’s content strategy.
  8. Find out which technology the competition is using.
  9. Analyze the level of engagement with your competitor’s content.
  10. Watch how they promote marketing content.
  11. Check out their social media presence, strategies, and go-to platforms.
  12. Do a SWOT analysis to identify your strengths, weaknesses, opportunities and threats.

1. Determine who your competitors are.

First of all, you need to find out who you are really competing with so that you can accurately compare the data. What works in a business similar to yours may not work for your brand.

How can you do that?

Divide your “competitors” into two categories: direct and indirect.

Direct competitors are companies that offer a product or service that could be considered a similar replacement for your product or service and that operate in the same geographic area.

On the other one indirect competitor is one that offers products that are not the same but can meet the same customer needs or solve the same problem.

It seems simple enough on paper, but these two terms are often misused.

When you compare your brand, You should only focus on your direct competitors. This is something a lot of brands get wrong with.

Let’s take an example: Stitch Fix and Fabletics are both subscription-based services that sell clothing on a monthly basis and serve a similar audience.

However, if we take a closer look, we can see that the actual product (in this case the clothing) is not really the same. One brand focuses on stylish everyday outfits, while the other is only focused on workouts.

Yes, these brands meet the same need for women (they have trendy clothes delivered to their doorstep every month), but they do so with completely different types of clothing, making them indirect competitors.

This means that Kate Hudson’s team at Fabletics doesn’t want to spend their time on Stitch Fix too much as the audience is likely to be very different. Even if it’s even minor, that tiny variation is enough to make a big difference.

This does not mean that you should completely toss your indirect competitors out of the window.

Keep these brands on your radar as they can move positions and move into the direct competitive zone at any time. Using our example, Stitch Fix could start a training line that would certainly change something for Fabletics.

This is also one of the reasons you might want to routinely conduct competitive analysis. The market can and will change at any time, and unless you explore it constantly, you won’t be aware of those changes until it’s too late.

2. Determine which products your competitors are offering.

The heart of any business is its product or service, which makes this a great place to start.

You want to analyze your competitor’s entire product line and the quality of the product or service they offer.

You should also take note of their prices and any discounts they may offer customers.

Some questions to consider are:

  • Are you a low cost or a high cost provider?
  • Do you mainly work with volume sales or single purchases?
  • What is your market share?
  • What are the characteristics and needs of your ideal customers?
  • Do they use different pricing strategies for online purchases versus brick and mortar?
  • How does the company differ from its competitors?
  • How do you sell your products / services?

3. Find out about your competitors’ sales tactics and results.

Running a sales analysis of your competitors can be a little tricky.

You should find the answers to the following questions:

  • What is the sales process like?
  • What channels do they sell through?
  • Do you have multiple locations and how does this give you an advantage?
  • Are they expanding? Scale down?
  • Do you have affiliate resale programs?
  • What are the reasons for your customers not to buy? For ending your relationship with the company?
  • What is your annual income? What about total sales?
  • Do they regularly discount their products or services?
  • How much is a salesperson involved in the process?

This helpful information will give you an idea of ​​how competitive the sales process is and what information to use to prepare your sales reps for competition in the final buying phase.

For publicly traded companies, you can find annual reports online, but you need to do some research to get this information from privately held companies.

You can find some of this information by browsing your CRM and reaching out to those customers who have indicated they are considering your competitor. Find out why they chose your product or service over others.

To do this, run a report that lists all of the potential stores that had an identified competitor.

If you are not currently collecting this data, contact Marketing and Sales to implement a system of asking prospects about the other companies they are considering.

Essentially, they need to ask their leads (either through a form field or during a face-to-face sales pitch) to determine who their current service providers are, who they have used in the past, and who else they are considering during the buying process.

Once a competitor is identified, dig deeper into your sales team by asking why they’re considering switching to your product. If you’ve already lost the deal, Make sure you are tracking the prospect to see why you lost to your competitor. Which services or functions attracted the prospect? Was it about the price? What is the potential customer’s impression of your sales process? If they have already switched, find out why they made that decision.

By asking open-ended questions, you’ll get honest feedback about what customers find attractive about your brand and what customers might turn away.

Once you’ve answered these questions, it’s time to start exploring your competitor’s marketing efforts.

4. Check out your competitors’ prices and the perks they offer.

There are a few important factors that are critical to properly pricing your product – and one of the most important is understanding how much your competitors are charging for a similar product or service.

If you feel that your product offers superior features over those of a competitor, you can consider making your product or service more expensive than industry standards. However, if you do, make sure your sales reps are ready to explain why your product is worth the extra cost.

Alternatively, you may feel that there is a void in your industry for affordable products. If so, you may want to charge less than the competition and target potential customers who don’t want to break the bank for a good quality product.

Of course there is other factors that help correctly price a productHowever, it is important to keep track of industry prices to ensure that you rate your product in a way that will appear appropriate to potential customers.

Also, look at the benefits your competitors offer and how you can use those benefits to compete. For example, competitors may offer a significant referral discount or a one-month free trial. These perks could be the reason you are losing customers. If it seems reasonable for your brand, consider where to find these perks – or offer some unique perks if competitors aren’t offering them.

5. Make sure you pay competitive shipping costs.

Did you know that shipping is expensive? Main reason for abandoning the car?

Nowadays, free shipping is a huge perk that can make consumers choose one brand over another. If you work in an industry where shipping is an important factor – like ecommerce, for example – you should look at competitor shipping costs and make sure you are meeting (if not exceeding) those prices.

If most of the competitors offer free shipping, consider the option for your own business. If free shipping isn’t a practical option for your business, consider other ways you can differentiate yourself – including loyalty programs, vacation discounts, or social media giveaways.

6. Analyze how your competitors market their products.

Analyzing your competitor’s website is the fastest way to measure their marketing efforts. Take note of one of the following items and copy and paste the specific URL for future reference:

  • Do you have a blog?
  • Do you create white papers or e-books?
  • Do you publish videos or webinars?
  • Do you have a podcast?
  • Do you use static visual content like infographics and cartoons?
  • What about slide decks?
  • Do you have a FAQ section?
  • Are there any featured articles?
  • Do you see press releases?
  • Do you have a media kit?
  • What about case studies?
  • Do you publish buying guides and data sheets?
  • Which online and offline advertising campaigns are carried out?

7. Be aware of your competition’s content strategy.

Then look at the amount of these items. Do you have several hundred blog posts or a small handful? Are there five white papers and only one e-book?

Next, determine the frequency of these content items. Do they publish something new every week or once a month? How often does a new e-book or case study appear?

If you come across a robust content archive, your competitor is likely to publish regularly. Depending on the topics covered, this content can help you improve lead generation strategies.

From there, you should move on to evaluating the quality of their content. After all, if the quality is lacking, it doesn’t matter how often they post as their target audience won’t find much value there.

Select a small handful of samples to review rather than tackle each individual piece for a better handle on the process.

Your sampler should have content elements that cover a variety of topics so that you can get a pretty complete picture of what your competitor is sharing with their target audience.

When analyzing your competitor’s content, consider the following questions:

  • How accurate is its content?
  • Are there any spelling or grammatical errors?
  • How deep is its content? (Is it an introductory level that just scratches the surface, or more advanced topics with high level ideas?)
  • What tone do you use?
  • Is the content structured in a readable manner? (Do they use bullets, bold headings, and numbered lists?)
  • Is their content free and available to everyone, or do their readers have to sign up?
  • Who is writing your content? (In-house team? One person? Several participants?)
  • Do their articles have a visible line or biography attached?

As you continue to scan the content, keep an eye out for the photos and images your competitors are using.

Are you quickly scrolling past general photos, or are you impressed with custom illustrations and images?If youWhen using photos, do you at least have overlays of text offers or calls to action that are specific to your company?

If your photos are custom, do they come from outside graphic professionals or do they appear to have been created in-house?

When you have a solid understanding of your competitor’s content marketing strategy, it’s time to see if it really works for them.

8. Learn what technology is stacks your competitors’ use.

Understanding what types of technology the competition is using to help your own business can be crucial Reduce friction and increase momentum within your organization.

For example, you might have received positive reviews about a competitor’s customer service – while doing research, you learn that the customer is using powerful applications Customer service software You haven’t taken advantage of it. This information should enable you to outperform your competitors’ processes.

Enter the company’s URL to find out what software your competitors are using Built withThis is an effective tool for finding out what technology your competitor’s website is running on, as well as third-party plugins that range from the analytics system to CRMs.

Alternatively, you can look at competitor job vacancies, particularly by engineering or web developer roles. The job posting is likely to mention what tools a candidate needs to be familiar with – a creative way to learn about your competitors’ technology.

9. Analyze the level of engagement with your competitor’s content.

To gauge how attractive your competitors’ content is to their readers, you need to see how their target audience reacts to what they post.

Check the average number of comments, shares, and likes on your competitor’s content and find out if:

  • Certain topics get a better response than others
  • The comments are negative, positive or mixed
  • People tweet more about certain topics than others
  • Readers respond better to Facebook updates on specific content
  • Don’t forget to note if your competitor is categorizing their content using tags and if there are social media follow and share buttons on each content. Both will be an ect engagement activity.

10. Watch how they promote their marketing content.

From the engagement you can go straight to your competitor’s content promotion strategy.

  • Keyword density in the copy itself
  • Image ALT text tags
  • Using the internal link

The following questions can also help you prioritize and focus on what to look for:

  • What keywords are your competitors focusing on that you haven’t accessed yet?
  • What content from them is highly shared and linked? How does your content compare?
  • Which social media platforms does your target group use and is it most active on them?
  • What other websites are linking back to your competitor’s website but not yours?
  • Who else shares what your competitors publish?
  • Who is directing traffic to your competitor’s website?
  • What is the difficulty level for the keywords you want to focus on? There are several free (and paid) tools that you can use to fully evaluate your competitor’s search engine optimization.

11. Check out their social media presence, strategies, and go-to platforms

The last area you want to evaluate in terms of marketing is your competitor’s social media presence and engagement rate.

How does your competition drive engagement for their brand through social media? Do you see social sharing buttons for each article? Does your competitor have links to their social media channels in the header, footer or elsewhere? Are these clearly visible? Are they using calls-to-action with these buttons?

If your competitors are using a social network that you may not be on, learn more about how this platform can potentially help your business as well. To determine if a new social media platform is worth your time, check out your competitors’ engagement rates on these websites. First, visit the following websites to see if your competition has an account on these platforms:

  • Facebook
  • Twitter
  • Instagram
  • Snapchat
  • LinkedIn
  • Youtube
  • Pinterest

Then note the following quantitative elements from each platform:

  • Number of fans / followers
  • Frequency and consistency of publication
  • Content retention (do users leave comments or share their posts?)
  • Virality of content (how many releases, repins and retweets do your posts get?)

With the same critical eye that you used to judge your competition’s content marketing strategy, use a fine comb to analyze their social media strategy.

What kind of content are they posting? Are they more focused on getting people to landing pages, which leads to new leads? Or do they publish visual content to drive engagement and brand awareness?

How much of this content is original? Do you share curated content from other sources? Do these sources contribute regularly? What’s the overall tone of the content?

How does your competition interact with their followers? How often do your followers interact with your content?

After you’ve gathered this data, you’ll generate an overall grade for the quality of your competitor’s content. That way, you can compare the rest of your competitors using a similar rating scale.

12. Perform a SWOT analysis to determine their strengths, weaknesses, opportunities and threats

As you evaluate every component in your competitor analysis (business, sales, and marketing), you get into the habit of doing a simplified SWOT analysis at the same time.

This means that you take note of your competitor’s strengths, weaknesses, opportunities, and threats every time you rate an overall grade.

Some questions to get started are:

  • What is your competitor doing really well at? (Products, content marketing, social
    Media, etc.)
  • Where does your competitor have the advantage over your brand?
  • What is the weakest area for your competitor?
  • Where does your brand have the advantage over your competitor?
  • What could you do better?
  • In what areas would you consider this competitor a threat?
  • Are there opportunities in the market that your competitor has identified?

You can compare your weaknesses with your strengths and vice versa. This way you can better position your company and uncover areas for improvement within your own brand.

How is your company stacking up at the moment?

Before you can accurately compare your competition, you need to establish a baseline. This is also helpful when a SWOT analysis needs to be done.

See your business, sales, and marketing efforts against the same metrics that you use to evaluate your competition.

Write down this information as you would with a competitor and use it as a basis for general comparison.

Are you ready to get started with the full eBook and template?Click here to access the full Competitive Analysis Kit.

Editor’s note; This post was originally published before July 2018, but updated in November 2019 for completeness.

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