Competitor analysis is essential for any business owner or marketer looking to succeed and stand out in their industry. By taking the time to thoroughly analyze your competitors, you gain crucial insights to set effective business strategies, carve out your niche, and fully understand your competitive landscape.
Conducting regular competitor analysis should be built into your standard market research and business planning. In this article, we’ll break down step-by-step how to do a complete competitive analysis so you can extract the actionable data you need to make strategic decisions for your company.
What is Competitor Analysis?
Competitor analysis, also known as competitive analysis, involves evaluating the strengths and weaknesses of your rivals to formulate effective strategies. It provides intel on the products and services your competitors offer, their marketing tactics and strategies, pricing, business models, SEO keywords, target audiences, and more. With this information, you can critically evaluate your own business to determine where you currently stand against competitors and how to position yourself better going forward.
Why Conduct Competitor Analysis?
Understanding the market and your competitors provides valuable insights into:
- Market Dynamics: Analyzing competitors helps you grasp the overall market structure and identify key players.
- Identifying Trends: Keep track of industry trends and changes, enabling you to adapt your strategies accordingly.
- SWOT Analysis: Evaluate your competitors’ strengths, weaknesses, opportunities, and threats to refine your own business strategies.
- Market Research: Gain insights into customer preferences, allowing you to tailor your products or services.
How To Do Competitor Analysis: Step-By-Step
Step 1: Identify Your Competitors
The first step is to develop a comprehensive list of competitors. These fall into two main categories:
- Direct competitors – Businesses offering nearly identical products and targeting the same customers
- Indirect competitors – Businesses with similar products that compete for the same consumer dollars
To begin identifying your competitors:
- Search online for businesses providing products in your niche
- Review customer feedback to see what other brands they reference
- Check out exhibitors at your industry’s trade shows
- Study ads running in your target publications or websites
- Ask your customers what other companies they have purchased from
Make note of key details about the products and services each competitor provides, their business models and marketing strategies. Identify which are your direct competitors and which are more indirect. This can aid in determining which to closely monitor and benchmark against versus those to merely remain aware of.
Step 2: Research Competitors In-Depth
Once you have a list of key competitors, the next step is researching them in greater depth.
Areas to investigate for each competitor include:
- Website – Conduct a comprehensive review of competitors’ websites, looking carefully at design and usability, offerings, messaging, content marketing, calls-to-action, and more. Use tools like SEMrush to uncover keywords and search volume as well.
- Social media – Check all their social media profiles to analyze content, follower counts, engagement levels, messaging strategies, special offers or features promoted, etc.
- Pricing – Compare your pricing models side-by-side. Make note of unique pricing like bundles, memberships, subscriptions, or discounts offered.
- Customer service – Investigate ease of contacting support teams via chat, email, phone, service portals or user forums. Assess knowledge level, response times, tone, and helpfulness.
- Reviews and ratings – Search for customer feedback across review platforms. Gather sentiments, trends, pain points, competitor strengths/weaknesses mentioned.
- Business information – Research when the company was founded, number of employees, revenue, locations, leadership team, mission/vision, culture, certifications, etc. Identify competitive advantages based on this intel.
Ensure you compile this data into a structured framework or template for distilling insights and drawing comparisons.
Step 3: Analyze and Compare Offerings Side-by-Side
Now conduct an in-depth analysis to compare your business against competitors. Assess how you measure up across critical areas like:
Products and services
- Product range, categories, and specialty offerings
- Pricing and payment options
- Bundling options or package deals
- Customization and personalization capabilities
- Product/service quality and value
Marketing and sales
- Overall branding, messaging, and tone
- Email marketing campaigns effectiveness
- Social media follower counts and engagement
- SEM and SEO efforts and keyword rankings
- Promotional discounts and sales
- Partnerships or affiliate marketing
Ease of use
- Website design, usability, features
- Mobile responsiveness and app availability
- Online account setup/management
- Ordering, checkout, and payment processes
- Navigation, search, menus, and site IA
- Response rate and resolution level for online chats
- Average phone hold times and call resolution rate
- Email/form response time and resolution rate
- Forum/community engagement level
- Account management resources
- Self-service FAQs and knowledge base content
- Shipping and returns policies and processes
- Loyalty or rewards programs
- Review and rating scores across platforms
- Customer satisfaction or NPS ratings
- Awards, certifications, recognition
Evaluating this data reveals how you stack up to competitors and where the biggest gaps or opportunities may exist to differentiate and stand out.
Step 4: Identify Competitive Advantages to Leverage
With thorough insights gathered from researching competitors, you can determine areas where:
- You beat competitors, giving you a competitive edge
- Competitors excel, presenting opportunities for you to improve
- There are open gaps in competitor offerings you can fulfill
Revisit the detailed framework from your analysis to call out your key advantages. Some top examples include:
- Unique specialty products/services that fill an unmet consumer need
- Superior product quality, features, or customization capabilities
- Better value via lower pricing, bundles, or loyalty perks
- Stronger, more useful website content and tools
- Higher SEM and SEO visibility
- More engaging social media presence and follower base
- Faster shipping times or free returns
- Top-rated customer service and user experience
- Prestigious awards or certifications
Keep the list of competitive advantages handy for referral as you craft strategic plans to further strengthen your market positioning going forward.
Step 5: Create an Action Plan to Outperform Competitors
The insights uncovered from analyzing competitors should directly feed into your business planning. Develop concrete next steps across areas like:
- Enhance customization tools and options
- Expand specialty products to fill portfolio gaps
- Implement limited-time percentage-off sales
- Offer free shipping over a minimum order value
- Launch a customer loyalty program
Marketing and promotion
- Improve email capture pop-ups and newsletter content
- Run retargeting ads for recent site visitors
- Partner with influencers in your niche
- Add more in-depth category landing pages
- Improve site speed, navigation, and page templates
- Create and promote helpful gated tools or content
- Provide chat and phone support 24/7 vs competitors’ limited hours
- Develop online knowledge base articles around common questions
- Send “Happy Customer” follow-up survey to monitor satisfaction
Frequently review this plan against the latest competitor insights and refine over time. Conduct a full competitive analysis at least quarterly to spot where competitors may be evolving strategies you need to counter or learn from.
Make competitor analysis a habitual part of your business growth efforts for the strategic edge needed to continually adapt and stay ahead.
Competitor Analysis Tools: Unveiling the Power of Data
In the fast-paced world of business, staying ahead requires more than just intuition; it demands data-driven insights. Competitor analysis tools play a pivotal role in providing businesses with the necessary intelligence to make informed decisions and outshine the competition.
1. SEMrush: Uncover Digital Strategies
Overview: SEMrush is a versatile tool that offers a comprehensive view of your competitors’ digital footprint. It allows you to explore keywords, analyze ad strategies, and delve into organic search performance.
How to Use:
- Identify top-performing keywords in your industry.
- Analyze competitors’ paid advertising strategies.
- Understand the organic search landscape.
Benefit: SEMrush empowers businesses to fine-tune their digital marketing efforts, ensuring they are aligned with industry trends and outperforming competitors.
2. Ahrefs: Unearth Backlink Strategies
Overview: Ahrefs specializes in backlink analysis, providing crucial insights into the link-building strategies of your competitors. Backlinks are a key factor in search engine rankings.
How to Use:
- Examine your competitors’ backlink profiles.
- Identify high-quality backlinks in your industry.
- Understand link-building strategies that contribute to search engine visibility.
Benefit: Ahrefs aids businesses in refining their own link-building strategies, enhancing online visibility and authority.
3. BuzzSumo: Decode Content Strategies
Overview: BuzzSumo is a content-centric tool, allowing you to analyze the performance of content in your industry. It unveils the most shared content and identifies trending topics.
How to Use:
- Discover the most shared content in your niche.
- Identify trending topics and themes.
- Analyze the content strategies of top-performing competitors.
Benefit: BuzzSumo guides businesses in creating engaging and shareable content that resonates with their target audience.
4. SpyFu: Explore Competitors’ Ad Strategies
Overview: SpyFu focuses on pay-per-click (PPC) advertising, providing insights into your competitors’ ad strategies. It reveals ad spend, keywords, and ad variations.
How to Use:
- Uncover competitors’ PPC keywords and ad copies.
- Analyze ad spend trends over time.
- Understand the competitive landscape in paid advertising.
Benefit: SpyFu enables businesses to optimize their own PPC campaigns by learning from the successes and shortcomings of their competitors.
In conclusion, conducting a thorough competitor analysis is an essential step for any business striving to succeed in today’s competitive market. By employing these strategies and tools, you can gain valuable insights, refine your business approach, and ultimately achieve a competitive advantage. Stay proactive, adapt to changes, and continuously refine your strategies to stay ahead of the competition.
Remember, the key to success lies not just in understanding your business but also in comprehensively understanding your competitors.
Need help conducting a comprehensive competitor analysis? Contact 427 Digital today!