One of the many keys to success for businesses relates to how you differentiate yourself from your competition. No matter what industry you’re in, every industry has competition, and finding ways to set your business apart from your competition can sometimes be difficult. This is why it is important to conduct a competitor analysis. An in-depth competitor analysis will help you accomplish three things: understand how your customers and potential customers use and rate the competition, identify your competitor’s strengths and weaknesses, and provide a starting point for developing effective competitive marketing strategies in your target market.
Identify Competitors
So, where do you begin? First, start by compiling a list of companies who you believe are your closest competition, or who could potentially move into your market. You may wonder, who should I consider as a competitor? Any business marketing a product or service similar to yours in the same geographic area is a direct competitor. You can find this information by simply Googling the products and services you offer and see what other business show up. If you’re still not sure if they’re a direct competitor or not, ask yourself, what is the range of products and services they offer? Are their products or services aimed at satisfying similar target markets? Do they operate in the same geographic area? If you answer yes to all of those questions, then they are definitely a direct competitor.
Gather Information
Once you’ve identified and compiled a list of your competitors, it’s time to start gathering information. With the wonderful magic of Google, it should be fairly simple to dig up useful information on your competition. You can start by finding out how customers in your target market review and rate your competition. When looking at reviews, take into consideration that the majority of customers who write reviews are either extremely satisfied with the product or service, or are extremely unhappy. In order to come up with an overall consensus of your competitor’s reputations, you should look at multiple rating and review platforms, such as Google reviews, Yelp, BBB, Houzz, Facebook reviews, etc. After finding out this information, you should have a better understanding of what your target audience either likes, or dislikes about your competitors.
Once you’ve gathered all the customer data of your competition, it’s time to analyze their actual business. You should analyze to determine their product information, advertising and marketing strategies, and their branding. Start by analyzing their products or services. Some questions to ask yourself:
- How does their product or service compare to yours?
- What features or benefits are unique to their product? To yours?
- How do their prices compare to yours, (if applicable)?
After gathering their products and services information, you should then try to identify what their advertising and marketing strategies are, and what they are doing to try to achieve them. Some questions to ask when looking at their advertising and marketing:
- Are they running online ads? (i.e. Google Ads, Yelp Ads, LinkedIn, Facebook, Instagram Ads, Display Ads, etc.)
- Are they advertising on publications?
- Are they blogging to attract users to their site?
Once you’ve determine your competitor’s advertising and marketing strategies, you should then analyze their branding. Some questions to ask when looking at their branding:
- Do they have a consistent brand across all platforms? (i.e. website, advertisements, social media profiles, etc.)
- Does their brand differentiate them from the rest of your industry?
- What are they trying to accomplish?
- Is there any amount of that, that you can leverage?
Strengths and Weaknesses
Alright, so now that you’ve gathered all of the customer and business information of your competitors, the fun part begins! Now it’s time to take all of that information and identify your competitors strengths and weaknesses so you can determine what opportunities you have for your business. You need to ask yourself, what do each of your competitors do very well, better than your own company? Then ask yourself, what does your company do better than your competitors? Look at your company not just from your own viewpoint, but also from your customers. What makes your customers come back to you? What kind of advertising and marketing do you use? Is there anything you currently offer that your competitors don’t? Then, ask yourself what areas are each of your competitors weak? What details are they neglecting? Again, you will need to do this on your own company as well. What does your company do that can be improved upon? By identifying both you and your competitor’s strengths and weaknesses, you can get creative for finding opportunities to to differentiate your business from the rest of your market.
Although a competitor analysis can sometimes be time consuming, it can be extremely beneficial for your business. As I previously mentioned, an in-depth competitor analysis will help you understand how your target audience use and rate the competition, identify your competitor’s strengths and weaknesses, and provide a starting point for developing effective competitive marketing strategies in your target market. A competitor analysis is just one of the many keys of success for businesses, and can be used as a key component for developing an effective marketing plan. The information you find can allow you to make strategic business decisions to stay ahead of your competition.
Where do you rank compared to your competition?
