Believe it or not, your competitor shouldn’t be your first topic of investigation when conducting a competitive analysis, which is simply an assessment of the strengths and weaknesses of potential and existing competitors.
This isn’t to say that your top competitors won’t be part of the focus during the competitive analysis itself. They, of course, are the focus.
However, if you keep your eye on the behavior and expectations of your target market, then you’ll know the key areas in which to evaluate the competition.
You can’t investigate everything at once, so it makes sense to ground your study of the competition in a strong understanding of your audience.
Get to Know Your Market
Until you understand what your customers value, you won’t know where to start when you begin to analyze the competition.
Online surveys are a quick and cost-effective way to reach your audience and get their opinions.
You can serve up a survey to your existing customers via email or social media, find a study online that has already been completed, or purchase online panelists to take your survey.
Relative to your market, you’ll be able to use the results of your survey to detect trends in the following key areas of marketing strategy:
How do buyers in your market research their purchase?
General web search is sure to be common, but perhaps more than ever customers in your market are finding particular social media outlets to be fertile ground for their research.
They may also place a high value on physical ads, like billboards, or ads that they see in print, on TV, or online. Asking directly is the only surefire way to find out.
What online formats do buyers in your market use to research a purchase?
B2B buyers interact with an average of eight pieces of content before making a purchase decision, and B2C customers are likely to encounter marketing materials dozens of times before they are prepared to buy.
Understanding your audience’s preferred (and most common) path to purchase is vital.
Perhaps your findings show that infographics are gaining surprising momentum against webinars, podcasts and whitepapers. This kind of information will let you evaluate your competition (and yourself) more efficiently because you’ll know what types of marketing reaches your market and what can be left aside.
How do buyers in your market prefer to complete their purchase?
For B2B customers, are interactive webinars quick enough for them to gather the information that they need? Or will customers lose patience if you do not have a chat service on your website, or an easy to locate phone number?
For B2C buyers, do they want to know the location of brick and mortar stores, make a purchase on a website, or browse your merchandise on an app?
Once you know what your customer’s demand and expect, you can then analyze your competition’s practices in these areas only.
Be Your Competitors’ Customer
Now that you’ve identified what your market values, the single most effective exercise in your analysis is to view your competitors one-by-one from the perspective of your customers.
Start by visiting your competitors’ website. How easy is it to find them when web searching? Where do they rank for the keywords that are valuable for your market?
If your competitor offers a trial of their services go undercover and sign-up, observing their email content and how accessible they are. If they make their phone number readily available, give them a call and see how helpful their customer service team is.
Perhaps most importantly, a full usability study on the firsthand experience as your competitor’s customer is invaluable. From your first interaction on their website, and to their credit card entry form when you convert to a paid customer — what strengths and weaknesses do you find? Are they providing a better experience in certain areas where you need to improve?
You’ll quickly begin to understand how your competitors stack up in the areas that you’ve determined are valuable to your target markets.
Marketing Tactics for Competitive Analysis
Here are some other areas to consider once you’ve begun your competitive analysis:
- Social Media: Do your main competitors have a presence on Twitter, Facebook, and other social media platforms? Do they seem to focus on one more than another? How do you (or could you) stand out in comparison?
- Website: How do they present the price of their services? Do they provide a phone number and an easy way to contact them, such as a chat service? Have they created landing pages for specific use-cases of their product?
- Product Review Sites: Many studies show that word of mouth and peer-made recommendations are still the most trusted sources of product information. Research the most visited review sites in your industry. Do your competitors have a stronger presence in these areas than you?
- Content Marketing: Does your competition develop their own original content through blogs and articles? Do they seem to be targeting a segment that you value as well? Are they providing real value in their content, or is it just a thinly veiled sales tactic?
Incorporate Competitive Analysis Systematically
Your reconnaissance of the competition should be performed multiple times throughout the year, and especially when you detect shifts in the market.
This keeps your information accurate, but the ultimate goal of a competitive analysis is to know when to play offense when to go on the defensive with your marketing strategies.
A systematic incorporation of your analysis will guide your decision making as you work to improve your positioning in the market.
Areas where you need to catch up with the competition, or perhaps exploit the shortage of something that customers in your market desire, will be made clearer by referring to your findings and their changes over time.
Now, you just need something easy to digest that reflects the multidimensional approach that your analysis took.
SWOT (Strengths, Weaknesses, Opportunities, Threats)
A SWOT Analysis is a planning tool in the form of a four-quadrant matrix designed to help strategic planning and decision-making. It’s widely used for assessments of business ventures, so it lends itself perfectly to a competitive analysis.
The data that is inputted into the four quadrants of the matrix (strengths, weaknesses, opportunities, and threats) should highlight the crucial areas where momentum is gained and lost in your market.
Keep your SWOT analyses up-to-date for all of your main competitors and you’ll have a powerful dashboard to reference when making important decisions.
Using Competitive Analysis to Your Competitive Advantage
It can be time-consuming to assess your competition on a regular basis, but if you’re in the know about what they’re up to, you can adjust your own tactics so you can differentiate your message.
Keep the focus of your analysis on what’s really important to your customers, and you’ll be able to hit the sweet spot of marketing where you’re connecting with your customers as a different voice from your competition’s.