Competition can be good, and it can be bad. But regardless of how competition impacts your business and industry, you must understand where you stand in the broader context of the marketplace. And this requires you to conduct a meaningful competitive analysis.
What is Competitive Analysis?
A competitive analysis is the business strategy of identifying major competitors in your industry and researching their branding, product, sales, and marketing strategies in an effort to understand where you stand within the pecking order of your niche.
“A competitive analysis can help you learn the ins and outs of how your competition works, and identify potential opportunities where you can out-perform them,” HubSpot explains. “It also enables you to stay atop of industry trends and ensure your product is consistently meeting — and exceeding — industry standards.”
You can think of a competitive analysis like a scrawny ninth-grader walking into the high school cafeteria on the first day of school. He looks around to see who he “fits in” with, who he needs to avoid, where the cute girls are, and how he can increase his positioning in the school’s social order. It’s an analysis of where you stand – so that you can increase your chances of getting to where you want to be.
Why Conduct a Competitive Analysis?
If you’re conducting an in-depth, high-level competitive analysis, it can take a lot of time to gather the necessary information and develop concrete takeaways. So before you invest hours of your time into this exercise, you should make sure you know why you’re doing it. Here are a few specific benefits:
- Unique value proposition. When you understand what everyone else is doing and contrast it against what you’re doing, it makes it easy to focus on your unique value proposition (which is a paramount pillar of your branding).
- Opportunities. In addition to understanding differences, you’ll also run across things that your competition is doing really well – elements you want to replicate in your own business.
- Gaps in the marketplace. By exploring public feedback that other businesses are getting, as well as the products they don’t offer, you can identify gaps in the market. Then, if you’re tactful, you can swoop in and fill these gaps with your own products and services.
- Benchmark. A competitive analysis is like a scorecard. It shows you the score of the game and helps you measure how you’re doing at any given point in time. Think of it as an evolving benchmark.
- Partnerships. In your research, you might run across a business that isn’t actually a competitor. Instead, they operate in a parallel industry or space. After getting to know them, you might discover opportunities for partnerships or assistance.
Again, a competitive analysis takes a lot of time (when done right). But when you consider the benefits mentioned above, it’s really a no-brainer. Give it a try, and you’ll like the results.
6 Tips for a High-ROI Competitive Analysis
There are many ways to conduct a competitive analysis. But if you want to extract as much juice from it as possible, the following tips will prove useful and rewarding.
1. Make a List of Your Competitors
The first step is to make a master list of all of your competitors. You can divide this list into segments if needed. For example, you might have two clear competitors that you duke it out with on a daily basis, then a dozen secondary competitors who are in your industry but not exactly in your niche or geographic market. A tiered list will serve you well.
2. Research These Key Elements
When analyzing the competition, there are certain key elements that you’ll want to pay attention to get a feel for where you stand in the greater marketplace. This includes:
- Products and services
- Branding and marketing
- Social media presence
- Pricing and price structure
- Customer engagement and feedback
- Content marketing
Some of these elements are objective, while others have a much more subjective feel to them. Do the best with what you’ve got and try to paint a complete picture.
3. Get Technical With Your Analysis…
Technical analysis is at the heart of any good competitive analysis. You can do this in numerous ways, including:
- Stock traders and investors often use things like Fibonacci retracement to analyze support and resistance levels for a particular investment. You can leverage different (but similar) formulas to analyze other companies on a technical level. The more data you have on the competition, the more practical technical analysis becomes.
- In today’s marketplace,
SEOis a great technical measuring stick. Study the competition’s page titles, tags, content, internal links, meta descriptions, domain authority, root linking domains, page templates, backlinks, blog topics, etc.
4. …But Analyze Soft Factors, Too
It’s also helpful to analyze softer factors like customer sentiment, creative branding, and other emotional elements that impact how people feel about your competitors. When layered on top of technical factors, this helps you add color to the picture and establish a better overall view of where you stand in the industry.
5. Set Up Alerts
To truly understand what’s happening with your competitors, you need to put yourself in a position to be one of the first to hear about new developments and trends. You can do this in a variety of ways, including:
- Subscribe to their newsletters and email lists to see what’s happening.
- Subscribe to their brand name and product names using a tool like Google Alerts
- Keep tabs on their
SEOby using a backlink tracker and SEOtool like Ahrefs.
6. Stick With It
A competitive analysis isn’t a one-time investment that you make and then forget about. If you want to be successful in understanding the marketplace and identifying opportunities as they emerge, you have to stick with it.
Regularly revisiting and updating your competitive analysis quarterly will empower you to keep a firm pulse on the industry. And the more you keep up with it, the less time it takes to uncover the insights you need. Your research and findings will build over time.
Putting It All Together
A competitive analysis provides no guarantee that your business will be successful. However, it does equip you with information to implement the right strategies and frameworks to be more successful over the coming months and years.
competitor analysis – DepositPhotos