From personnel reviews to internal improvement campaigns, there are a lot of ways to boost your company’s performance by looking inward. But those efforts can only go so far when not paired with an external outlook.
The strength of your business is built on the individual value propositions that make your brand unique, but examining your competitors and adapting your strategy around what they’re doing can help you to outpace and outperform them every step of the way.
Enter the competitive market analysis.
What is a Competitive Analysis?
Simply put, a competitive analysis is an in-depth examination of your direct competitors and the things they do.
By breaking down the product offerings, marketing strategies and sales numbers of your key competitors, you’re able to build a complete picture of your industry. This allows you to see where your company stands out, as well as the areas of opportunity where you can step in and distinguish yourself from the crowd.
Where Do I Begin?
The first step to conducting a competitive market analysis is to identify your competitors. For some industries, putting together a complete list of competitors is relatively easy. But for others, it can be unrealistic to examine every single potential competitor.
So, focus on your biggest competition by identifying those brands that:
- Target the same or similar market(s) as you do
- Offer a product or service that could be used as a substitute for the product or service your company offers
- Operate in your same geographic area
- Hold at least some influence over the market(s) your company targets
Breaking It Down
Once you’ve got a list of your immediate competitors, it’s time to break down what they do right, what they could improve on and how you can step in to fill those roles.
Start by determining what products/services they offer and how they sell them. It might sound simple, but identifying the products and services offered by your competitors can give you powerful insights into how you can outpace them. For example, if a competitor focuses primarily on low-cost offerings, there might be a void for high-end products that you can fill.
The same is true for brands that focus on volume sales versus one-off purchases, local markets versus national ones, and more.
After you have a clear picture of the products offered by your competitors, examine their sales tactics by looking at questions like:
- What does the sales process look like?
- Are sales efforts growing or scaling down?
- What channels are used for sales?
- What perks/programs do they offer to keep customers loyal?
- What are the reasons for customers ending their relationship with the company?
Look to advertising material, websites, reference books/databases, and even direct conversations with your competitors to uncover this information. The results of this breakdown will give your sales team the tools it needs to distinguish itself from each competitor during the final buy stage.
Next, look at how your competition markets their content. A strong marketing presence is vital to maintaining relevance in any market. Do your competitors produce consistent marketing content like blogs, FAQs, podcasts, press releases, white papers and more?
Take note of how often content is being posted as well as the quality of the information being produced. If one of your competitors posts infrequently or offers content that holds little value for their target audience, you have the chance to fill that void with quality content of your own.
Next, be sure to look at what social media platforms your competitors make the most use of. Do they prefer Facebook over Twitter? Are they most active on LinkedIn? Do they frequently promote their social pages? Do they lack a substantial social presence altogether?
If one of your key competitors is knocking it out of the park on a specific social platform, check to see what they’re doing that makes them so successful. If they’re lacking in quality social content, that’s an area you can step up into.
Engagement is an excellent way to gauge how well your competitors are doing on social media. If they have lots of posts but little to no engagement, odds are they’re doing something wrong.
Next Steps
Once you’ve conducted your analysis, compare how each of your competitors stack up against your company. Examine your own strategies in the same ways that you have for your competitors.
Are there areas where you excel? What opportunities do you see to improve? Take what you’ve learned and integrate it into your sales and marketing efforts wherever possible. Even if you don’t use every single piece of information you’ve collected, you’re now more equipped to understand and anticipate the strategies of your competitors going forward.
However, even by following the tips provided above, conducting an in-depth competitive analysis can be a daunting task. Accessing your competitors’ sales and marketing information and taking the time to break down their strengths and weaknesses can be costly and time-consuming.
That’s where marketing firms can be of assistance. Trusted firms are able to make use of tried and true data collection techniques and dedicate themselves to understanding your business and the strategies of your competitors. If you find yourself wanting to perform a competitive analysis but lack the time or resources to do so, reaching out to an experienced marketing team might just be something to look into.