Every business niche has competitors. You likely won’t be the sole provider of a service or product in any industry, even if your product or service is the best option. Competitor analysis and competitive research are an integral part of not only sustaining your small business, but ultimately growing your business. Learning where other brands are succeeding and what strategies they’re using helps you plan and strategize more tactically. It also gives you a good idea of what works and what doesn’t for your own customers.
The advent of the internet and social media has made competitor analysis more straightforward and comprehensive. Business owners can now conveniently identify their competitors and learn more about their engagement, strategies, and tactics. With all of this information, you might be wondering how to conduct a competitive analysis for your own business.
Keep reading for an in-depth look at the steps you need to take as a small business owner.
What is a competitive analysis?
Competitive analysis is defined as the process of identifying your major business competitors and conducting research to evaluate their strengths and weaknesses.
This analysis usually involves researching competitor products, services, sales, and marketing strategies. You can then use this information to build better business strategies for your own business and outperform your competitors.
Why is a competitive analysis beneficial?
Conducting a competitive analysis will give you a better understanding of how your competitors are strategizing and operating. When you understand how their businesses work, you can identify opportunities to outperform them. A competitive analysis also helps you gather valuable insights about your industry as a whole, so you can ensure your business is meeting industry standards.
Below are some of the benefits and outcomes of conducting a competitive analysis:
Find weaknesses in your products or services
By analyzing competitor strategies and engagement tactics, you can identify areas where your own business might need some improvement. You might come across new strategies you haven’t tried yet, and you can learn how to pull them off effectively through your competitors.
The competitive analysis provides you with accurate benchmarks to measure your brand’s success and determine where improvements are needed.
Learn new technologies
By exploring the technologies your competitors are using and how they help them engage their audience, you can determine whether you’re at a competitive disadvantage. Incorporate technology into your own business that has already proved successful for your competitors to increase your engagement and revenue.
Improve your marketing content, ads, and campaigns
Gaining insight into your competition’s marketing strategy can help you pinpoint the tactics and practices that are most effective with your target audience. A competitive analysis will help you uncover these tactics and identify the best channels for employing those marketing strategies. With competitive data under your belt, you can improve your ads and help your content rank higher by using proper keywords and focusing your campaigns.
Convert more customers
Competitive analysis can help you identify new customers you can attract by providing better services or incentives. You can learn what the audience in your niche expects from businesses like yours and look for opportunities to convert them to your brand. Using a competitor analysis, you can find out where your competitor’s products haven’t performed well and avoid making the same mistakes yourself.
With this information in mind, you can work on developing improved products and services that will attract and convert customers. Knowing your competitor’s weaknesses will give you a competitive advantage that you can use to expand your customer base.
Increase market share
Market competition analysis helps you keep up with industry trends, which is vital for staying ahead of the curve. It also gives insight into the saturation of competitors in different segments of your target market.
This analysis can help you uncover market segments where your competitors are falling short and where you can step in to serve the target audience better. You can also use this analysis to identify the target audience’s pain points, so you can plan and improve your products accordingly.
Ultimately, a competitive analysis allows you to identify opportunities to increase your market share.
How to conduct your competitive analysis
While a competitive analysis can seem overwhelming or complicated at first, here’s how you can go about it in 10 simple steps:
1. Identify your competitors
Start by building a rough list of competitors. You are most likely aware of your major local competitors, but it’s always a good idea to dig a little deeper, like searching on Google and LinkedIn. Look for competitors by using keywords related to your business niche.
You can categorize your competitors as primary, secondary, or tertiary competitors:
- Primary competitors: your business’s direct competitors. They have similar products or services and share the same target market.
- Secondary competitors: your indirect competitors. These are the companies that sell similar products and services but to a different target audience.
- Tertiary competitors: share the same target audience as your business, but they don’t offer the same products or services. These businesses don’t directly compete with your brand, but they may become future competitors if they decide to expand or change their business.
2. Review product and service offerings
After you’ve identified your competitors, the next step is to review their products and services, both apparent and obscure. Your competitors likely offer similar products as your own small business (after all, that’s why they are your competition), but this is the time to review the nuances. Some considerations to review include:
- Pricing of the products or services: Are they priced higher or lower than your offerings?
- Ease of access: Are there faster delivery options or low-hassle return options?
- Features: Are there additional features that your competitors offer?
- Rewards: Do your competitors offer some sort of incentive or rewards program?
Even if your offerings are identical to your competitor’s, there are ways to edge out the competition without completely overhauling your product or service.
3. Examine site traffic and user experience
Website traffic is an especially important piece of the competitive analysis puzzle. This will help shed light on how much customers engage with your competition, which brands are top of mind for your target audience, and what you need to do to keep up with your competitors. Some points to consider include:
- Bounce rates
- Pageviews per user
- Time on site
- Traffic sources
- Monthly unique visitors
In addition to overall website traffic, something to be mindful of is the user experience when you analyze competitors’ sites. When navigating through your competitors’ websites and comparing them to your own, consider things like:
- Are there technical errors, like 404 pages or broken backlinks?
- Are there unresponsive pages that don’t fully load?
- Are there pages that load on the desktop version, but not on mobile? Or vice versa?
- Is the checkout process easy?
If their site is easier to navigate, contains more relevant content, or experiences higher customer engagement, you might consider making similar updates to your own website.
4. Compare marketing positioning
To determine whether your competitor’s policies are worth taking inspiration from, first look at their position in the marketplace. This can be done by looking at your competitor’s strengths and weaknesses and how the target audience is engaging with them. Once you’re done with your research, you can build a comparison matrix to see how you compare against your competitors.
5. Differentiate content strategies
It’s important to review your competitors’ blog content and see how yours stacks up. By being able to effectively discuss the industry you’re in, you’re showing your target audience that you are an active participant within your industry and a good source of truth. Furthermore, this allows brands to discuss product and service offerings, which can answer potential customer questions and position you as an authority in the space.
Some things to review when comparing competitor content strategies:
- What is the quantity of blog posts? Do they have only a few posts, or do they have a more robust collection?
- Do they post frequently, or is it once in a while?
- What type of content do they post?
- Is their content accurate?
- Who writes their content?
- Does the content have spelling or grammatical errors?
- Does the content discuss topics in depth? Or is it more high-level?
Implementing a strong content strategy now is a great way to interact with your customers, both existing and potential, in a new way.
6. Review pricing
An excellent way to determine whether your pricing strategy is appropriate for your target audience is to check out the pricing policies of your competition. Find out how much they charge for products or services similar to yours. You can do this manually or by using tools like Price2Spy and Prisync.
Once you have the pricing info, you can review your pricing to determine how they compare. If you find your prices are much higher than your competitors, you can lower your pricing or update your messaging to show why your products are worth the premium rates.
7. Read reviews
Customer reviews are the window into how your target audience feels about your competitors. After all, word-of-mouth referrals can be the most impactful, so it’s important to have potential customers keeping you top-of-mind. Keeping an eye on competitor customer reviews can help you determine how well your competitors are doing business and can lead you to find an opening to outperform them.
By looking at the reviews, you can learn more about what customers expect from businesses in your niche. Reviews will also help identify strategies that sit well with the customers, so you can adopt them in your own business policy. For example, if a competitor’s reviews mention they lack a certain feature, you can promote that feature in your campaigns and messaging to convince customers to switch.
8. Inspect social media
As a small business owner, you’re always on the lookout for ways to increase your audience and audience engagement. Social media provides small businesses with a strong platform from which to expand their reach and engagement beyond their local sector. Even better, it allows business owners to connect with their audience in deeper ways, and even have conversations with them, even if they aren’t local.
While conducting your competitive analysis, be sure to check out your competitors’ social networks. Identify the posts and content their audience most often engages with and look for ways to replicate that content using your own social media presence.
Determine how frequently they post and which posts earn the most likes or comments, and identify the influencers they most often work with. On the flip side, identify the messaging that isn’t playing well with their audience so you can avoid making the same mistakes on your platform. Are your competitors not on social media, or do they only have a small presence? Use this to your advantage and show potential customers why you deserve their business over others.
9. Explore technology
Learn about the marketing technology and tools your competition is using and think about how you can integrate those tools into your business approach. For example, if your competition focuses on search engine optimization (SEO) and keywords for their blog and is getting good engagement, such a strategy might be suitable for you too. Using tech stack tools like BuiltWith, you can find out what tools your competition uses to build their websites and content.
10. Perform a SWOT Analysis
As part of a competitive analysis, performing a SWOT analysis can fine-tune where your competitors are potentially doing better, among other things. A SWOT analysis lists the different strengths, weaknesses, opportunities, and threats of a company. While strengths and weaknesses are looked at as internal factors (or inside the company), opportunities and threats are considered to be external factors (or factors you cannot control).
By using conducting a SWOT analysis, you can identify:
- What are your competitor’s strengths? What are they doing well in terms of products or social media?
- What are your competitor’s weaknesses? Where do they seem to be lacking?
- What are your competitor’s external opportunities to leverage?
- In what areas would you consider this competitor a threat to your brand?
By using a SWOT analysis, you can easily view different aspects of your competitors, both positive and negative. This information can help you better understand where you can potentially make improvements to outperform them.
What to do after a competitive analysis
Now that you’ve gained competitive intelligence, what do you do with all that information? Use that data to identify new, effective marketing strategies for your brand. Here’s how:
Update your offerings
When you’ve finished analyzing the competition, it’s time to get out there and apply what you’ve learned. Design a strategic plan for optimizing your products and services and get started on new advertising strategies.
If you’ve identified your competitor’s weak areas, work toward filling that space in the market by introducing new products and services for your target audience. Employ your competitor’s strategies that are proving successful with your target customers, and make any necessary changes or updates to your products and services.
Once you’ve analyzed your competition’s pricing model and know how well their customers receive it, it’s time to review your pricing policy.
Look at where you stand on the quality vs. quantity spectrum and determine whether you need to change your prices to be more attractive to customers. If your customers are getting better quality and lower prices from your competition, they most likely will choose them over you. Make sure your value proposition is clear, and adjust your pricing accordingly; just make sure any changes are thoroughly communicated to your target audience.
Adjust content strategy
Once you’ve looked at your competition’s marketing strategies and know which methods are well received by the audience, review your own content marketing strategy for gaps.
Start by analyzing your social media channels. Consider investing in paid marketing channels like Facebook ads. If you’ve discovered that your target audience lives on Instagram, focus your efforts on uploading high-quality, engaging content on that platform to increase your engagement with potential customers.
Beyond social media, review your blog content strategy. If you do not have existing blog content, now is a good time to strategize a plan to implement. If you do have existing content, weigh it against your competitors and adjust your plan as needed by either adding more content more frequently or changing the overall content structure of your posts.
Useful tools for completing a competitive analysis
There are countless advanced tools for performing a competitive analysis in your business niche. These tools will help you design the ultimate winning strategies for your business. We’ve compiled some of the most popular, choose the tools that work best for your business.
- BuiltWith: BuiltWith is a tool that lets you look at what your competition’s website is built with through a simple click.
- Wappalyzer: Wappalyzer is a technology profiler that lets its users know what tools a certain website is built with.
Marketing content and keyword data
- SEMrush: SEMrush is an SEO and search analytics tool that’s used all over the world. It lets you look at your competition’s most valuable keywords.
- Ahrefs: Ahrefs is a competitor analysis tool specializing in data about SEO. It lets you check the organic words used by your competitors.
- Topic: Topic is a content optimization tool that lets businesses write SEO-optimized content. With Topic, companies can create automated content briefs to improve SEO and search rankings.
- Prisync: Prisync is a competitor pricing tool that allows you to track and monitor your competition’s pricing.
- Price2Spy: Price2Spy is a tool that lets you monitor and compare the prices of your competition and allows you to reprice your products accordingly.
- Facebook: Facebook Audience Insights gives you data and information about the audiences related to your niche. You can also get information about your competitors’ strategies and audiences.
- Instagram: Instagram is one of the largest social networks with a heavily engaged audience. You can view your competitors’ profiles to see what kind of content they post and the influencers they work with.
- Twitter: Because Twitter is so popular, you can determine the popularity of your competition by looking at their followers and engagement metrics on Twitter.
- TikTok: TikTok is becoming increasingly popular, especially among young audiences. You can determine your competition’s outreach by looking at their followers and content engagement on TikTok.
Tie it all together
Competitor analysis helps you highlight your competitors’ strengths and weaknesses, providing you with useful insights for devising your own marketing strategy. Competitor analysis helps you keep up with the latest trends and tactics, identify new opportunities, and prepare for potential curveballs.
The idea behind competitive analysis isn’t to steal your competitor’s identity, but to learn from them and devise more strategic business plans for your brand. The ultimate winning strategy for any business is to focus on customers, both existing and potential. A competitive analysis gives you insight into better ways to do this. By learning how to conduct a competitive analysis, you’ll be sure to keep a leg up on the competition.
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