Regardless of what industry you operate in, there are companies pining after the same audience as you. With so many competitors in your market, you must make your company stand out from the others. By conducting a competitor analysis, you can help your business discover what you can do to outperform your competition.
On this page, we’ll provide you with four competitive analysis steps to help you beat out your competitors and earn more leads to grow your business. P.S. Want to get helpful hints for marketing your business online? Subscribe to our email list to get valuable marketing insight that can help you get a leg up on your competition!
Pre-competitor analysis: Establish your basic business information
Before we dive into the heart of how to do a competitor analysis, you need to establish some vital information about your business. Identifying this information will make it easier for you to compare your company to your competition.
Step 1: Identify your business’s goals
The first step you’ll want to take to perform a competitive analysis is to establish your business’s goals. You must know what you want to achieve so you can accurately compare yourself to your competition. You can set numerous goals for your business, including:
- Increasing sales
- Increasing leads
- Increasing brand awareness
- Increasing form submissions
- Increasing sign-ups
When you set your goals, make sure they’re SMART goals:
- Specific: Identify precisely what you want to achieve — don’t just sum it up to “increase sales.” A goal like “increase sales by 30% by the end of Q4” is specific.
- Measurable: Make sure your goals can be measured. For example, you can’t measure someone’s thought process before visiting your page, but you can see how they got to your page.
- Achievable: To keep your team from becoming discouraged with missed goals, set goals that are challenging but realistically attainable for your team. If achieving a 50% conversion rate isn’t realistic in relation to your current conversion rate, choose a number that’s attainable, but difficult to reach.
- Relevant: Make sure your goals are relevant to your business and emulate what you’re trying to achieve, whether it’s increasing sales, brand exposure, or leads.
- Timely: Set a deadline to achieve your goals so your team can keep pace. It will give your team a time frame for when they need to complete tasks, which will help them complete them promptly.
Step 2: Identify your target audience
Once you know your business’s goals, the next step is to establish your target audience. Your target audience is the group that is most likely to need the products or services you offer. You need to know who you’re targeting, so you can identify competitors that target a similar audience.
So, how do you identify your target audience? Look at your current customer base. Identify common characteristics amongst these customers, including:
When you know this core information about your audience, you can create buyer personas. Buyer personas are fictional representations of your real customers. These personas help you identify who to target with your future marketing campaigns.
Step 3: Identify your position in your market
Identifying your position in your market is one of the essential competitive analysis steps. You need to know what your company offers and how that differs from your competition before you start comparing yourself to your competitors more in-depth. You need to know your unique positioning in your market so you can evaluate your competition appropriately.
For example, let’s say your company offers compostable food containers. You’re comparing yourself to other companies that sell plastic food containers. Your position in the market is that you focus on offering an eco-friendly solution to food storage.
You share how you create products that help reduce plastic waste and are compostable. This positioning is unique in your market because no one else offers eco-friendly food storage. By identifying this branding messaging, you have a clearer picture of who your company is and what you offer.
When you know this information, you can determine what makes you stand out much easier, so you can leverage those unique aspects of your business.
Step 4: Document the marketing strategies you currently use
When you perform a competitive analysis, you’ll look at the strategies your competition uses. To make for a quick comparison, you’ll want to document all strategies you use to promote your business online. Some common marketing tactics include:
- Search engine optimization (SEO)
- Pay-per-click (PPC) advertising
- Social media advertising
- Social media marketing
- Email marketing
- Video marketing
- Content marketing
- Influencer marketing
Document your selected strategies and make yourself aware of other strategies your business may not use. You can compare your current tactics to your competition to see if they use the same strategies to reach their audience, or new strategies you might not utilize.
Competitor Analysis: Analyze your competition
Now that you’ve taken the pre-analysis steps for your competitor analysis, let’s start analyzing the competition! Follow these steps to perform a competitive analysis for your business:
Step 1: Choose your top competitors
To start your competitive analysis, you need to select your top competitors. You’ll want to focus on a list of four to six of your closest rivals. So, how do you find your top competition?
Start by conducting searches for terms related to your business. For example, let’s say you’re a pet supply company in Philadelphia. You could start by searching the term “pet supply company in Philadelphia.” When you look at the search results, you can see what companies appear.
In this case, some of the companies include:
- Rittenhouse Square Pet Supplies
- Mercado Pet Supplies
- Monster Pets
Now let’s try looking for another term related to your company. Let’s search for “dog food supplier in Philadelphia.” After conducting this search, you can see that Rittenhouse Square Pet Supplies and Mercado Pet Supplies both come up in the search results. If you were a pet supplier in this area, you would consider these two companies as potential competitors for your business.
You’ll want to search a few relevant terms to your business to see who comes up in search results. Keep track of how often that company appears for related search terms. Based on your research, you can focus on the four to six businesses that appear to rank against you most often.
You can also use a competitor analysis tool like Ahref’s Rank Tracker to see who’s ranking for specific search terms that you also target. This strategy will help you identify who you rank against most often, so you can include them as a competitor.
Step 2: Create competitor profiles
Once you identify your competition, next on your list of competitive analysis steps is to create competitor profiles. If you’re going to analyze your competition, you need to know everything about them. Part of that is documenting important information.
You’ll want to document information like:
- Their location
- What they do
- What they offer
- Company values and beliefs
- General price range
Creating a full profile of your competition will help you analyze them better.
Step 3: Analyze their online presence
Once you have background information on your competition, the next step is to analyze their online presence. Search around the web to find the strategies and platforms your competition uses for their marketing efforts. Make sure you look at a few samples of their content on those platforms, whether it’s a piece of content that ranks in search results or posts on social media.
You can use a tool like CompetitorSpyFX to help you analyze certain aspects of your competition’s performance and see how you stack up against them.
Step 4: Conduct a SWOT analysis
Once you’ve gathered all the critical information about your competition, you’ll start analyzing the information. When you perform a competitive analysis, you want to look at the strengths, weaknesses, opportunities, and threats, also known as SWOT analysis, with each company.
- Strengths: In the strengths section, you’ll want to document what your competition does well. Do they have engaging social media posts? Is their ad copy extremely relevant to their audience?
Focus on parts of their campaigns where they excel at marketing their company.
- Weaknesses: What are the areas where your competition lacks? Note areas where they’re missing the mark with your audience.
- Opportunities: Opportunities are areas where your competition can potentially grow. These opportunities are typically trends, or changes that benefit your competition, or your business, in the long run.
- Threats: Threats are activities that can disrupt your business’s online growth efforts or cause a disruption where you need to reevaluate and overcome.
Conducting a SWOT analysis for each of your competitors will help you see where you stand above your competition and where they stand above you. It enables you to gain a well-rounded perspective of your competitors, so you can create a plan to outperform them.
Step 5: Come up with new strategies to outdo your competition
The last step when you conduct a competitive analysis is to brainstorm new strategies to outdo your competition. When you analyze your competitors, you may find that you were missing out on marketing channels that can exponentially help your business grow. Since you followed these competitive analysis steps, you could see how that channel works for the competitor and inspire your strategy.
Once you analyze your competitors, see if there are any commonalities amongst them. If they’re all investing in a channel you’re not using, you may want to consider checking out that strategy to see if it would work for your business. Likewise, if you see your competition isn’t using a particular channel and you are, you can leverage that channel to help you outperform your competition.
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Let WebFX conduct the competitive analysis steps for you
Now that you’ve looked at all the competitive analysis steps, you may feel overwhelmed. There’s a great deal that goes into analyzing your competition, and if you don’t have the time to do it, you may feel like you’re missing a prime opportunity to help you outperform your competition. Instead of skipping the competitive analysis, consider letting WebFX help you analyze your competition.
We have a team of over 450 experts that can help you conduct a competitor analysis and get valuable insight into your competition. Give us a call at 888-601-5359 or contact us online to learn more about our digital marketing competitor analysis services!