Competitive analysis is one of the most effective methods for mapping out your position in the marketplace. Once you understand this position, you can create a marketing strategy that will help you make the most of it and reach new customers and audiences.
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If you're not doing competitor analysis, here's the good news - it's easy to get started. Thanks to the Internet and social media, you can find out pretty much anything about a company and their marketing strategies. You can use this information to see what they're doing right that you may be doing wrong - and vice versa.
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What steps should I follow?
There are a few steps that you should follow in order to get all the information necessary about your competitors.
You'll be able to put an online competitive analysis strategy in place with these five steps (also outlined in the video below).
1. Identify your competitors
Who are your competitors? You may be able to name one or even two of them off the top of your head. However, there are likely other companies that don’t look like threats now, but with a few adjustments could chip away at your customer base.
Make a list of all of the companies offering similar products and services, competing in your location or targeting similar markets. If this is your first time doing competitor analysis, narrow the list to the 4-5 companies that present the biggest threats to your business.
As you go on, you may also choose to dig into the marketing strategies of companies that aren’t your direct competitors, like similar businesses across the country. Although your customer base may not overlap, their strategies could provide some great ideas.
2. Use online tools to analyze their strategies
Before the Internet, you had to go to great lengths to learn more about a business. Details weren’t necessarily more guarded, but you’d have to call to get annual reports, leadership profiles and other documents. Then, you’d have to wait for those items to arrive via mail or pay a visit to the company’s headquarters and facilities.
Now, you only need a few keystrokes to get this information on your biggest competitors.
Scan their websites to learn more about their products or services, leadership, and values. Download annual reports and press releases. Visit their social media pages to find out what they share with followers and how they communicate.
Beyond this public information, you can also use tools like SEMrush and SpyFu to analyze their websites. Look at their most valuable pages, which keywords they rank for, and what kinds of content they create.
The more you know about your key competitors, the better prepared your business will be to meet the challenges their operations present.
3. Compare them to one another
You want to compare each competitor to your company, but it also helps to compare them to one another. After all, these companies may be vying for your customers, but that doesn’t mean they operate the same way. Once you’ve gathered all the information you can about these businesses, write detailed profiles that allow you to see how they do business and how big a threat they may actually be.
The easiest way to do this is with a side-by-side comparison. Include the products and services they offer, business categories, locations, target audiences, distribution channels, unique capabilities and anything else that would make one business stand out from the rest. Save one space to write a profile of your own company. This will help you with the next step.
4. Perform a SWOT analysis
Consumers are constantly looking for new places to get what they want. Even if they’re loyal to your business, they’re still looking at it in the context of other businesses.
Online competitor analysis allows you to view your business as customers may see it, revealing its strengths and weaknesses as well as the potential opportunities and threats to its existence. This is exactly the information you’ll need to perform your SWOT analysis.
Using the profiles of your company and its competitors, identify the following:
- Strengths: What does your company do well? What do you provide that the competition doesn’t?
- Weaknesses: Are there areas where competitors perform better than your company?
- Opportunities: Are there emerging trends or changes in competing companies that could benefit your company over the long term?
- Threats: Which trends or competitive activities could cause a disruption in your business?
This analysis will identify areas you may need to improve, as well as areas that you can leverage in future marketing and branding efforts.
5. Identify your unique position
Despite all the apparent similarities between you and your competitors, there should be enough difference between each business that there’s a unique market position for everyone. What will yours be?
Thanks to competitive analysis, you have a better idea of what your competitors provide. Now it’s time to figure out where you stand in relation to them.
Using your profiles and SWOT analysis, identify what you do that other companies don’t, or even what they don’t do as well. This could be a unique product or a larger range of products. Maybe it’s a unique service, such as customization or free technical support.
Perhaps your business approach is more in line with the social or environmental priorities of your customers, or simply lower prices. Whatever it is, make sure it’s an honest assessment based on the research and analysis performed on your competitors.
How do you stack up against your competitors?
No marketing strategy can exist in a bubble. You have to understand what your competitors are doing so you can develop a plan that makes you stand out. The Internet has made this information easier to find, but it can still be difficult if you’re new to competitive analysis.
If you’d like to get an in-depth look at what others in your industry are doing and use that information to improve your own strategy, WebFX can help! Contact us today to speak with a strategist about how our Internet marketing team can use competitor research to help your business grow.