How to run effective competitor analysis
If you’re launching a new brand, a crucial part of the process is researching other companies that offer products or services that are similar to what you intend to provide.
It’s common sense. You can’t be successful at selling something that already exists unless it has some special differentiating quality (“unique value proposition,” or UVP, in the jargon). That might be the price point, quality, brand personality, geographic location or something else.
What might be less obvious is that it’s not enough to run competitor analysis before launching and leave it at that. The landscape continues to evolve, and you need to make yourself aware of new potential competitors and shifts in the way the competition operates, or risk making yourself obsolete.
What are the main benefits of conducting competitive market analysis?
Finding out the strengths of your competitors is a way to make sure you don’t fall behind in quality standards or marketing.
Finding out their weak points, on the other hand, provides an opportunity to fill that gap and innovate to create solutions that don’t yet exist.
By comparing yourself with other similar companies as your own business evolves and grows, you can assess how well you are performing in the marketplace and ensure you are continually moving in the right direction.
All this is in addition to one of the main goals of competitive analysis, which is to help you identify your own product’s unique value proposition.
Here is a step-by-step guide:
1. Identify your primary competitors
This includes not just direct competitors, who have a similar product, target market and price point to you. You also need to think about companies offering different types of product that might solve the same problem for customers.
For example, a YouTube channel about woodworking may be competing with books, websites and podcasts on the same topic that solve the same need for customers.
2. Assess their product offering
There are many questions to ask when assessing a competitor’s product. Is it cheap or luxury? Are they selling in bulk or by subscription or via one-off sales? Are there seasonal offerings? What is their distribution method and market share?
Mapping the answers to these questions will help clarify the positioning of your own products or services.
3. Go deeper on logistics and sales
Find out as much as you can about how much business your competitors are doing and what their sales process looks like.
Take a look at their pricing, and whether they offer discounts at certain times. You don’t need to undercut this, but if your product is more expensive, you’ll need to make up for this in another way.
Assess how quickly they are shipping and how much they charge for this. It’s a huge factor in consumer decision-making, and again, if you aren’t quicker or cheaper you’ll need to counterbalance this somehow.
4. Analyse competitors’ marketing and content strategy
First, check out your competition’s website. If they have a blog, analyse sample posts for tone, frequency, readability, SEO optimisation and image quality.
Other types of content to make note of are ‘FAQs’ sections, white papers or ebooks, videos, webinars, case studies, ad campaigns and media kits, if applicable.
On social-media channels, look at engagement and comments, and think about what topics and types of content perform best.
Are competitors’ accounts attracting more readers on a certain platform? Are the companies responding to comments, and in what way? How are they driving traffic to their social channels, and back from social-media pages towards online sales?
5. What technology stacks are your competitors using?
It may be possible to find out what plug-ins are powering your competitors’ websites. Customer service software, for example, can make a big difference to the consumer’s experience. Finding this out can help you decide what technology to invest in, and perhaps what type of software-design talent you need to hire.
6. Perform a SWOT (strengths, weaknesses, opportunities, threats) analysis
As you go through each step above, make a note of your competitors’ strengths and weaknesses in each field. This will help you understand how your own company matches up.
You can then identify the threats that the competitor represents to your business, and what opportunities there are to provide better offerings or fill gaps in the market.
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Related article: How to calculate cost of sales for your business
Tilly manages the content strategy for Airwallex. She specialises in content that supports businesses in their growth trajectory.
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