Researching your competitors is one of the most valuable steps you can take to address the needs of your buyers.
A competitor analysis provides valuable insights into the competitive landscape, helps you identify opportunities and threats, and it helps you anticipate market trends.
Conducting a competitor analysis regularly is important for several reasons:
A competitor analysis helps you gain insights into your industry and it helps you understand the competitive landscape on the brand level, the offer level, and the feature level. By analyzing competitors’ strengths, weaknesses, strategies, and market positioning, you’ll be able to make informed decisions about your own business strategy.
A thorough competitor analysis helps you identify opportunities and threats in the market. By examining competitors’ products, services, pricing, distribution channels, marketing tactics, and customer base, you can identify gaps in the market where customer needs are not being met.
A competitor analysis allows you to identify areas where you are lagging behind the market and areas where you have a competitive advantage. This information lets you set more meaningful performance targets, develop strategies to improve competitiveness, and allocate resources more effectively.
A competitor analysis provides valuable insights that inform strategic decision-making. It will help you identify your unique selling points, differentiate yourself from competitors, and develop strategies that promote your differentiators.
Monitoring competitors allows you to stay updated on market trends, industry developments, and changes in customer preferences. By analyzing competitors’ actions and responses to market dynamics, businesses can proactively adapt your strategies to stay ahead of the curve and capitalize on emerging opportunities.
By conducting a competitor analysis, you can identify potential risks and challenges in the market posed by new entrants, disruptive technologies, changing regulations, or shifting consumer behavior. By staying aware of these risks, you can develop contingency plans and take proactive measures to mitigate them.
Collecting the data for a competitor analysis is fairly straightforward, but the process can take considerable time. The results are worth the effort, though.
Here are the steps I follow when conducting a competitor analysis:
First, identify the main competitors in your industry or market. These can be direct competitors offering similar products or services and indirect competitors that may serve the same customer needs in a different way. I always compare direct brand competitors, competitors with similar offers, and I compare key features of similar offers.
Next, determine the specific objectives of your competitor analysis. Are you looking to assess competitor strengths and weaknesses, understand their marketing strategies, evaluate their pricing, or analyze their product offerings? Perhaps, you’re comparing all of these details. Clearly defining your objectives will guide your analysis.
Collect relevant data and information about your competitors. Some common sources of information include their websites, annual reports, press releases, product brochures, social media channels, customer reviews, industry reports, and news articles.
Evaluate the products or services offered by your competitors. Consider factors such as features, quality, pricing, packaging, and branding. Identify your competitors’ unique selling points and how they position themselves in the market. Assess any advantages or disadvantages they have over your own offers.
Study your competitors’ marketing strategies and messaging. Look at their advertising campaigns, content marketing efforts, social media presence, and branding. Pay attention to their target audience, key messages, value propositions, and customer engagement tactics. Document how your competitors differentiate themselves and how they communicate their competitive advantages.
Identify and analyze the strengths and weaknesses of your competitors. Consider aspects such as market share, customer base, financial stability, distribution channels, technological capabilities, intellectual property, partnerships, and human resources. Assess where they excel and where they may have vulnerabilities.
Compare your competitors’ prices to yours and evaluate their perceived value relative to their offers. Analyze their pricing models, discounts, promotions, and any other pricing-related strategies they use. You also need to understand how they position themselves in the market and how they differentiate their offerings from competitors.
Note your competitors’ online activities. Monitor their website, blog, social media channels, and online customer interactions. Look for customer feedback, reviews, and complaints. Assess their online reputation and customer satisfaction levels.
Continuously monitor the industry and market trends that may impact your competitors. Stay informed about new product launches, industry innovations, regulatory changes, and shifts in consumer behavior. This will help you anticipate and respond to market dynamics effectively.
Once you have gathered and analyzed the information, it’s time to figure out what it all means. Identify opportunities to differentiate your offers, areas for improvement, potential threats, and strategies to gain a competitive advantage. Use the insights gained to inform your marketing, product development, pricing, and overall business strategies.
A competitor analysis is an ongoing process. Markets and competitors evolve over time, so it’s important to regularly update and reassess your analysis to stay ahead in your industry.
We all know listening to our buyers is important. Listening to our competitors is too.
Following the ACTIVATE™ Framework with each project ensures that this critical step in understanding your buyers and their needs is included.