This article breaks down what a competitor analysis is and why your brand should do one. Then we’ll look at how it is done, as well as two simple competitor analysis methods.
Organizations of any size can benefit from investigating what their competition is doing. A small construction company, for example, may never reach the size of a nationwide builder but can grow by using some of the larger firm’s tactics.
Same goes for using a competitor analysis to avoid other companies’ missteps. Better to learn from others on that front than to learn the hard way, right?
Let’s get started with the basics.
Competitor Analysis Defined
The simple definition? Researching who your competitors are and the business strategies they’re using.
Example. A marketing agency would search out other agencies targeting similar clients. It could be a local competitor or those that take on clients remotely. The more you know about your target market, the more precisely you can pinpoint competitors you should research.
Once you have a list of competitors similar to your business, you can dig into their strategies and pick them apart. Remember, you don’t have to utilize all their tactics. Just the ones that are obviously working well and those that your organization has the resources to replicate.
Example. An NBA team studying Michael Jordan’s Bulls back in the day could never hope to duplicate the greatest player of all time. But this competing team could learn a ton by studying Jordan’s minutes per game, home versus away tendencies, and which bench player was the weakest link.
On to why…
5 Reasons Why You Should Perform Competitor Analysis
Before we look at a couple of easy methods to do a competitive analysis, here are 5 reasons you should consider doing one.
- Falling behind on trends could harm your business for many years into the future.
- Avoid blind spots where your business is not delivering the best experience.
- Better understanding of your customers / clients.
- Spot opportunities faster.
- Helps set tangible goals by seeing competitor benchmarks / achievements.
Point by point:
A smaller competitor may help you spot trends and display leaner methods of operations and better word of mouth marketing.
Blind spots are everywhere and easier to spot outside your company bubble.
Simply seeing a new product or service offered by a competitor can help you understand the changing needs of your customers.
Competitors’ negative reviews may highlight where your brand can step up and take advantage of opportunities that were not apparent before.
You won’t know detailed profit numbers with a competitor analysis, of course. But simply noting industry awards and certifications posted on a competitor’s website reveals what can boost your brand’s authority.
Now the how…
Competitor Analysis – The Steps
#1 Make a list of competitors.
Knowing the major keywords in your industry will help with this search.
Later, you can dig deeper into long-tail keywords or voice-search keywords to expand your list.
Also, customer surveys about other services and products they have tried will help identify competitors.
How can you find upcoming companies that could threaten part of your business? Producthunt is one way to see new products that could disrupt niches. Google Trends and Exploding Topics are two more tools to stay ahead of the competition or at least not be taken by surprise!
Three Types of Competitors:
- Replacement competitors
Products and services outside your industry that can replace your business are harder to identify. Example. GPS makers probably didn’t see the iPod turning into the iPhone which replaced standalone GPS devices for most drivers.
#2 Organize competitor data.
A simple start is best. No need to overwhelm yourself with mountains of data. After all, you have a business to run, right?
Collect competitor information that will help you most in the shortest amount of time. Expand on this as you get more comfortable with competitor analysis. This example sheet shows the basics.
But you could also start with a single category of information you want to learn about your direct competitors. Example. Are they running Facebook Ads?— an easy thing to check and you can also learn how long they have been running specific ads. Another example, how often do they post to LinkedIn and what type of media they use there.
#3 Profile competitors’ audiences.
Will your competition be targeting people similar to your audience? Yes. But seeing who else they target can help you ramp up efforts to reach segments you may have ignored or not realized were a good fit for your offers.
Learn about a competitor’s audience by digesting all you can about the brand.
- Its mission statement
- About us page
- Press releases
- Blog posts
- Lead magnets
- Sign up for its newsletter
- Replies to reviews
- Taglines / slogans
*Be sure to read between the lines to spot hidden opportunities. Example. Reading the competition’s newsletters can give you hints on how they are segmenting their email list.
**An immediate advantage you can have over many competitors? Inbox Mailers, if you utilize email marketing. You can reach your audience with perfect timing → when your subscribers are actively in their inbox. Learn more with a free one-on-one demo of Inbox Mailers.
#4 SEO dissection.
You can use tools like Keywords Everywhere to analyze a competitor’s website. Or hire an SEO expert freelancer to hash out the top keywords used on various pages of their website.
This will ensure you’re targeting keywords that are reaching customers you want buying from you versus competitors.
#5 Product, price, place, and promotion.
A competitor analysis should include the 4 Ps above.
Product features and benefits plus any weaknesses in the product. Or weaknesses in product messaging.
Pricing is tricky since it’s unwise to compete solely on price. So tread carefully when comparing your brand with a brand that has different resources and budgets.
Place refers to where competitors sell products and how they may be distributed and displayed.
Promotion is how they market their products / services. Details could include costs involved, stories they use to sell, and messaging they hammer home repeatedly.
#6 Compare and contrast.
Now that you have plenty of info to work with, you can break down where your competition is falling short and where they shine.
No organization is perfect, so pick apart holes in their strategies. You can learn from these weaknesses and the strengths which will be highlighted in their positive reviews (be sure to read authentic ones with detailed information).
Seeing where other companies stand will help you see your business more clearly. If you’re running a small computer / smartphone repair shop, you can’t hire thousands of people like the Geek Squad. Yet, you can learn where they fail to provide great customer experience and where a giant company can’t really serve certain niche markets.
Two Specific Analysis Methods (Easy Ones)
⭐Business Model Canvas (piece by piece):
- Customer segments
- Value proposition
- Marketing / sales / delivery channels
- Customer relationships
- Revenue streams
- Company activities (broad and narrow)
- Resources needed
- Cost structures
⭐Strategic Group Analysis
Simply group competitors by category. Examples:
- Marketing efforts
- Years in business
- Number of employees
- Range of products / services
- Social platforms they do or do not utilize successfully
This can reveal reasons for their success, opportunities for your brand, and prevent wasted efforts on fronts where you don’t have the resources to compete.
Email Competitor Analysis
Ok, now you know the what, why, and how of competitor analysis.
So how about some tips for doing an analysis with email marketing specifically?
I mentioned how signing up for email newsletters from industry competitors can give you insights into their marketing, business goals, segmenting, and targeting.
You can also learn how often they send emails.
What percentage of their emails are promotional versus editorial?
Are they sending consistently or sporadically?
Do their emails land in your spam folder?
Is it easy to recognize the sender in those emails?
What types of subject lines are they using and are they making you eager to open the email (if you weren’t doing a competitor analysis)?
Are the emails more text- or graphics-heavy?
What do you notice about their calls-to-action and how many CTAs per email?
Lastly, have you compared your open rates, unsubscribes, click rates, etc. broadly to mailers in your industry (you can do so here)?
A competitor analysis takes work. But the benefits are undeniable. Even if you only compare your company to one other business at a time.
Being trapped inside a bubble is risky. Just ask the GPS companies who lost their way and market share by not noticing a dangerous competitor on the horizon.